Raymond Menard is a consultant with Investors Group

If the fast-approaching 2003 Registered Retirement Savings Plan (RRSP) deadline has you singin? the blues, take note of these RRSP tune-up tips and you?ll be humming a much happier melody when your tax refund cheque arrives and later, during the retirement of your dreams.

For 2003, your RRSP contribution limit is 18 per cent of your previous year?s earned income to a maximum of $14,500 (up $1,000 from the 2002 taxation year); minus the previous year?s pension adjustments – plus any unused contribution room carried forward from previous years.

Here?s the simple math on why it pays to make maximum RRSP contributions each year:

At age 25, you begin investing $250 a month in your RRSP ($3,000 a year). At age 60, assuming an annual return of eight per cent, your RRSP nest egg will amount to $538,825 in pre-tax dollars

Each year from age 25 to age 60, you top up your RRSP contribution by $1,500 (the maximum amount allowed by the government based on your income). At age 60, again assuming an annual return of eight per cent, you?ll have added $258,475 to your retirement nest egg. And, for each of those 35 years, you?ll have gained an additional tax deduction for each $1,500 of top-up money you invested.

Be sure to read part 2 of this article next week to get some last minute RRSP tune-up tips.

This column is presented as a general source of information only and is not intended as a solicitation to buy or sell investments, nor is it intended to provide professional advice including, without limitation, investment, financial, legal, accounting or tax advice. For more information on this topic or on any other investment or financial matters, please contact your financial advisor.