A little more than one left to make your RSP contribution for the 2011 tax year!

Why do it you may ask?

• Save for your future
• Reduce the amount of tax paid now

How do you do it?

• Add to a RSP you already have
• Set up a monthly RSP savings plan (so you’re not dealing with it last minute next year!)
• Most financial institutions offer loans however, you are likely just as well off starting now with your own money

What to invest in? The type of investment to put your money in depends on three things:

• What is the purpose? (retirement, home down payment or contingency fund)
• What is the timeline? (contingency fund/down payment = short, retirement = long)
• What is your risk tolerance? (low, medium or high)

If you may or will need the money in three years or less, it is best invested in something low/no risk and is liquid (accessible without penalty). If you know that a chunk of your retirement savings are for just that, retirement and you don’t plan on needing them, you can likely tolerate more risk and potentially earn a higher return on your money. The key is having a long enough time line to allow the investment to recover if it takes a dive!

The last component of your investment decision is very important. How do you feel about the risk level of the investment? How would you feel if you invested $1,000 of your hard earned money today and in six months your statement shows that is worth $750? If that would make you anxious then an investment that may fluctuate like that is not for you!

There are many, many investment products on the market. Be clear on the purpose, timeline and your risk sensitivity and the right investment choice for you will be much easier.