AGF Logo
  • Home
  • Industry and Expert Views
  • Investing and Market Views
  • Capitol Insights
  • Personal Finance
  • Français
  • AGF.com
  • InstarAGF.com
Skip to content
AGF logo
Insights and Market Perspectives
  • Industry and Expert Views
  • Investing and Market Views
  • Capitol Insights
  • Personal Finance
  • Contributors
  • Français
  • Search
Search
Close
Five ways to boost your retirement savings

  • Personal Finance

For Print Only Logo
Insights and Market Perspectives

Five ways to boost your retirement savings

Author: Sound Choices

February 26, 2018

 


The content in the below article is meant for Canadian investors only.


By investing regularly, you can move steadily towards your financial goals and the retirement lifestyle you want.

Here are five ways to better save for your retirement:

1. Understand how tax sheltering works

Your investments grow tax-free within your RRSP, providing the potential for increased growth opportunities. You can enjoy immediate tax savings because an RRSP allows you to deduct the amount of contribution from your income on your tax return.

Source: AGF Taxation and Canada Revenue Agency. Based on a marginal tax rate of 46.41%. Deferred taxes will need to be paid when they retire and withdraw the amount from the RRSP, potentially in a lower marginal tax bracket. This chart is for illustrative purposes only using a hypothetical rate of return of 5% . 

2. Start early

It may not seem like much now, but starting to invest 10 or 20 years earlier can have a dramatic impact on your long-term returns.

This chart represents the growth of a hypothetical investment, assuming the stated annual nominal rate of return compounded monthly, over a specific time period. This example does not take inflation or applicable fees/deferred sales charges into account and should not be considered to be representative of the performance of any specific investment product or investment strategy. The chart is used only to illustrate the effects of the compound growth rate and is not intended to reflect future values of a specific investment or returns on investment in a specific investment.

 3. Start a pre-authorized contribution plan (PAC)

Setting up a PAC, i.e., a regularly scheduled contribution to your RRSP that comes right off your paycheque or out of your bank account, can help build your savings with minimal effort. Don’t forget to increase your PAC or contribution amounts as you receive raises and get promotions. That way, you’ll always be investing as much as you can while also benefiting from compounding growth.

 
Year$100 PAC
(5% return)
$200 PAC
(5% return)
$500 PAC
(5% return)
$1,000 PAC
(5% return)
0$0$0$0$0
2$2,519$5,037$12,593$25,186
4$5,301$10,603$26,507$53,015
6$8,376$16,753$41,882$83,764
8$11,774$23,548$58,870$117,741
10$15,528$31,056$77,641$155,282
12$19,676$39,353$98,382$196,764
14$24,260$48,520$121,299$242,598
16$29,324$58,649$146,621$293,243
18$34,920$69,840$174,601$349,202
20$41,103$82,207$205,517$411,034
The table represents the hypothetical growth of the investment, based on the hypothetical rate of return. For illustrative purpose only. Source: Globe HySales, based on monthly PAC contributions every year over the period. 

4. Make use of your company benefits

Many companies offer employee savings or contribution matching plans. Check with your Human Resources department to see if you can take advantage of any employee programs that will help you build RRSP savings faster.

5. Consider a TFSA as well

In 2009, the government introduced the Tax-Free Savings Account (TFSA) as an additional, tax-advantaged way for Canadians to save better. While investors contribute to a TFSA using after-tax dollars, whatever growth they generate in their account is tax-free, as are any withdrawals made. TFSAs can be a smart supplement to the RRSP when saving for retirement, but they can also be used to save for shorter-term goals such as a home, vehicle or vacation.

RRSPs are one of the best ways to save for your retirement and a financial advisor can help you choose the right investments for yours. To learn more about RRSPs and saving for retirement, visit  AGF.com/RRSP.

The contents of this Web site are provided for informational and educational purposes, and are not intended to provide specific individual advice including, without limitation, investment, financial, legal, accounting or tax. Please consult with your own professional advisor on your particular circumstances.

About AGF Management Limited

Founded in 1957, AGF Management Limited (AGF) is an independent and globally diverse asset management firm. AGF brings a disciplined approach to delivering excellence in investment management through its fundamental, quantitative, alternative and high-net-worth businesses focused on providing an exceptional client experience. AGF’s suite of investment solutions extends globally to a wide range of clients, from financial advisors and individual investors to institutional investors including pension plans, corporate plans, sovereign wealth funds and endowments and foundations.

For further information, please visit AGF.com.

© 2021 AGF Management Limited. All rights reserved.

Written by

Sound Choices

Sound Choices

More from Sound Choices

  • Personal Finance

Budget Changes that Could Change Your Budget

April 21, 2021

  • Personal Finance

Sustainability Matters…

April 16, 2021

  • Personal Finance

Understanding Managed Solutions

April 1, 2021

  • Personal Finance

#ChooseToChallenge for International Women’s Day

March 8, 2021

Get perspectives straight to your inbox.

Subscribe now

More articles like this.

Budget Changes that Could Change Your Budget

  • Personal Finance

Budget Changes that Could Change Your Budget

Sound Choices | April 21, 2021

Personal finance highlights from the 2021 Federal Budget

Read More
Sustainability Matters…

  • Personal Finance

Sustainability Matters…

Sound Choices | April 16, 2021

….and how you invest can make a difference.

Read More
Understanding Managed Solutions

  • Personal Finance

Understanding Managed Solutions

Sound Choices | April 1, 2021

A managed solution is an investment made up of funds that have been carefully selected…

Read More
AGF Logo
Categories
  • Industry and Expert Views
  • Investing and Market Views
  • Capitol Insights
  • Personal Finance
  • Subscribe
Follow AGF

AGF Web Site Pages © 2021 AGF Management Limited. All rights reserved.

Links
  • Terms & Conditions
  • Privacy
  • Privacy For EU Residents
  • AGF.com
  • InstarAGF.com