- Myth: Be wary of market volatility and delay starting up an automatic plan given market downturns. Reality: Automatic contribution plans help create a regular savings habit and take the guesswork out of timing of the market.
- Myth: I need to have a sizable lump sum to be able to invest. Reality: Through regular savings and the benefit of compounding, a little can turn into a lot. Set up manageable pre-authorized contributions that line up with your pay day and watch your savings grow.
- Myth: It's easier to catch up on RRSP savings when you are older and more established. Reality: While you may be more established when older, you may also have more financial responsibility (mortgage, children). Contributing early and regularly allows you to apply a 'pay yourself first' approach to managing your finances and the added benefit of compounding
- Myth: Investing is complicated. Reality: There is an investment approach for everyone. It can be as simple or complex as you like; mutual funds offer professional investment management, portfolio solutions take care of the asset allocation and do-it-yourself brokerages offer a range of investment products. A financial advisor can help you find investment solutions that work for you.
- Myth: An RRSP only benefits those in the top tax bracket. Reality: RRSPs are about more than a tax refund. They allow you to save for the future on a tax-sheltered basis and can include a variety of investments. There are other savings vehicles, like a Tax-Free Savings Account, that you may consider depending on your own circumstances and goals for the future.
RBC Debunks Common Misconceptions About RRSP Saving And Investing
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