Start early to maximize your returns

It's never too early to start planning and saving for your retirement.

One of the best reasons to start early is the long-term benefit you get from compound interest, or earning interest on your interest.

Take the story of Jerry and Kiera for example, who graduated high school together. Kiera started an RRSP when she was 19, saving $2,000 a year until she was 42. She then stopped making RRSP contributions so she could focus on other financial goals.

Jerry, on the other hand, waited until he was 42 before starting his RRSP. He then began contributing $7,900 per year.

On their 65th birthdays, Jerry's RRSP is worth $410,586, almost as much as Kiera's $411,757. But Jerry had to invest $189,600 to catch up, while Keira only invested $48,000.

We assume both Jerry and Keira earn a 6% annual rate of return, compounded monthly. 

Jerry Kiera
Years of contributions 24 24
Annual contribution $7,900 $2,000
Total contributions $189,600 $48,000
Value at age 65 $410,586 $411,757

We can help

A Vancity financial advisor can help you start your retirement plan and help you keep it on track.