Twin brothers Albert and Barney both graduate from university at the age 21. Albert has always been a diligent saver and invests $5000 per year in an Invesmar RRSP from age 21 until he is age 30 (a total of 9 deposits totaling $45,000).

Barney, meanwhile, enjoys traveling and partying and his first deposit to an RRSP is at the age of 30. He invests $5000 per year in an Invesmar RRSP from age 30 until he is age 69 (a total of 39 deposits totaling $195,000).
Through prudent financial management, both RRSP’s grow at an identical 8% compound annual rate of return.

Question: Who has more money in his RRSP at the age of 69 when Canada Revenue Agency requires the brothers to begin drawing a retirement income?

Answer: This may surprise you, but Albert (who only invested a total of $45,000) will accumulate $1,356,431 (no income tax has been deducted because the money grew inside an RRSP), while Barney (who invested $195,000) will accumulate $1,290,282.