I have seen the rise and fall of RRSP programming.  I saw investors pour money into RRSPs trying to maximize every tax deduction and save for retirement.  Today investors are wondering whether it is still a good idea.  Remember, it is a tax deduction today, not at retirement.  Here are some of the mistakes I have seen.

First, procrastination—putting it off each year and then planning to really save at a later date.  The key factor as an investor is time and the compounding growth. Investing a small amount earlier may help you retire earlier.

Second, not knowing the real cost of your retirement.  In retirement planning, don’t ask yourself when you want to retire but how much you need each month during your retirement.  Keep that number in your head as your key retirement goal.  If you have enough to meet your plans, then you are in control and can say when you will retire.

Third, not understanding what risk really means.  The greatest risk to investments, about which few people are aware, is inflation.  Over time, inflation erodes returns, in turn reducing your future buying power. To keep ahead, your money has to work for you and your portfolio returns need to help keep ahead of inflation.

Fourth, adequate diversification.  Diversify your portfolio by asset class, geography, and style of investments.  Do you have all your equity investments in Canada?  Can you name three of four holdings inside your RRSP right now?  Are you comfortable with these holdings? Ask yourself these three tough questions.

Fifth, buying mutual funds based on last year-s performance.  Hey, anyone can pick a five-star fund; that’s why they rate funds, so everyone can pick them.  Find a consistent performer and management style over the long term, say five years.  Be skeptical of spectacular performance results from small funds.  High single-year numbers should raise caution flags.  Remember, as investors we are looking for bargains.

Sixth, staying too long with losing investments.  I know it is difficult to change, but you can ask for help.  Talk to an advisor who can help you change what isn’t working.  One phone call may give your portfolio a new life.

Seventh, missing income-splitting opportunities not purchasing spousal RRSPs.  Although the current Government rules allow for income splitting in retirement, the rules may not apply to you or may change again.

Eighth, no naming a beneficiary.  Your spouse can receive your RRSP tax-free and you can also name a charity (with certain provisions) as a beneficiary.

Ninth, disorganization, having statements all over the place and missing maturities and holdings.  Ask your advisor to help consolidate and get organized.

Tenth, not realizing how easy it is to transfer RRSPs from one institution to another.  Most financial institutions can hold assets of any kind and transferring is relatively easy and tax-free.