REGISTERED RETIREMENT SAVINGS PLAN
Registered Retirement Savings Plan
By far the most common method of saving for retirement. This is a federal government program designed to encourage you to save for retirement by providing tax benefits. Contributions are tax-deductible resulting in a possible income tax refund. Earnings on contributions such as interest, capital gains or dividends are taxed when withdrawn. The strategy is that when you are working, you are in a higher income tax bracket taking advantage of all the deductions. When you retire, you draw income from your RRSP at a presumption of a lower income tax bracket.
These are any investments where the contributions are not tax-deductible. This includes stocks, mutual funds and segregated funds to name a few. They can also be invested in the tax-free savings account making the interest work more for you.
When planning for your retirement, we look at the overall picture of your portfolio including any assets you have. A large asset for the majority of Canadians is their house. Will the house be paid off by the time you retire? How much will be left? These are some questions we will look at.
Not all savings account are the same. Different financial institutions offer different rates and services.
At Everlife Financial, you can choose from a variety of investment options. Some of them are:
high interest accounts
Canadian equity funds
US and international equity funds
Before You Invest
Make sure you understand how the investment works, including any fees, and whether it fits with your goals and risk tolerance. In investing, the higher the potential return, the higher the risk. There’s no such thing as a high return, risk-free investment. If you want higher returns, you have to be prepared to accept the risks that accompany them.
Before You Invest
Income tax is another important consideration. Interest, dividends and capital gains are all treated differently for tax purposes and that will affect your return from an investment. At Everlife Financial, we help you assess your financial needs, goals and tax situation. We also help you build a portfolio and recommend suitable investments for you. Whether you have an advisor or invest on your own, don’t invest in anything that you don’t fully understand. Take your time when making investment decisions and never sign documents you have not read carefully.