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- As the February 29 deadline nears, TD's Cynthia Caskey offers advice to help Canadians overcome challenges and stretch their RSP contribution dollars -

TORONTO, Feb. 22, 2012 /CNW/ - Are you a regular RSP contributor, or do you prefer to wait until the last minute? If you're like the majority of Canadians, you may be procrastinating, and therefore not maximizing your retirement savings. According to the TD RSP Deadline Poll, 58% of Canadians have waited until the last two weeks before the deadline to contribute to their RSP, including 15% who contribute this way every year.

"As life expectancy increases, consider that you may be spending 20 years or more in retirement," says Cynthia Caskey, Vice President, Portfolio Manager and Sales Manager, TD Waterhouse Private Investment Advice. "Therefore one of the most important steps Canadians can take toward securing their financial future is making an RSP contribution. Plus, you can take advantage of two tax benefits: reducing the amount of income tax you pay, and your investment is tax-deferred because the income earned isn't taxed until it's withdrawn."

Caskey addresses four reasons Canadians may be waiting until the last minute to contribute, or aren't contributing at all, and offers advice on how to overcome these challenges and make the most of their RSP contributions.

1) They feel they don't have enough to contribute throughout the year.
Forty-four percent of Canadians polled stated they didn't feel they had enough money to contribute to their RSP all year.

"Think about putting money into your RSP like exercising," says Caskey. "Maybe you're not ready to participate in an hour-long, high-intensity class, but if you walk for 20 minutes you're still making a positive difference. The same goes for investing in your RSP - even just a few dollars a week is still worth contributing. Also keep in mind that as your income or expenses change, it's important to adjust your savings accordingly."

2) They postpone setting up automatic contributions to their RSP or decide not to contribute because of market volatility.
Sixteen percent of Canadians said they 'meant to' set up an automatic contribution to their RSP, and 15% didn't want to contribute this year because of the market downturn.

"Setting up an automatic RSP contribution is easy and then you're set for the rest of the year, not to mention that it's a good way to budget for your RSP," says Caskey. "Contributing smaller amounts throughout the year may have less of an impact on your lifestyle, and you'll avoid a last-minute scramble. If you're worried about the impact of volatile markets on your savings, an advisor can help you build a balanced investment portfolio that gives you peace of mind."

Here's an example* of how contributing monthly over a longer period of time may help you when you reach retirement age.

If you invest $100 per month for 40 years, you can accumulate more than twice as much as someone who starts investing later, and then tries to catch up by contributing twice as much ($200 per month) for 20 years. While the total amount invested is the same ($48,000), consider the difference in results:

Total RSP balance after 40 years of $100/month contribution equals $199,149.

Total RSP balance after 20 years of $200/month contribution equals $92,408.

*This example is based on a constant 6% annual rate of return, compounded monthly, in order to illustrate the advantages of tax-deferred savings and compounded returns. Because actual returns fluctuate, the amounts shown do not necessarily represent the value you would actually accumulate in an RSP.

3) They think it's a better strategy to wait until the last minute to contribute.
Nineteen percent of Canadians suggest it's better to wait until the deadline, and 47% of Canadians say they contribute to their RSPs only in lump-sum payments.

"If you wait until just before the deadline and make one lump-sum payment, you're missing out on really making the most of your retirement savings," says Caskey. "Thanks to the power of compounding, contributing to your RSP throughout the year, instead of just before the deadline, can really make a big difference."

4) They may not be aware they can borrow to make an RSP contribution.
Only 11% of Canadians say they took out a loan in order to contribute before the deadline.

"For some Canadians, borrowing to invest in an RSP may be a good idea because they can use the resulting tax refund to pay back the loan, and often you can defer both the principal and interest payment until you receive your tax refund," adds Caskey. "Speak to an advisor to determine if this strategy is right for you."

For more information on financial planning for your retirement, visit

About the TD RSP Deadline Poll
Results for this study were collected through a custom, online survey fielded by Environics Research Group. A total of 664 completed surveys were collected with Canadians aged 25-64 who have an RSP and who are not retired. Data was collected between November 22-December 2, 2011.

About TD Bank Group
The Toronto-Dominion Bank and its subsidiaries are collectively known as TD Bank Group (TD). TD is the sixth largest bank in North America by branches and serves approximately 20.5 million customers in four key businesses operating in a number of locations in key financial centres around the globe: Canadian Personal and Commercial Banking, including TD Canada Trust and TD Auto Finance Canada; Wealth and Insurance, including TD Waterhouse, an investment in TD Ameritrade, and TD Insurance; U.S. Personal and Commercial Banking, including TD Bank, America's Most Convenient Bank, and TD Auto Finance U.S.; and Wholesale Banking, including TD Securities. TD also ranks among the world's leading online financial services firms, with more than 7.5 million online customers. TD had CDN$733 billion in assets on October 31, 2011.The Toronto-Dominion Bank trades under the symbol "TD" on the Toronto and New York Stock Exchanges.

About TD Waterhouse
TD Waterhouse represents the products and services offered by TD Waterhouse Canada Inc. (Member - Canadian Investor Protection Fund), TD Waterhouse Private Investment Counsel Inc., TD Waterhouse Insurance Services Inc., TD Waterhouse Private Banking (offered by The Toronto-Dominion Bank) and TD Waterhouse Private Trust (offered by The Canada Trust Company). TD Waterhouse Private Investment Advice is a division of TD Waterhouse Canada Inc.

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