1. Do not just procrastinate when it comes to contributing to an RRSP.
It is just not going to happen by itself. You need to make a plan, then take action and be decisive. It is your life in retirement.

2. Also, take full advantage of the power of tax-free compounding within the RRSP.
This means, you should contribute as much as possible, early in life, even if it means postponing the purchase of a new house. A common regret among those now approaching retirement is that they did not put enough money into their RRSP early on. A person that starts an annual contributions of $5,000 at age 25 would have $998,176 at age 65, but only $204,977 if the contributions started half-way there at age 45 (assuming a compound return of 7 per cent annually).

3. You should also Work hard to research your alternatives or use an investment advisor to achieve the highest possible longer-run return.
The person who is contributing $5,000 a year from age of 25 would have an extra $296,567 in his or her RRSP at age 65 if the average annual return in the portfolio is 8 per cent instead of 7 per cent. Check out the numbers on one of the free RRSP calculators located at a bank or mutual fund website.

4. Do not take funds out of your RRSP, unless it is an emergency.
Not only will this withdrawal be fully taxed as an income, you will also miss out on the taxfree compounding mentioned above. In the meantime, you will be giving up valuable RRSP contribution room. With interest rates low, it may make more sense to borrow the money you need, including for buying a house (there are 100% mortgages available) or for education.

5. Do not pay unnecessary fees. Fees drag down the returns, so make sure you are getting a good value for money, for any fees you are paying.
This also means that you have to find out about the fees you are paying and judge if they are worth it. Many investment advisors will count on you not thinking about this fees. A good example is a bond fund holding government bonds and charging a management expense ratio (MER) of around 2 per cent a year thus chewing up half or more of the expected return. Another example is a balanced fund where the usual 2.5-per-cent MER is applied to the bond and cash components as well as to the equity component. Paying that much for an equity fund may be worth it, but it would be better to hold bonds directly or at least choose a low-fee bond fund, such as an exchange traded fund (ETF) for which the MER is less than 0.5 per cent per year.

6. Do not borrow to contribute on a catch up basis unless you are sure you can pay back the money you borrowed within a year.
The Interest on such borrowings is not tax-deductible. It might be better to start working on this year’s contribution by living on a budget and setting up a pay-yourself monthly contribution plan.

7. Also, do not ignore the income splitting benefits of contributing to a spousal RRSP.
The federal government’s new pension splitting rules mainly apply starting at age 65 and if you are smart in your RRSP investing, you probably will be in a position to retire earlier than that.

8. You must not forget to diversify your RRSP investments.
Large pension funds … spread out your investments among stocks, income trusts, hedge funds, cash (short term investments), bonds, and commodities.

9. Make sure you increase your international exposure to about 40 or 50 per cent.
People with high foreign content have not been particularly rewarded in recent years, given the 40-per-cent rise in the Canadian dollar, but that phase is over and international investing will be more lucrative from now on and will reduce risk in the investment portfolio.

10. Last but not the least …. You should find an investment advisor that you can trust …. but do not make the mistake of thinking that trust is enough in such a relationship.
You will need to get things in writing (especially if something goes wrong and you need a lawyer), you will also need to verify by reading all the fine print. Please remember, This is your money and no one will care about it as much as you. Watch it carefully, so that no one messes things up for you.