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For many Canadians, an RRSP is a last-minute scramble. The result? Many people end up contributing only a fraction of what they should. Their investment decisions are hurried, and they pay more in taxes.

Why contribute year-round?
There are many reasons why you should make year-round contributions to your RRSP, rather than wait until January or February. By contributing regularly, many people find they end up putting more money aside. That significantly cuts their tax bill. As well, they are often able to file their tax forms earlier, because they haven't waited until the end of February to make important RRSP decisions. They get their tax refund cheques sooner.

Last-minute RRSP contributors end up making hasty decisions and investing in products that may not be right for them. In contrast, those who make regular contributions have the time to think about their investment goals, consult a financial advisor, and develop a financial plan. They are more likely to have properly diversified portfolios, and are probably better able to weather market volatility. A year-round strategy is a financially sound and less stressful way to get the most out of your retirement savings.

Making regular contributions
If you make regular contributions, your money goes to work sooner and can produce higher returns. For example, if you contribute $100 to your RRSP each month, you'll have a retirement nest egg of $207,929 after 30 years (based on an annual return of 10 per cent). But if you invest the same amount over the same time in yearly $1,200 lump sums, you'll have only $193,220.

By contributing regularly to the investments in your RRSP, you also avoid the pitfall that snares many small investors ... "buying high and selling low." Your costs are "averaged" across the year, and you are not as vulnerable to market downturns.

Be prepared
Finally, year-round contributors develop the right habits. They periodically review their portfolios, reassess their goals, and make adjustments as needed. As a result, they are often more prepared when new investment opportunities arise.

Start planning and making next year's RRSP contribution now. Your financial advisor can help you make the right decisions.