Contribute every year

It’s usually easier to make smaller, annual contributions than larger ones every few years, and it can be of greater financial benefit. The value of your RRSP can increase faster because your RRSP investments can continually compound.

For example:

		Sheila, age 30
			contributes $1,000 a year for 35 years*
			earns 6% average annual compounded return
			total RRSP investment:$35,000
			total worth of RRSP at age 65: $118,121
		Caitlin, age 30
			contributes $5,000 every 5 years for 35 years*
			earns 6% average annual compounded return
			total RRSP investment: $35,000
			total worth of RRSP at age 65: $104,771

Sheila is ahead by $13,350, and she probably found it easier to make her smaller annual RRSP contributions.

*Contributions made at the beginning of the year.

The above example is for illustration only. While care is taken in the preparation of the calculations in the illustration and examples, no warranty is made to their complete accuracy.

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