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If you get behind on your contributions, consider a catch-up loan. The loan can allow you to top up your RRSP to the maximum allowable contribution for the year, plus you can contribute more if you have unused contribution room. The upside is that the interest on the loan (which is not deductible on RRSPs) over one year would probably be substantially less than the tax savings when your contribution is fully deducted from your taxable earnings; plus you get the ongoing tax deferral on the growth of your investments. If you get a tax refund, use it to pay down the loan, reducing the time it takes to pay it back. It is preferable to set up a monthly RRSP contribution plan (using dollar-cost averaging) in order to avoid the need for a large loan prior to the annual contribution deadline. However, RRSP loans can be a benefit when • you have a high marginal tax rate and need more deductions; • you plan to pay down the loan with the tax refund from CRA; • your cash flow will easily facilitate repayment of the RRSP loan plus interest; • the market is bullish and you expect the gains within your RRSP to exceed the interest rate of the loan; or • the funds will be invested for the long term.

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