Registered Retirement Savings Plans (RRSP)

Like most Canadians, you likely want to retire happily and comfortably with personal and financial peace of mind.

The face of retirement is changing, however, and no longer are we all retiring at the same age or even with the same dreams.

Wouldn't it be nice to have a say in your retirement future?

Whether you are just starting your career or nearing retirement, one of the goals of your retirement plan should be to make your money last at least as long as you do. Planning and investing during your working years will help ensure that you will be able to live comfortably in retirement.

Your retirement advantage

A Registered Retirement Savings Plan (RRSP) is one of the best ways available to prepare for your retirement. Contributing to an RRSP lets you save money by earning income on a tax-deferred basis until retirement. Plus, the contributions made to your RRSP are tax deductible up to certain prescribed limits, so they can help reduce the amount of income tax payable.

Benefits of an RRSP

Tax deductible contributions: An RRSP can help lower your taxable income and lower the income tax you have to pay for the year. (The maximum contribution limit for the 2007 tax period is 18% of your previous year's earned income, up to a maximum of $19,000.)*

Tax deferral on investment earnings and income: The money you accumulate in your RRSP is tax-deferred until it is withdrawn. This can have a significant effect on the amount you have at retirement.

Tax deferred options at retirement: At retirement, you can transfer your accumulated RRSP into any of the RRSP maturity options, such as a Registered Retirement Income Fund (RRIF), where your investments continue to grow, tax-free, until you withdraw them.

Whatever your retirement goals are, the key to reaching them lies in starting early, contributing and investing regularly as well as making sure that you use up any unused contribution room.**

Our Financial Services Representative can show you how a retirement plan can help you enjoy your retirement.

Tax Free Savings Accounts (TFSA) 
 

Called the Tax-Free Savings Account, it will enable investors to contribute up to $5,000 a year. It was billed by Finance Minister Jim Flaherty in his budget speech as the "single most important personal savings vehicle" since the introduction of the RRSP.

Investors in these accounts will receive no tax deduction when they contribute. But they won't be taxed on amounts withdrawn either. What makes the account particularly attractive is that any capital gains, dividends, interest and other income are free of tax when held in the plan, and not taxable at the time of withdrawal either.

By comparison, RRSP contributions are tax deductible, while also allowing income earned within the plan to accumulate tax-free. But RRSP withdrawals are fully taxable at the individual's highest marginal tax rate.

The budget calls for the Tax-Free Savings Account to be implemented in 2009. Individuals who are at least 18 years old will be eligible to contribute, and unused contributions can be carried forward to future years.
In yet another provision that is different from RRSPs, the full tax-free amounts withdrawn (including gains within the account) can be replenished without any loss of contribution room.
Contributors to the new account won't have to worry about clawbacks in federal income-tested benefits and credits, such as the Guaranteed Income Supplement and the Canada Child Tax Benefit. Eligibility will not be affected by income earned in the tax-free account, or by withdrawals.

Contributions to a spouse's account will be permissible, and assets held in the account can be transferred to a spouse upon death without triggering a taxable event.

Registered Disability Savings Plan (RDSP)

Call us today for more details on how we can help. Or e-mail us and we will respond within one business day.

* Source: Canada Revenue Agency (CRA)
** See your Notice of Assessment from Canada Revenue Agency (CRA) for the total allowable contributions you can carry forward.

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