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Avoid the tax rush and optimize returns by investing regularly in your RSP

If you only do one thing by the end of the year, get the power of dollar-cost averaging working for your RSP. How? By making small, regular investments throughout the year using a pre-authorized chequing (PAC) plan: a disciplined investing approach which is good for you—and your RSP.
Already invest regularly?

Do you rush to contribute to your RSP at tax time?

If so, you could be missing out on the potential for substantial, compound growth over the long-term. Pre-authorized chequing (PAC) plans help you take advantage of dollar-cost averaging by contributing regularly and often regardless of market moves.

A PAC plan imposes discipline. It also re-moves the temptation to time the market because no matter what happens, you invest the same amount each month. In fact, investing regularly works best in volatile markets. This is because you buy more units when prices fall and fewer units when prices rise.

Easy to manage
Once you’ve earmarked the money to come out of your bank account each month, your RSP contributions become easy to manage. You won’t miss the small amounts that come out of your account. You also won’t miss having to set aside a lump sum every year during tax time.

Flexible and convenient
When you use a PAC plan, you get financial advantages plus you retain flexibility:

  • Easily change amount or frequency.
  • Option to change your plan mix at any time.
  • Top-up at any time.
  • Monitor your RSP online.

Tax efficient
At any age, RSP contributions are a smart way to invest. You always get the income tax deduction and your investment always compounds tax-deferred.

What’s on your mind?

  • Should I keep investing the same amount at regular intervals, even when the market is volatile?
  • Can I monitor my PAC plan online?
  • Can I make any changes to the amount or frequency of my PAC plan without any costs?

The answer: YES

How to set up a PAC plan

This year, get a monthly PAC plan working for you before the tax rush.
Here’s how:

  • Decide how much you want to invest and how often. Ensure it’s a comfortable amount—you can top up later.
  • Select an investment you’re prepared to hold for 5 to 10 years or more.
  • Contact your advisor or provider to set up a PAC plan.
  • Review your choices annually.

Already contribute regularly?
Here are some ways to take your savings to the next level:

  • Set up PAC deposits for your Tax Free Savings Account (TFSA).
  • Consider a non-registered PAC plan.
  • Use a spousal RSP to split your income.
  • Have more than one RSP? Consider consolidating.

We’d be happy to help you decide the savings approach that’s best for you. Send us a copy of your tax Notice of Assessment so we can help you maximize your RSP contribution limit.

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