Is an RRSP Right for You in Your 30s?

If you’re in your 30s, you might be wondering whether it’s too early to start contributing to an RRSP (Registered Retirement Savings Plan). It’s not. With the help of this article, you can learn whether or not an RRSP could benefit you and get the facts about how much you need to contribute to maximize the tax benefits of RRSP contributions.

Figuring out if you need an RRSP

Do you know when to invest in your 20s and 30s? If you’re like most Canadians, then it’s never too early to open up a Registered Retirement Savings Plan (RRSP). But before you go planning all of those dream vacations with your tax refund, consider whether or not saving into an RRSP makes sense for your financial situation.

An RRSP is a type of investment account that lets you contribute to a savings plan on a pre-tax basis—meaning any returns earned within that plan aren’t taxed until withdrawal. While contributing to one might make sense if you have no debt and/or are looking ahead to retirement age, other circumstances may call for you put your money elsewhere.

Talk to a financial advisor to know whether it is the right time for you to open an RRSP.

Figuring out how much you need to save

There are a number of calculators you can use to determine how much money you will need to save for your retirement. The one that’s most comprehensive—and therefore best at calculating what your future expenses will be—is BMO’s Retirement Planner.

By putting in your current age, income, savings amount and desired retirement income from your investments, you will get a decent idea on how much you need to save for your RRSP. You may also choose to talk to our financial advisors to know how much you need to save depending on your financial goals, current income and liabilities.

The downside of not having an RRSP

The longer you wait to contribute to your RRSP, the more you lose out.

After all, contributing $5,000 a year at age 25 saves you much more in taxes than contributing $5,000 a year at age 35. And even if you do have a small amount of debt, like most young people do these days, contributing to an RRSP will give you something positive to aim for in terms of paying off those debts.

The sooner that debt is gone, and not just deferred via high-interest credit card payments, the better off you’ll be financially. So yes—you should think about getting started with an RRSP in your 20s or 30s.

Finding ways to make room for an RRSP

If you want to save money in an RRSP but are strapped for cash, it’s probably time to get creative. Whether you want to start saving now or roll over a previous year’s contributions, there are some things that you can do to make room in your budget so that you can put money away without missing it too much.


For example, dropping unused gym memberships and cancelling unused magazine subscriptions will instantly free up a few hundred dollars per year that could be used towards your goal. It may not seem like much at first glance, but every little bit helps!

Quick Read:

Why does it make sense to make RRSP a year-round priority?

RRSP – Everything You Need to Know [Presentation]


An RRSP is one of three common ways to­ save, along with a TFSA and a non-registered investment account. Before you take any action, ask yourself if you have enough disposable income to put money into these savings vehicles.

If so, you can decide which one makes sense based on your long-term investment horizon and other financial goals. The best suggestion is to always talk to a professional financial advisor who can guide you towards the right path based on your financial goals and needs.

At Trust Life, we have over 30 years of experience dealing with insurance and investment products for both businesses and individuals. Get in touch with us for a free consultation today! Remember, we work for you and only you!