Skip to main content Skip to header navigation

Getting a late start: When is it too late to start an RRSP?

Procrastination has finally caught up with you, and now with retirement looming, is it really too late to open up an RRSP account?

Starting an RRSP
couple meeting with financial planner

When you were in your mid-20s, you were too busy looking at starting a career to start thinking about investing in your RRSP (registered retirement savings plan). In your early 30s, you may have been busy with two kids, a mortgage and college savings funds to worry about, not to mention paying off your own school loans.

Fast-forward a few more years, and a family emergency may have used up whatever was in your emergency fund stash. During these years, retirement investing took a back seat to what seemed most important at the moment, but little did you know that investing in your RRSPs should have been included in these “important moments.”

Starting an RRSP savings account is best done at an early age, but in theory it’s never too late to open an RRSP account. Starting one later in life, however, does come with its downfalls, which is why it’s better to start thinking long term by the time your 30s roll around.

Embracing your youth: 20s

Thinking about your retirement still seems scary at this point, and any money you make is probably being put toward cars, moving out of your parents’ house and student loans. It’s definitely good to keep in mind your later years at this stage in life, but if you don’t actually open up an RRSP account, don’t sweat it — it won’t be the end of the world.

Welcome to real life: 30s

Once you hit 30, it’s time to get serious about retirement investing. Sure, immediate life expenses do take top priority in many instances, but investing even $50 to $100 monthly now can make a difference in the long run. As you reach your mid-to-late-30s, you should be putting aside at least 10 per cent of your income toward an RRSP savings account.

Time to get real: 40s

OK, now it’s time to get real serious. Your 30s still provided you with some leeway regarding how much to invest and when to start, but by now it’s time to get real. By this time, many of us will probably either have or be looking to invest in our homes, and investing in RRSPs will not only still gain you income for your retirement but can help in lowering your taxable income.

Rounding the home stretch: 50s-plus

With retirement right around the corner, starting an RRSP savings account now won’t get you the same monetary gain as it would have if you had started 20 years ago, but you can still invest what you can. By using TD Direct Investing’s retirement savings calculator, you can see that money can still be made even when opening up an RRSP this late in the game, so don’t let anyone discourage you or tell you it’s too late.

More on money

Tips for saving money at work
Mid-life career changes
Saving for an emergency fund

Leave a Comment