Where do you see yourself in the next five, ten, or twenty years? Do you know how much money it is going to take for you to accomplish your dreams and live the lifestyle that you want to live? As part of your financial plan, we will help you gain the financial literacy to figure that out – and what it will take to get you there.
Our professional financial advisors can help you set up RRSPs, TFSAs, RESPs and RDSPs to help you create and build the wealth you need to secure your financial future.
Segregated funds are completely separate from a company’s general assets, and are sometimes known as individual variable insurance contracts (IVIC). This type of investment offers maturity and death benefit guarantees, which would be anywhere from 75 – 100% of the initial investment. Similar to mutual funds, segregated funds are a pool of investments, like equities. Segregated funds do offer some benefits that mutual funds do not, like creditor and probate protection.
Investing can be a risk, but a GIC protects 100% of your investment capital while earning interest at either a fixed or variable rate. You can purchase GICs in 1 – 364 day terms, 1-5 years, 7 or 10 years. The interest is paid out at maturity, monthly, semi-annually or annually. Any registered, or non-registered plan, can invest in a GIC.
A life income fund is similar to a RRIF, with some restrictions. A LIF cannot be cashed out, but you’ll get regular payments. You can choose to receive your payments monthly, quarterly, semi-annually or annually and all payments received will be taxed. Any amount remaining in the fund will stay tax-sheltered and continue to grow. You must convert a LIF to an annuity by the time you turn 80.
A LIRA is designed to hold pension funds that are part of a Registered Pension Plan. The funds in this plan become unlocked when the registered member reaches retirement age, or the age outlined in pension legislation. Similar to an RRIF, you cannot make any further contributions to a LIRA. If you’re leaving a company and want to move your registered pension plan, you can easily transfer to a LIRA.
This plan is similar to a Life Income Fund but you don’t need to convert it to an annuity at the age of 80. Unlike an LIF, you can move provincially or federally regulated pension funds into an LRIF. You cannot cash out this plan all at once, but you can choose to receive monthly, quarterly, semi-annual or annual payments.
Contributions to CPP are mandatory for those who are working, whether employed or self-employed. If you work for a company, your employer shares the responsibility of contributing along with you. If you’re self-employed, you will contribute on your own. If you have earned at or above the maximum pensionable earning for 40 years, you will receive the maximum CPP payout in retirement.
While TFSAs aren’t designed for retirement like other investment plans are, they are perfect to help you with your short-term financial goals. Unlike an RRSP, the amount you’re allowed to contribute is capped for everyone and not based on your income level, although contributions made are not tax-deductible. You can withdraw the money from a TFSA at any time, and maintain your contribution limits.
Similar to an RRSP, an RRIF consists of investments held in to grow in a tax-deferred manner. An RRIF does have minimum withdrawal limits and you cannot continue to invest in it once an investment has been converted to an RRIF. This investment is best for those who have a large chunk of money to invest one time, and aren’t looking to make regular contributions.
If you’re worried about regular income in retirement, like you’re used to in your working years, a life annuity can help you prepare. This plan offers guaranteed income payments for you and your spouse, for your whole life. Many registered plans, like RRSPs and RRIFs, can be converted into life annuities. Policy holders can also integrate this payment with CPP and OAS payments.
OAS is designed to help those Canadians with residency, who have been in Canada for at least 10 years, when between the ages of 18 and 65. If, at 65, you have stayed for 40 years you can apply to receive the full OAS benefit. As part of this program, plan holders may be eligible for a guaranteed income supplement to help if they are considered to be in the low income category.
The RRSP program is a government assisted tax program designed to help Canadians save money during their working years for their retirement so they aren’t solely relying on CPP or OAS. There is an allowable limit each Canadian can contribute for maximum income tax return benefit, up until they turn 71. The money contributed is invested, and is tax-sheltered until it’s withdrawn.
Planning for a child’s future can help them start their career without the burden of overwhelming student loans. Family and friends can contribute to the plan for a child, at any time, to help with post-secondary costs. Your contributions can be withdrawn at any time, tax-free, and you can even gain up to 20% on part of your investment to help the fund grow.
Canadians with disabilities need to save for their future and retirement, but may feel unable to do so by using their disability payments. With a lifetime contribution limit of $200,000, anyone can contribute to a person’s RDSP and this money will be put into qualified investments. When it’s time to use it, plan holders can withdraw funds all at once or in annual payments.
Giving your employees security in retirement is feasible with a registered pension plan. Employers register and contribute regularly to a plan for their employees, and employees may be able to contribute as well. These plans give employees income for life when they retire from the company, or the option to transfer the investment when they leave the company if they aren’t retiring.