RRSPs are still the foundation of most Canadians' voluntary retirement savings. However, there are some fundamental RRSP issues that many are not aware of, that have a significant impact of the retirement fund produced.

• The critical, overlooked parameter is investor behaviour and which of the 5 RRSP refund strategies is used.
• After-tax dollars invest equate to much more inside an RRSP (before-tax dollars).
• If investors don't invest the full equivalent before-tax amount in RRSPs, they could be better off not using RRSPs to fund retirement.

Opportunity

For example, many aren't aware that in a 40% tax bracket, $3,000 to invest equates to $5,000 in an RRSP. Most spend their RRSP refunds, unaware they are investing less than they start with.

Reinvesting the refund is better, but still does not invest all of the dollars intended for retirement. In this case, helping investors understand how to invest the full equivalent amount in RRSPs increases the amount contributed by 67%, benefiting the client, advisor, dealer, and money manager by the same ratio.