If you’re like a great many Canadians, you make one lump-sum contribution to your RSP every year — probably just before the deadline to get a deduction for the previous tax year. Making smaller contributions throughout the year is much easier and less stressful.
Can you afford $25 every payday? That’s $650 a year for your RSP (assuming you get paid bi-weekly). Bump it up to $50 each week, and you’ll have put away $2,600.
If you use your contributions to purchase mutual funds using a Pre-authorized Purchase Plan, you’ll also benefit from dollar-cost averaging. This means you buy more units when prices are low and fewer units when they are high. While this technique doesn’t guarantee a profit or protect against a loss, it could result in a lower average unit cost over time.
To get started, log on to EasyWeb Internet banking to set up a Pre-authorized Purchase Plan.