RRSP

Registered Retirement Savings Plans are individual savings programs made specifically for when you plan to leave your full time job. It is important to know that all Canadian residents (Natural or through permanent residency) have the right to a pension. In Canada there are three types of pensions: Public pension paid to a person who reaches 65 years of age. Pension contributions, made over time, in the amount of 5.4% of earnings. Pension from special pension funds, referred to as RRSPs. RRSPs are a popular type of personal savings, that people set aside for retirement. Transfers to retirement funds are tax-deductible and anything earned through investments are not taxed at all. Taxes are only charged when you withdraw from the plan.

Explore Insurance with Mileni

Should I use a RRSP or TFSA or both?

Low income:

TFSA can be an ideal savings vehicle if you’re in a low-income tax bracket. RRSPs may not be well suited to low-income Canadians. As the earlier example demonstrates, the RRSP account tax savings are insignificant and may be in a higher tax bracket when you withdraw. You may also consider that TFSA withdrawals don’t impact income-tested benefits and credits, such as child tax benefits and credits, Old Age Security, or Guaranteed Income Supplements.
 
If you now find yourself in a lower tax bracket, such as when on maternity leave, and made RRSP contributions in the past, consider withdrawing from your RRSP to make a TFSA contribution. However, remember that funds withdrawn from your RRSP can’t be re-contributed later.

Middle income:

One strategy would be using RRSP calculator contribute to your TFSA now and accumulate RRSP room to be used later in a higher tax bracket to optimize the tax benefits.

High income:

This is where you may want to maximize your RRSP contribution limit and TFSA contribution. The tax savings or refund received from the RRSP contribution could be used to fund the TFSA.

The first insurance in the country is a medical policy coming to Canada - Visitors to Canada Insurance (Travel Insurance Canada).

Explore Insurance with Mileni

How much do I need for retirement?

Previous
Next
Predicting your retirement needs is best started by assessing your current expenses and pinpointing future costs related to your work that will decrease when you retire, such as clothing, eating out, gas, etc…
When planning for retirement, think about different scenarios that could affect your income, such as:

 

Also, take into account any large debts such as mortgages. Will you finish paying your mortgage by the time you retire? Or are you considering buying a smaller home or moving into a nursing home?
Solutions to such issues may also affect your costs. You need to take into account how long your pension payments will last.
It is an important consideration. Would you be able to live if your pension payments were expanded by thirty years? If you put off retirement for another five years, your savings will only last twenty-five years, but you will earn an additional five years of salary. It can make all the difference in your budget.

 

You were deciding to retire early for personal or professional reasons— significant unexpected expenses, such as urgent repairs to your home. A serious health problem affecting you or your loved one requires costly medical care. Try to evaluate the impact of such events on your finances. This action can help you build a realistic retirement fund. Take this opportunity to see if your disability or critical illness insurance policy is sufficient for your needs. Your health, financial situation, and plans will change over the years. The closer you get to retirement age, your needs will become apparent. To ensure you’re on the right track, reviewing your retirement plan from time to time is essential.

 

Feel free to consult with a specialist regularly to test different scenarios and choose the plan that is comfortable for you.

The first insurance in the country is a medical policy coming to Canada - Visitors to Canada Insurance (Travel Insurance Canada).

Explore Insurance with Mileni

Previous
Next

No minimums or fees

There’s no minimum balance needed to start saving, no setup or monthly fees, and no fees to deposit or take out money. Keep in mind that withholding taxes may apply to withdrawals.

Pay less tax in retirement

When you retire, your income will probably be lower than it is now. That means the money you and your spouse take out of your RRSPs will likely be taxed at a lower rate.

Borrow to pay for a first home or education

Take out up to $35,000 to make a down payment on your first home with the Home Buyers’ Plan and up to $20,000 for your or your spouse’s education with the Lifelong Learning Plan. Faster growth without taxes while you save In your RRSP, taxes aren’t applied until you start withdrawing your money. Instead, every dollar in your account keeps growing.

Pay less tax today

When you contribute to your RRSP (or your spouse’s), you lower your taxable income and pay less tax today.

Lower risk in your retirement portfolio

Your money will earn a high-interest rate and won’t depend on stock market returns. Plus, your savings are eligible for deposit insurance from the Canada Deposit Insurance Corporation (CIDC).

RRSP investment options

image

Registered Advantage Account

Get a high rate of return on your money while having easy access to it when needed.

No minimum investment

All deposits earn the same high-interest rate

No setup fees

image

Long-term GICs

Lock your money in to earn guaranteed returns in a secure, simple investment.

$2,500 minimum investment

Competitive rates on 1-year to 5-year terms

No setup or maintenance fees

image

Short-term GICs

Stay flexible and keep your options open with investment terms of up to a year.

$25,000 minimum investment

Competitive rates on 30-day to 364-day terms

No setup or maintenance fees.

For more information – 647-993-8405

The first insurance in the country is a medical policy coming to Canada - Visitors to Canada Insurance (Travel Insurance Canada).