Navigate the slopes of personal finance with these 4 RRSP tips

Navigating your personal finances can seem like tackling a double black diamond slope just after getting off the bunny hill. But, if you want to tackle that hill and become the financial savvy person your friends envy, you just have to do it one step at a time.

One thing most of my financially savvy friends always recommend is opening a Registered Retirement Savings Plan (RRSP) — and sooner rather than later to maximize my retirement savings.

Not sure where to start with your RRSP? I’ve personally been using Wealthsimple for mine because it has all the tools my money-savvy friends swear by while makes investing and saving straightforward.

And pssst…. bundle up — there are some snowy perks and piques that come with moving your RRSP to Wealthsimple… but more on that later.

Lianne Snow/Wealthsimple

Unsure if an RRSP is right for you? Want to impress your friends who may need some help with their savings? Here are a few tips to share about RRSPs so you can become that finance pro your friends turn to!

Tax benefits & RRSPs

Lianne Snow/Wealthsimple

Something you can boast about to your friends when it comes to contributing regularly to your RRSP are the ways it helps both your financial future and present.

As long as you stay under the yearly limit (which, in 2024, was $31,560) of what you’re allowed to contribute, any money you put into your RRSP gets deducted from your annual income. This helps relieve some of the stress come tax time, and can greatly benefit your present and future finances!

If you have any unused contribution room from years past, it carries over year-over-year; you can check your CRA account to find out what your contribution limit is.

Pro tip: Get your RRSP contributions matched

Lianne Snow/Wealthsimple

Did you know that most employers have RRSP matching programs available to their employees? This means your contributions will get matched dollar-for-dollar, usually around a certain limit. It’s always helpful to remind your friends to check so they’re not leaving any retirement money on the table.

Alternatively, there are also reward programs from other major financial institutions you can recommend that will match your RRSP contributions. Right now, Wealthsimple is offering some big rewards on eligible RRSP transfers until Saturday, March 15.

They’re promising a 2% match on eligible RRSP transfers and a 1% match on qualifying TFSA, FHSA, and other accounts when you transfer at least $15,000. You’ll also get reimbursed for the transfer fees, so it’s a win-win!

Here’s where those Wealthsimple perks from earlier come in: With eligible transfers, you can also earn up to five Canadian Lift Passes.

You’ll get one ticket for transferring an RRSP; one for setting up and completing your first direct deposit of $2,000 per month; and one for each friend (up to three) you refer to Wealthsimple. It’s that easy!

Invest flexibly through your RRSP

Lianne Snow/Wealthsimple

The best part about opening an RRSP is the flexibility around how you can invest it — and this is where you can really impress your friends with your expertise.

Through your account, you can choose to self-direct your investments, which means you’ll have full control over the stocks and ETFs you choose to put in your portfolio.

Here’s a pro tip on investing you can pass along from Wealthsimple Senior Advisor, Shane Murphy:

“It’s important to have a well-diversified portfolio across different asset types like stocks, bonds, and ETFs, as well as geographies to help limit risk. Setting goals and staying consistent can help your RRSP grow over time. With the right plan in place, you can enjoy life now and save for Future You.”

Or, if you don’t want to invest yourself, Wealthsimple has options for you to invest in a managed portfolio. This is the option I personally use for my own RRSP, because I like having a low-cost, diversified portfolio built for me based on my goals and needs.

Withdrawing your RRSP

Lianne Snow/Wealthsimple

A good thing to keep in mind with your RRSP is that any growth that happens is tax-free until you make a withdrawal, which means your contributions go a long way to building a nest egg. Also, when it comes time to cash out on your retirement, you’ll be doing so at a lower tax rate, meaning more money in your pocket.

If your friends are concerned with waiting until retirement to cash out, Canada offers certain exceptions through the Home Buyer’s Plan and Lifelong Learning Plan. This lets you withdraw limited amounts from your RRSP before retirement to help fund your education or home purchase.

You won’t have these benefits all year, as the RRSP contribution deadline for this year’s tax season is fast approaching — Monday, March 3. So reap the benefits of Wealthsimple by transferring your RRSP today.