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RRSPs and RRIFs -> Maximize your RRSPs

Maximize your RRSPs, and start as young as possible.

Even a small amount contributed annually becomes a large amount over time, as shown by the table below.

	Annual Contributions			Total Contributions Over 30 Years	RRSP Value in 30 years
	Years 1 to 15	Years 16 to 20	Years 21 to 30	Total Contributions Over 30 Years	5% return	10% return
Case 1	$1,000	$1,000	$1,000	$30,000	$ 69,761	$ 180,943
Case 2	zero	$2,000	$2,000	$30,000	$ 45,315	$ 69,899
Case 3	zero	zero	$3,000	$30,000	$ 39,620	$ 52,594
Case 4	$1,000	zero	zero	$15,000	$ 47,103	$ 145,993
Case 5	zero	$1,000	$1,000	$15,000	$ 22,658	$ 34,950

In cases 1 to 3, a total of $30,000 was contributed to RRSPs, earning either 5% or 10% per year.

In Cases 4 and 5, only $15,000 was contributed in total.

Tip: Note the huge difference by contributing earlier. However, see our article Are you better off to pay down your mortgage, or contribute to an RRSP?.

See also: What is better - TFSA or RRSP?

Revised: June 16, 2010

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