Give your retirement savings a boost

A couple reviewing their portfolio with an Investment Representative.

Getting more growth from your investment portfolio can help build your RSP.

A registered Retirement Savings Plan (RSP) remains one of the most effective ways to save for retirement — contributions are tax-deductible and your investment earnings compound tax-free within the plan. Whether you are planning to retire in five years or 20 years, there are many steps you can take to give your retirement savings a boost.

Make an in-kind contribution

If you don't have the cash to make a contribution, you can contribute eligible investments held in a non-registered account to your self-directed RSP and claim a deduction for the market value of the security.

Keep in mind that if you contribute a security that has appreciated in value, it may trigger a taxable capital gain. However, if you contribute an investment that has decreased in value, you are not allowed to claim the capital loss against any capital gains.

Top up your contribution with an RSP loan

If you have unused contribution room, borrowing to top up your RSP contribution is an option to consider — especially with interest rates close to historic lows.

The potential tax refund from your higher contribution could be used to repay part of the loan.

Add growth to your plan

Contributing more to your RSP is one way to boost your long-term savings; adding more growth to your RSP portfolio is another.

For instance, high-quality dividend-paying equities are one way to add conservative growth options to your RSP. You may benefit both from attractive yields and the potential for capital gains. This conservative growth strategy can help you build greater wealth over time, produce potential returns that may exceed inflation, and lessen the chances you'll outlive your savings.

These are just some of the ways to boost your retirement savings. Visit the online tour to learn more about how to screen for dividend-paying equities in the Markets & Research section of WebBroker.

The information contained herein is current as of November 18, 2011.

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