Bank funds are protected against creditors. However, funds invested with Money Freedom are invested with insurance companies. With us, In case of death, the assets do not go through probate and are released right away to the beneficiaries. Investing with Money Freedom also helps you save the "Probate Taxes in unfortunate instance of death"

Give Us a Call 416-414-2204 so we can custom tailor an Investment Plan for you that can have the best return on your investments.

How RRSP Works

Anyone who files an income tax return and has earned wage, can open and add that to a RRSP plan.

Three tax advantages
  • Tax-deductible contributions: You get prompt expense help by deducting your RRSP contributions from your income each year. Viably, your contributions are made with pre-taxed dollars.
  • Tax-sheltered earnings: The profit generated from RRSP investments is not taxed as long as it remains in the plan.
  • Tax deferral: When you pull back your RRSP savings, you will have to pay tax on them. That incorporates both, your investment earning income and your contributions. In case, if you deferred the tax responsibility to the future when it's conceivable, your marginal tax rate will be brought down in retirement that was aimed towards your contributing years.
The amount you can contribute

Anyone who files an income tax return and has earned wage, can open and add to a RRSP. There are some constraints on the amount you can contribute to RRSP every year.

On the off chance that you are an individual member of a pension plan, your annuity adjustment will decrease the sum you can add to your RRSP.

 

You can convey forward your unused contributions

In the situation where you don't have the money to contribute, you can convey forward your RRSP contribution room and utilize it later on.

Bank fund are NOT protected against creditors where all Money Freedom funds are protected.

 

Investments you can hold in a RRSP Plan

In RRSP, investments that can be held are called qualified investments.
These investments include:

 

Investments you cannot hold in RRSP

As of March 22, 2011, you also cannot hold any of the following investments in your RRSP:

You will be charged a tax equivalent to half (50%) of your fair market value If you purchased these investments for your RRSP. You may apply for a refund on the off chance that you discard the investment from your RRSP before the years over, after the year tax is applied.

 

To Understand the risks

The estimation of your RRSP may go down and up depending upon the investments it holds.

 

How long your RRSP can stay open

In the year you turn 71 you must close your RRSP Account. You can easily withdraw your RRSP savings in cash, convert your RRSP to a RRIF or buy an annuity.

 

Where to open RRSP account?

 

RRSP or TFSA?

Both offer tax advantages. Figure out how they contrast by comparing TFSAs and RRSPs.

 

Two key points
  • You can open RRSP at any age as long as you have earned income and filed tax return.
  • You must close your RRSP when you turn 71.

How RRIF Works

A Registered Retirement Income Fund (RRIF) is an account enrolled with the government that gives you an unfaltering money in retirement.

Six things to know about RRIFs
  • You can open a RRIF whenever before the age of 71
  • Through transition of money from your RRSP you can open a RRIF Account. Transition from other registered plans like pension plans and DPSPs are permitted in specific circumstances.
  • You cannot make any more contributions to the plan when the RRIF is set up. However, you can have more than one RRIF accounts.
  • You can pick the types of investments to hold in a RRIF plan. Examples: GICs, bounds, stock, ETFs, segregated funds and mutual funding.
  • Withdrawal of minimum amount is required from your RRIF account every year. This amount increments as you get older. There isn't any maximum withdrawal restriction.
  • If you decide to pass out, money that is left in RRIF will go to your named recipients or to your bequest.

You have to fulfil the requirement of withdrawing base amount from your RRIF every year. There is no maximum withdrawal amount.

 

Three tax considerations

 

Pension income amount

If you are over the age of 65 and don’t have an organization pension plan, withdrawals from your RRIF may meet all requirements for the pension income amount. If this implies, you can withdraw $2,000 per year from your RRIF, tax free.

Bank fund are NOT protected against creditors whereas Money Freedom funds are protected.

 

Where to open a RRIF

 

Creditor protection

RRIF funds are shielded from creditors if you go bankrupt. However, if you open your RRIF account 12 months before you declare bankruptcy, it will be seized by creditors.

 

Key point

You must withdraw the base amount from your RRIF every year. However, there is no maximum withdrawal limit.

How TFSA Works

Tax-free savings accounts (TFSAs) are designed to help Canadians save more.

Benefits of Tax Free Savings Account

With the end goal to investigate the advantages of something, we should initially have an unmistakable comprehension of what it actually is.

Tax free savings account (TFSA) was first introduced in 2008, budgeted by the government of Canada as a brand new personal savings account to help Canadians save money. The trend of TFSA is increasing day by day. Through TSFA, you can set some money aside and watch those savings grow tax free throughout your life. Anyone above age of 18 is eligible to contribute money in TSFA. The annual contribution used to be $5000 from 2009 to 2012, then it became $5500 from 2013 to 2014 which increased up too $10,000 in 2015, fluctuated back to $5500 in 2016 and remains consistent. Coming to the topic, below are some of the benefits of TSFA discussed briefly.

 

9 things to know about TFSA
Bank fund are NOT protected against creditors whereas Money Freedom funds are protected.

 

Making transfers between TFSA accounts

If anyone has more than one account in TFSA he/she can use both accounts and can make transitions of funds between the accounts without having any influence to your TFSA contribution room as long as the transfer is done straight forwardly between the TFSA accounts. Ask to your financial institution or investment planner to know how to do this. On the off chance that you pull back money yourself from one TFSA and contribute that add up to another TFSA, it will view as a different contribution, not a transfer. That contribution will lessen, and may even surpass, your TFSA contribution room for the year. You might face some issues if you contribute more than the limit.

Year Contribution
2009 $5,000
2010 $5,000
2011 $5,000
2012 $5,000
2013 $5,000
2014 $5,000
2015 $10,000
2016 $5,000
2017 $5,000
2018 $5,000
Contribution limits by a year

TFSA contribution room is filed for inflation and annual limits vary by each year. If you don’t get a chance to contribute the full amount each year, you can convey forward the unused amounts, based on the contribution limits for each year. Here are the annual contribution limits for each year since 2009:

You can invest and withdraw money at any time, up to set limits. You do not have to pay tax for withdrawals.

 

Fines for defying norms

Example: shares of a company in which you have a significant interest (at least 10%).

 

Warning

You will have to pay heavy penalty if you intentionally over-contribute to your TFSA.

How GIC Works

A Guaranteed Investment Certificate (GIC) is an investment that works like a unique sort of store. By purchasing a GIC, automatically mean that you are allowing the bank to loan a financial institution your money for a set number of months or years (the term). At the end of the term you are ensured to get back the deposited amount.

9 things to know about GICs
  • $500 is the least amount you can invest
  • While purchasing a GIC, you don't have to pay any fee
  • There are some fixed rates of interest paid by GICs for a set term, such as 6 months, 1 year, 2 years or up to 10 years. Maturity date is the end of term
  • In view of the execution of benchmark, Some GICs offer variable interest rates such as a stock exchange index
  • When everything mentioned above is done, the more you draw out the term, the higher the interest rate you will acquire
  • You may get paid interest on your GIC monthly, every 3 months, every 6 months, once a year or only on the maturity date
  • With some GICs, on the off chance that you have to recover your money sooner, you will have to pay penalties. Another GICs — called cashable or redeemable GICs — enables you to recover your money whenever with no penalties
  • Your money is ensured, as far as possible, through the Canada Deposit Insurance Corporation (CDIC)

Note: This doesn’t apply to US dollar GICs or GICs with terms over 5 years.

In the event that you figure you may require your cash before the finish of the term, you can purchase a GIC that enables you to trade it out ahead of schedule with no penalties.

 

Make automated savings

You can organize a set add up (amount) to be taken every month, from your ledger or from your pay, to put toward purchasing GICs. This is frequently called a pre-approved charge (PAD), pre-authorized contribution (PAC) or pre-approved buy (PAB).

Bank fund are NOT protected against creditors whereas Money Freedom funds are protected.

 

3 key points
  • There might be a penalty to get your money out ahead of schedule
  • You recover the sum you saved toward the finish of the term
  • The longer the term, the higher the interest rate

How Life Annuity Works

An annuity is an agreement with a life insurance organization. You store a single amount of money, and they consent to pay you an ensured income for a set time frame or for whatever remains of your life.

An annuity is an agreement with a life insurance organization. You store an amount, and they consent to pay you an ensured income for a set time frame or for whatever remains of your life. Annuities are most usually used to produce retirement income.

 

Annuity fundamentals

You can purchase an annuity with cash from a RRSP, a RRIF or a non-enlisted account.
The money will come back to you, with interest, in customary instalments. You can get instalments for a set number of years or for whatever is left of your life. You can get month to month, quarterly, semi-yearly or yearly instalments.

How annuity instalments functions

Your annuity income is computed when you purchase the annuity. It is influenced by a number of factors. The most essential ones are loan costs and to what extent you're relied on it.
When you purchase an annuity, you cannot roll out any improvements to it. Your customary instalment sums are secured, and you cannot transform them for any reason.
In case you're over the age of 65 and don't have an organization annuity plan, you might have the capacity to guarantee the pension income tax credit. This implies you won't be taxed on the principal $2,000 of annuity income every year.

 

2 types of annuities

 

Guaranteed Minimum Withdrawal Benefit (GMWB) products

GMWB items are a kind of annuity that gives ensured retirement income that can increment with investment gains in your portfolio and with certain extra highlights.

Bank fund are NOT protected against creditors whereas Money Freedom funds are protected.

 

Three ways to buy an annuity

Some investments firms may likewise have a licensed broker that can offer annuities.

 

Look at annuity rates

When you purchase an annuity, your consistent instalments are secured. You can't transform them for any reason.

 

How your annuity is ensured

On the off chance that your annuity supplier leaves business, your annuity is guaranteed. $2,000 of every long stretch of your annuity pay is safeguarded at 100%. Sums over this amount are safeguarded at 85% if the firm is a part of Assuris.
The protection that covers your annuity is programmed. You don't need to do anything, and you don't need to pay anything additional to get it.

 

Key point

For a limited number of years, you are free to choose annuity income for a life time.

 

Cautions

When you purchase an annuity, you cannot get your reserve funds and you can't roll out any improvements to it. However, Your normal instalments are secured

How Segregated Funds Work

Segregated (or seg) funds are an investment product sold by life insurance companies.

Segregated (or seg) funds are an investment product sold by life insurance companies. They are singular protection contracts that invest in at least one basic resources. For example, a mutual fund.
In contrast to mutual funds, segregated funds give a certification to ensure some portion of the money you contribute (75% to 100%). Regardless of whether the fundamental store loses money, you are ensured to get back a few or all of your principal investment. Be that as it may, you need to hold your investment for a specific period of time (as a rule, 10 years) to benefit from the certification. Moreover, you pay an extra expense for this protection insurance.

Cautions

In the event of you cashing out before the maturity date, the certification won't have any significant bearing. You'll get the current market value of your investments, minus any expenses. This might be more than what you initially contributed.

 

Three advantages of segregated funds
Bank fund are NOT protected against creditors whereas Money Freedom funds are protected.

 

Three disadvantages of segregated funds

 

Retail versus group retirement plan segregated funds

If you have a workplace pension or reserve funds plan that is managed by an insurance organization, the fund options available to you will regularly be segregated funds. In any case, these segregated funds do not convey a protection ensure and don't have the higher expenses related with retail segregation subsidizes that you purchase as a person. Be that as it may, in light of the fact that they are protection contracts, they do convey the potential for creditors protections and the shirking of probate fees if a beneficiary is named.

 

Cautions

You will pay higher charges for a retail segregated fund because of the protection insurance it offers. Precisely consider your requirement for these highlights before you purchase.

 

Three main points
  • Higher expenses to take care of the expense of the protection security
  • 75% to 100% of principal is ensured upon death or maturity
  • Investment must be held until the point of maturity date (or until death if earlier) to get the guarantee

All bank funds are protected against creditors. However, funds invested with Money Freedom are all invested with insurance companies. With us, In case of death, the assets do not go through probate and are released right away to the beneficiaries. Investing with Money Freedom also helps you save the "Probate Taxes in unfortunate instance of death"

Give Us a Call 416-414-2204 so we can custom tailor an Investment Plan for you that can have the best return on your investments.