Many Canadians may be questioning the value of investing in a Registered Retirement Savings Plan (RRSP) after 2008, when global stock markets posted significant declines in the second half of the year. From a long-term perspective, history teaches us that economies and stock markets are resilient and inevitably recover from such downturns. And if you don't want the risk equities bring, remember that your RRSP can hold investments that come with less risk, such as GICs

If you think you buy an RRSP, you wouldn't be the first person to make that mistake. Actually, you buy investments -- mutual funds, stocks, bonds, guaranteed investment certificates, annuities, etc. -- and register them with the federal government. When you retire, you'll be able to use the money you invested to help fund your retirement.

Is it a good idea to invest in an RRSP?
The simple answer is yes. Many people are putting money in RRSPs because they've been told they can reduce the amount of income tax they pay. For a lot of people, that's a good enough reason to contribute to an RRSP. Paying less income tax has always been a good idea.

If you're self-employed, you have another reason to invest in an RRSP. It may be the main way you save for retirement, since you likely don't have access to an employer pension plan.

And for many people, contributing to RRSPs will supplement the retirement income they'll receive from a pension plan, employer-sponsored group savings plan or government pension plans.

Whatever your reasons, one of the most important things you can do as far as investing in RRSPs is to start contributing regularly as early as possible. When you start early, you give your money more time to grow.

How much should I contribute to an RRSP?
If you're on a tight budget, try investing in small doses by setting up a plan where your contributions flow directly from your bank account to your RRSP on the day you're paid. A few dollars now will go a long way later. You'll be surprised at how quickly your RRSP will grow if you contribute regularly.

What should I invest in?
We have all heard the saying "don’t put all your eggs in one basket". That saying should be applied to your RRSPs as well. There are a variety of investment options including fixed income and equities, based on your individual risk tolerance and financial goals. You can also help your money grow by including foreign investments in your RRSP. A good financial advisor can help you understand which options are best for you.

"RRSPs are just one piece of your financial picture and nobody's situation will be exactly the same.," says Kevin Strain, Senior Vice-President, Individual Insurance and Investments, Sun Life Financial Canada. "Working with a financial advisor can help you create an overall financial plan that fits your current situation and helps you meet your goals for the future."

Does your employer offer a Group RRSP?
If you have access to a Group RRSP at work, having your contributions automatically deducted from your pay is not only convenient, you'll also enjoy an immediate tax break and access to some investment funds available exclusively to employer group plans. And depending on the group plan's design, you may be able to take advantage of some employer matching dollars, which is like receiving free money. Attractive fees also make this an option well worth considering.

For more information about RRSPs and retirement planning, or to find a Sun Life financial advisor visit www.sunlife.ca/MyRetirement

- 30 -

Nadine Ricketts
t: 416.979.6273 / 15-331-6273
nadine.ricketts@sunlife.com