The COVID-19 pandemic shook up retirement plans for millions of Canadians since the beginning of 2020. Canadian investors need to maximize their Registered Retirement Savings Plan (RRSP) accounts in the face of this crisis. Today, I want to look at three RRSP tips that can help you going forward. Let’s jump in.
Remember you can invest globally
Canadian investors can be subject to a withholding tax if they invest in foreign dividend stocks in a Tax-Free Savings Account (TFSA). Fortunately, the RRSP offers more flexibility in that regard. That means that RRSP investors can target dividend kings, stocks with at least 50 years of dividend-growth, in their retirement portfolio. This includes super reliable dividend stocks like Lowe’s (NYSE:LOW) and ABM (NYSE:ABM).
Make regular contributions
The RRSP possesses a smaller max cap than the TFSA. Canadian investors need to be on the ball when it comes to making their contributions. Moreover, it is important to set up regular payments to your account. This way you do not neglect to build up a retirement nest egg. Better yet, when you make regular contributions it allows you to avoid taking up an option like an RRSP Loan.
Start saving early and often
This is one of the most important tips, especially for young investors. The best way to guarantee a comfortable retirement is to start saving early and often in your RRSP. That time, plus the compound interest you can earn over that period, is the most valuable tool you have at your disposal.
