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Warning to RRSP procrastinators: The contribution deadline is Monday

Decisions about your RRSP contribution made at the last minute are bound to be poor ones.

Les Cunliffe

If you haven't made a contribution to your RRSP account so far this year, investment advisers say you are not alone.

But while the volatile ride the Toronto Stock Exchange has taken in recent months may have given reason to procrastinate, the deadline is just around the corner.

Linda MacKay, senior vice-president for personal savings and investing at TD Canada Trust, said the stock market fluctuations in recent months may have some pondering what's the right thing to do.

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But, she said, the earlier people start saving for retirement, the better.

"It is incredibly difficult to time the market and typically if you do try to you're going to probably miss some of the best times to buy," MacKay said.

"People who are nervous about the market tend to hit the worst days and miss the best days. We know over the long run if you have a good plan and you're focused on your long-term goals then staying invested in the right investments for your risk tolerance is a better strategy."

For people who want to make an RRSP deduction when they file their tax return for 2015, they have to make their contribution by Monday.

Frank Bilodeau, vice-president for the Ottawa and West Quebec district at Scotiabank, acknowledged that everyone faces demands on their time every day. But he urges people not to let opportunity pass.

He says if people don't have time to meet with a financial adviser, they may want to consider making the contribution, but parking it in a high-interest saving account for a week or two until they can. But it is important to make the time to follow up with a financial adviser and invest the money based on a financial plan.

"That followup meeting is really worthwhile," Bilodeau said.

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A poll done for CIBC found that half of Canadians said they won't be contributing to their RRSP this year.

When asked why, 17 per cent said they preferred other investment options such as tax-free saving accounts, but 41 per cent said they didn't have the money and 14 per cent said they had other financial priorities.

The poll done for CIBC was based on an online survey of 1,501 panellists done on Feb. 9 and 10. The polling industry's professional body, the Marketing Research and Intelligence Association, says online surveys cannot be assigned a margin of error because they do not randomly sample the population.

Helene Marquis, regional director for tax and estate planning at CIBC Private Wealth, said setting up a proper investment plan even if people are making a last-minute RRSP contribution is key.

Once that's done, set up a plan for next year, she says.

"Instead of procrastinating once again and waiting until the next deadline to contribute next year, the best thing maybe is to create a savings plan on a regular instalment basis," she said.

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"When you put your money in a saving plan by regular instalment from your paycheque or whatever you want, at the end of the day you forget it and becomes part of your cost of living."

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