A savings plan is about the future but some plans can also help you make the most of your income right now. Our registered savings products are designed to do both by preparing you financially for what lies ahead while saving you tax dollars today.
Registered Retirement Savings Plans (RRSPs)
RRSPs are Government-approved savings plan that helps you accumulate savings for retirement. They can also reduce the federal income tax you pay today, shelter your future income, be used to cover a down payment for a home and even fund your post-secondary education.
Tax Free Savings Accounts
This registered savings account allows you to invest $6,000 for 2022.
The annual TFSA dollar limit for 2022 is $6,000.00. The cumulative contribution limit in 2021 is $81,500.
You can choose from deposit-type plans (term deposits), mutual funds and self-directed plans.
The biggest determining factor for TFSA vs. RRSP is your income now vs. at retirement.
If your income now is higher than it will be at retirement, then the RRSP is the most effective option for tax efficiency. If your income now is lower than it will be in retirement, then the TFSA is the most effective option for tax efficiency.
With this in mind, our strategies will usually include both components, just weighted differently depending on your unique situation and financial goals.
Registered Education Savings Plans (RESPs)
RESPs are a government-approved savings plan that help to ensure that you, your children or grandchildren have the funds to go to college or university one day. Other benefits include:
- you can contribute up to $50,000 per beneficiary
- qualify for additional funds through the Canada Education Savings Grant
- interest accumulates tax-free (contributions are not tax deductible)
- transferrable to other children or beneficiaries
- Get up to $2,000 with the addition of government money through the Canada Learning Bond, if you qualify.
With an RESP, the beneficiary won’t pay any tax on the fund until s/he enters an eligible post-secondary program. Since most students have limited income while in school, the taxes will likely be minimal at that time in their lives.
British Columbia Training and Education Savings Grant (BCTESG)
The Government of BC is offering a $1200 grant to help eligible children with the BCTESG.
- Both the beneficiary and Primary Care Giver must be BC residents.
- The grant is paid upon application between the beneficiary’s 6th and 9th birthday.
- Primary Care Giver needs to open an RESP account at the participating credit union.
Ask us about RESPs today.
Registered Retirement Investment Funds (RRIFs)
An RRSP is a product for saving for your retirement in a tax-efficient way. An RRIF is a product for withdrawing income during your retirement in a tax-efficient way. RRIFs are:
- allow for tax–deferred growth
- allow you to earn a competitive, guaranteed interest rate on your retirement income
- allow you to choose from several investment options including term deposits, stocks, bonds, mutual funds and ETFs
With a RRIF, you must make minimum mandatory withdrawals each year and these withdrawals are taxed. Ask us about RRIFs today.
Life Income Fund
A Life income fund (LIF) is similar to a RRIF, except instead of transferring savings from your RRSP, a LIF allows you to transfer savings from a supplemental retirement plan (pension fund). The amount accumulated in your employer’s pension fund can be transferred directly to a LIF if you quit your job or opt for early retirement. With a LIF:
- a minimum/maximum amount must be withdrawn every year
- the accumulated capital transferred from your pension plan continues to grow tax-free
- only the withdrawn funds are taxable
Ask us about LIFs today.
Employers can add value to their employee benefits by introducing a Group RRSP. In this collection of individual RRSPs, contributions:
- are taken from employees’ pre-tax pay through payroll deductions
- reduce employees’ income tax immediately
- provide employees with the opportunity to build their wealth slowly over time
- can be made in the employee’s name by either the employer, the employee, or both
At the time of an employee’s retirement, his/her portion of the Group RRSP can be transferred to a regular RRSP or used to buy an annuity. Ask us about Group RRSPs today.