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Have you checked your retirement porfolio lately?

I haven’t checked my RRSP portfolio in a while. What with the market being the way it’s been over the past few weeks, I was too scared.

But right now. Two seconds ago, I logged in. And my stomach dropped.

Really. Really? It’s really THAT low?

I had to remind myself that I won’t need this money for another 40 years, but still. Ouch.

Pondering my RRSPs

If I keep up with my contribution pace of $662/month from now until December 31st, I will have contributed approximately $7,700 to my Retirement Portfolio (around $23-24k total).

My 2008 RRSP contribution limit is $9,685, so I’ll be well under that amount.

But … if I just stop contributing once I hit my $22k goal, then I’d have an additional $1-2k to save for other things (like a trip around the world, or my EF, or my Condo Down Payment).

Assuming I gross $45k this year, a $7,700 contribution would earn me a tax refund of $2,360 (according to Morningstar’s RRSP calculator). A $5,700 contribution would earn me $1,747. So to contribute an additional $2k above and beyond my $22k goal for 2008, I would “earn” an extra $613.

Hmm.

Adjusting my contributions to the Retirement Portfolio

So, I’m finally on my company RPP plan. So on my pay cheque today I contributed $65.52, which means with my employer’s 4% match, I put an additional $131.04 into my Retirement Portfolio.

Plus, the $400/month I already contribute to my RRSPs, that means I’ll be contributing $662.08/month into my Retirement Portfolio – which is about 25% of my net monthly income. Perhaps that’s a little too much.

Bi-weekly, in my RRSPs I’m currently contributing:
$50 Canadian funds
$100 International funds
$50 US funds

If I scale the International funds back down to $50/bi-weekly, that will free up an additional $100/month I could be saving towards something else.

Or, maybe I just keep my saving rate as it is, and see if I can continue contributing $662.08/month. I mean, really it’s only an additional $131.04/month. But, I also have to be careful about maxing out my RRSPs. I should take a look and see how much room I have left for this year.

And on that note, I need to start to research where to invest my money in my RPP. Although I don’t intend to stay very long at this job, and since the contributions are immediately 100% vested, I can just take them and consolidate them into my current RRSPs with TD Canada Trust once I leave the job. At least, that’s how it was explained to me when I started. So, maybe I should just keep them in my RPP account, and not actually invest in anything at the moment.

This is a lot to think about, for sure.

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