Canadians living in Bermuda often forget to take care of one of their most valuable assets -- their RRSP's (Registered Retirement Savings Plans). As Canada represents just three percent of the world's stock market capitalisation, it follows then, that 97 percent of the best opportunities for financial gain and growth are outside its borders. When it comes to reviewing your RRSP investments, this is definitely something worth keeping in mind.

When most Canadians think of their RRSPs they think solely of Canadian investments. Most have no idea that a full 20 percent of the value of their RRSP can be held in foreign investments. And that's 20 percent of the book value. It's predicted that this proportion will be increased by the federal government in the coming years. So what does this mean for Canadian expatriates? To put it simply there are two compelling arguments for looking to add global diversification to your existing RRSP (if you have not done so already). The first is the tremendous opportunity for growth in markets that exist outside the Canadian border. While Canadian markets have performed well in recent years, they have typically underperformed most industrialised nations over the preceding ten years. Specifically, in examining the average annual growth rate of world markets over the last decade, Canada's advance represents about a third of the US, Europe and Japan, and about a quarter of the growth rate of Hong Kong. And when you stop to consider the opportunities offered by the fast-growth economies of the Southeast Asian countries, China, India, Latin America, and South Africa, the potential for greater returns is attractive indeed. Something to keep in mind when reviewing your next RRSP statement.

The second reason for pursing a global strategy is that true international diversification also adds a "defensive'' element to your portfolio. In addition to providing tremendous growth against short-term fluctuations experienced in a single market. Remember, there was time when a balanced portfolio meant that one held a broad selection of Canadian and US stocks and bonds. While this may have been true as recently as five or six years ago, with the increasing globalisation of securities markets, that investment philosophy has gone the way of the dial telephone.

By investing in markets that jig when Canada's jag you'll be protecting yourself in case of a drop in the Canadian equity market. You'll also be reducing your vulnerability to a decline in the Canadian dollar by having securities denominated in currencies of other countries.

It's surprising then that the vast majority of Canadian RRSP holders still haven't caught on. In a retirement survey recently released by Fidelity Investments a shocking 70 percent of RRSP holder report having no foreign content in their plan.

So why is growth is your RRSP so important for Canadians living away from Canada? Well, first not many Canadians can rely on government support programs to maintain their lifestyle through retirement. With an ageing population and massive government debt many of those programmes simply may not exist in the way they do now by the time baby boomers begin to retire.

The other main reason why a very strong RRSP is important lies in inflation.

It's a hidden tax. For every percentage point your retirement portfolio grows, it must be adjusted downward to account for the erosion of the purchasing power of the dollar. For example, if you earn $40,000 per year, in 10 years you would have to earn $59,210 to retain the same purchasing power you have today, assuming an annual 4 percent rate of inflation. In 25 years, that amount would rise to $106,663 -- income that will most likely have to come from one's accumulated savings at retirement.

In summary to get the most from your RRSP investments you should be taking advantage of the foreign limit. How best to do this? For most investors, mutual funds represent the easiest and most effective means of international diversification, either through an international portfolio fund or through depth in one particular region of the world, such as Europe, or Japan. Plan your nest egg properly regardless of where you take up temporary residence and you wont' have to ask yourself will I have enough money for my old age, but rather, will I have enough old age for my money? Tanya Logan is a Canadian-born financial consultant at Emerald Financial Group who has a special interest in assisting Canadian living overseas.