Want to Be an RRSP Millionaire? 3 Tips All Retirees Should Know

Follow these tips and you’re sure to put your RRSP into millionaire status before you know it!

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If you’re looking to become a millionaire in retirement, there are a few tips that every Canadian should consider. Today, let’s get right into it and a stock that could help you achieve that millionaire status.

Make it automatic

One of the easiest things you can do to create millions through your Registered Retirement Savings Plan (RRSP) is to make automated payments. These payments should be included in your budget and involve not just eyeballing a number every month.

Instead, you’re coming up with numbers that you can put aside consistently month after month. These can come directly out of your account at the same time monthly or even after each paycheque! You can then go into your RRSP and decide where you want that money to be invested.

To determine the amount you can afford, look over your budget for the last three months. And just because you decide a number once doesn’t mean it can’t change. So, continue to look over your budget every three months and adjust as needed.

Consider taxes

There are two ways that investors should consider taxes if they want to achieve millions during their retirement. First, don’t take out money from your RRSP! Any cash you take out is counted towards taxable earnings, and that’s definitely a bummer. Secondly, you’ve made these plans on how much you need to contribute for retirement, and by taking money out, you’re throwing a wrench in those plans.

The other reason to consider taxes, however, is that for every dollar you contribute, this comes off your taxable income. So, contribute enough, and you could bring your cash down to a whole new tax bracket! You simply just need to stay within your deduction limit, outlined on your Notice of Assessment.

Bring that tax bracket down far enough, and you could be saving money that brings you a refund, which leads to my next point.

Invest your refund

You’ve already handed over money to the government, so don’t just spend it all. Instead, use that refund and pop it directly into your RRSP instead. This is an easy way to reach your goals far sooner than you expect.

A great option these days would be to consider stocks in the infrastructure and construction sector. These are due for a strong performance in 2024, as stocks reinforced their balance sheets and now need to expand — especially when interest rate cuts start coming down the line.

Investors should consider WSP Global (TSX:WSP) for their RRSP. It’s due to outperform in the next year, with analysts believing it will be one of the best picks of the year. That’s based on planned growth as well as profitability for the stock. It continues to capitalize on strong secular tailwinds as well as infrastructure stimulus investments around the world. Furthermore, it continues to improve margins, both from operational efficiencies as well as investments in tech.

And don’t forget, WSP stock is enormous. Yet despite all this, the stock is quite cheap, offering a dividend yield as well at 0.78% as of writing. Altogether, these three tips could create millions for any RRSP.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool recommends WSP Global. The Motley Fool has a disclosure policy.

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