LANGLEY, BRITISH COLUMBIA--(Marketwired - Feb. 12, 2014) - During February, RRSP countdowns dominate the walls of financial institutions and advertising space everywhere, reminding us all about the pitfalls of failing to save early and often, or for some, serving as a warning about how woefully underprepared for retirement we really are.

But are RRSPs really the best option for everyone or could that money be best placed elsewhere?

According to Envision Financial expert Brenda Richards, there isn't a one size fits all approach when it comes to finances. When considering whether or not to contribute to RRSPs, it's best to first think through a number of important questions, she advises. These include taking into consideration your marginal tax rate, your long and short term goals, the length of time you have until retirement and your risk tolerance.

"RRSPs are best used as a tax sheltering and tax deferral tool and making contributions during your low income years means a smaller tax break," says Richards, a personal account manager. "Someone who's just starting off in their career and isn't making a lot of money may want to look at options outside of RRSPs."

Let's say you're making $35,000 in taxable income, for example. Your marginal tax rate will be about 20 per cent-which means you'll get 20 per cent of your RRSP contributions back after filing your taxes. Wait until your earning $49,000 in taxable income, and the amount you'll be getting back from any RRSP contributions jumps to nearly 30 per cent.

"When you're earning less, it would probably make more sense to put your money into a TFSA where you can still access the money and won't be taxed on any earnings," suggests Richards. "If you're starting to make more money and are looking for some tax relief, that's the time to start thinking about RRSPs. For people in higher income brackets, contributing to RRSPs is a very effective tax deferral strategy."

For those who are contributing to RRSPs, it's important to consider what to do with the tax return. Many view their tax return as extra spending money or "free" money, but Richards advises her clients to use money they get back to help them get ahead financially.

"Why not take that money and make a lump sum payment on your mortgage? You'll be saving a lot in interest costs and be mortgage free sooner," says Richards. "Another option is to use your tax return to make an early RRSP contribution for the following year."

Richards also stresses the importance of taking the time to sit down with an investment professional and make a financial plan. A recent study from BMO Financial Group found that only 59 per cent of Canadians have a financial plan and 82 per cent of those with a financial plan said having a plan helped them achieve their financial goals and 69 per cent with a plan said that they wish they had created one sooner.

"Many financial institutions offer this service at no charge," says Richards. "It's a great way to get an overall picture of your financial health so you can make wise financial decisions to help you get ahead and reach your financial goals."

About Envision Financial

Envision Financial is a division of First West Credit Union, B.C.'s third-largest credit union, with 40 branches and 28 insurance offices throughout the province operating under the Envision Financial, Valley First and Enderby & District Financial brands. Led by Launi Skinner, First West has $7.1 billion in assets under administration, more than 171,000 members and close to 1,300 employees. For eight years running, Envision was named one of the 50 Best Employers in Canada. For its extensive community involvement, Envision Financial is designated a Caring Company by Imagine Canada. For more information on Envision Financial, visit

Contact Information:

Media contacts: Envision Financial
Sarah Pederson
Senior Manager, Communications

First West Credit Union
Cheryl Shaw
Manager, Communications