Having an automatic monthly deduction to your RRSP or TFSA gets your money working for you sooner than contributing one large sum at the end of the year. It may even help your retirement savings grow larger. If you already use automatic deductions, try to increase them each year. Even a $5 increase can make a large difference to your retirement savings over time.
Originally published April 19, 2016.
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If you are one of those smart people who has an automatic deduction regularly taken from one of your bank accounts and put it into your RRSP, you are already ahead of the game.
For example, if you make monthly contributions to your RRSP, you get the benefit of having your money work for you every single month, which means you will have more when you retire than if you just waited till the end of the year to make one contribution of the same amount you did with all those monthly contributions.
But if you have an automatic monthly contribution, don't just set it and forget it.
Take the time to give yourself a raise.
Go back and look.
Can you make that automatic contribution a little bigger than it was last year? $5, $10, even a small amount can make a big difference.
And if you make a habit of upping those contributions each year, that means you're going to get to that retirement number a whole lot sooner.
For example, if you make monthly contributions to your RRSP, you get the benefit of having your money work for you every single month, which means you will have more when you retire than if you just waited till the end of the year to make one contribution of the same amount you did with all those monthly contributions.
But if you have an automatic monthly contribution, don't just set it and forget it.
Take the time to give yourself a raise.
Go back and look.
Can you make that automatic contribution a little bigger than it was last year? $5, $10, even a small amount can make a big difference.
And if you make a habit of upping those contributions each year, that means you're going to get to that retirement number a whole lot sooner.
