Investments play a key role in your financial plan and fulfill the ‘offensive’ side of your portfolio. For individuals or group plans, a mix of registered plans, non-registered, and tax free savings plans can help achieve short- and long-term goals. For employee groups, Dawn can offer advice on registered and non-registered savings and pension plans.
RRSPs and RESPs
A registered retirement savings plan (RRSP) has several advantages. For investors under age 72, it can allow tax-deferred growth and help accumulate savings to achieve long-term retirement goals. An RRSP is an account and therefore, various investments can be housed inside that account – examples are GICs, mutual funds, seg funds, market-linked GICs and various others.
For families with children, a registered education savings plan (RESP) can help finance post-secondary education.
Advantages of RRSPs and RESPs include:
- Tax-deductible RRSP contributions
- Tax deferral of compounding income and growth
- Based on a family’s net income and the amount contributed, a government RESP grant is available
- When money is withdrawn from an RESP, the student typically pays little tax, due to a low income tax rate
- In the year an individual turns 71, the RRSP must be changed into a Registered Retirement Income Fund (RRIF) or an annuity. Funds must then be withdrawn (a minimum amount in a RRIF) starting in the year of the individual’s age 72.
Working together, we can examine RRSP and RESP investment options in order to build a customized portfolio that takes into consideration your financial security goals, tolerance to risk and timeline. Contact us today to find out more.
RDSPs (Registered Disability Savings Plans)
Many families worry about how a loved one with a disability will be cared for in future years. Thanks to the Registered Disability Savings Plan (RDSP) and generous federal grants and bonds, now it is easier for people with disabilities to save for their long-term financial security.
The Canadian government can help you save by adding up to $4500 each year to the amount you contribute. The sooner you start saving, the earlier you can start building long-term financial security.
In order to qualify to open an RDSP, you are the recipient of the Disability Tax Credit (apply here), a resident of Canada, less than age 60 and have a valid Social Insurance Number.
RRIFs
A registered retirement income fund (RRIF) is utilized in the year a client turns 71, by year end. The client must change their RRSPs into RRIFs by December 31. In the following year, Canada Revenue Agency mandates a minimum amount be withdrawn from those RRIFs and income is then added to the individual’s income in that calendar year.
There are many strategies that clients can utilize to minimize tax when they are ready to withdraw from their RRSPs or RRIFs depending on their circumstances. A full analysis of a client’s taxable situation and income is necessary to provide the proper advice to ensure taxes are minimized if that is the client’s wish. Taxes cannot be avoided but this is where we can help provide you with advice to minimize those taxes. Contact us to determine your situation to minimize taxes.
Group Retirement and Savings Plans
For business owners, group retirement and savings plans can play a key role in attracting and retaining quality employees.
Just like you, your dedicated employees are working towards a safe, secure future. Either provided independently or paired with group benefits, a group savings plan is a convenient, flexible and affordable way to help your employees reach their long-term financial goals.
Employees gain instant tax savings with their group RRSP contributions, since they are made using pre-tax payroll deductions. They also receive the peace of mind that comes from knowing every month they are building towards retirement.
We can help you and your valued employees choose group retirement and savings products. We will design an investment plan tailored to fit the needs of everyone involved. Choose from products like:
- RRSPs designed specifically for groups
- Deferred profit sharing plans
- Defined contributions pension plans
- Non-registered savings programs and Tax Free Savings programs
Contact us to learn about how group retirement and savings plans can benefit your business