Monthly contributions vs. Lump sum deposits

Investments and Insurance Planning, Calgary

Benefits of year-round RRSP Contributions

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. If you dump your RRSP contribution in at the end of February, like most Canadians, then you are almost always putting in money at the peak of the market. Why not take advantage of times in the year when the markets are lower, like in the summer??

Why contribute year-round?
There are many reasons why you should make year-round monthly 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, get financial advice, and develop a financial & investment plan. You'll be more likely to have a properly diversified portfolios, and are 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 pitfalls 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. You can periodically review your portfolio, reassess your goals, and make adjustments as needed. As a result, you are are often more prepared when new investment opportunities arise, like right now.


Monthly contributions are the way to go with additional lump sum deposits when you have money to drop in. The mistake most people make is making those lump sum deposits at the peak of the markets in February and March as many people are making RRSP top up contributions. Conversely, August and September are traditionally the lows of the markets and a great time to make lump sum deposits. 

Start planning and making next year's RRSP contribution now. As your trusted advisors we can help you make the right decisions. Let's get started: Book an appointment in our calendar.

Would you like to have more financial independence?

Book a Retirement Readiness Assessment in our calendar below and we give you an hour of our time to help you get clarity around your goals and values, complete a financial summary on one page and show you why a written financial and investment plan will improve your probability of successfully reaching your goals and building financial security.

Your Trusted Advisors,
Willis & Nancy



Register For Next Workshop

Share This Post:

Related Posts

Latest Testimonial

Willis and Nancy are amazing. I am near retiring totally and they advised me what to do to help me be financially set. I was late in starting my financial plan but they helped me to see that I was going to be okay. 
They are so knowledgeable about what is going on in the world financially especially for retirement. They have the answers and are interested in you personally. 
Thank you.

Catherine Moon

Contact Us

Questions? Comments? Call us today at 587-755-0159 or fill out the form below:

Have Questions? Call Us Today At

Call Us

Join Our Newsletter