Basic RRSP Strategy

• Contribute early.
  
  
• Contribute regularly.
  
  
• Contribute to the maximum.
  
  
• Contribute automatically.
  Set up pre-authorized contribution with your financial institution to "force" yourself make savings.

• Consider a spousal RRSP if you expect your spouse's retirement income will be lower than yours.
  
  
• Make RRSP deduction at source.
  Here's how it works: Write to the source decutions division of your district taxation office (your employer can provide the address) and ask the CRA to authorize the lower tax level. By doing so, your tax refund will be spread out over every pay cheque and you’ll have the money more quickly to reinvest.
  
  
• Diversify your RRSP portfolio.
  
  
• Don't wait until the last minute to make you contribution.
  
  
• Don't make early withdrawl unless absolutely necessary.
  By taking money out of your RRSP, you lose the tax dedcution credit, the lost contribution room which will never be recovered, and the compound growth of your investment in a tax-shelter.
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Strategy on RRSP Investment

• An RRSP is not an insurance plan, but rather an investment.
  Like all investments, you need to pay attention to manage it from time to time.

• Don's make the mistake by assuming your RRSP task ends with your annual contribution.
  Review your RRSP investment at least every six months. Discuss it with your financial advisor.

• Hold fixed income investments inside an RRSP and equity investment outside.
  Fixed income investments are highly taxed outside an RRSP, while capital gains and dividend income get more favorable tax treatment.

• Utilize the over-contribution limit.
  Canada Revenue Agency put a one-time over-contribution limit there to serve as a buffer for error in case you make a mistake in calculating your RRSP contribution. You can take advantage of this $2000 to gain the compound grwoth tax-free by investing $2000 more in your RRSP. The $2000 amount is cumulative, not an annual limit.

• Utilize the foreign investments.
  Revenue Canada just lifted the limitation on foreign content, and you can now hold as much as 100% of your RRSP in foreign investments. Foreign investments should be part of your diversification strategy.

• Defer the deduction.
  Most of us contribute to our RRSP with the intent of using the tax deduction in the same year. But if you expect to earn higher income, or receive a big bonus, or a severance allowance in the next year, defer the claim of your deduction to next year will save you more tax dollars.

• Contribution in kind.
  This means you can transfer any eligible investment held outside your RRSP into the plan to claim the tax deduction, either they are stocks, mutual funds, bonds, or other investments. This is extremely helpful when you are strapped for cash to make your annual contribution. But be aware that the 'deemed disposition' rule applies here, which means any increase in value for your investment is treated as capital gain and will be taxed on the day you transferred them into your RRSP.