Retirement and Investment Planning
Segregated Fund Policies
Segregated fund policies offer a long-term investment with death benefit and maturity guarantees. These guarantees are options within an insurance policy, other benefits are that the assets bypass the estate and potential probate fees, and go directly to your named beneficiaries.
Segregated fund policies are only available through insurance companies. Our professional fund managers invest in a variety of individual securities—unit values increase or decrease with the performance of the segregated funds you select.
Put the benefits of segregated fund policies to work for you. See how they can work to potentially guarantee your income for your lifetime, protect your capital investment and bypass estate and potential probate fees.
Mutual Funds
Our preferred mutual fund dealer, Quadrus Investment Services Ltd., gives you access to mutual funds—a long-term investment solution.
Registered Education Savings Plans (RESPs)
Consider saving for your child or grandchild’s education with an RESP. When you contribute to this type of registered plan, the federal government provides a grant to help you reach your goals faster.
Saving for your child’s or grandchild’s future becomes increasingly important as the cost of post-secondary education continues to increase.
RESPs offer an effective way to maximize the money available to your children or grandchildren when they enroll in a full-time post-secondary program.
You can choose from two plan types.
Individual plans – accommodate one beneficiary.
Family plans – allow for more than one beneficiary so you can add siblings.
The lifetime contribution limit is $50,000 per beneficiary. There are no annual contribution limits. You can make contributions each year for up to 21 years.
Although contributions are not tax deductible, the money within the plan grows tax-free until the designated beneficiary withdraws it.
The following grants are available:
Each beneficiary is eligible for the CESG.
- The federal government provides a 20, 30 or 40 per cent grant (dependent on family net income) on the first $500 contributed, and a 20 per cent grant on the next $2,000 contributed annually, to a lifetime maximum of $7,200.
- The grant is invested directly into the beneficiary’s RESP.
- Canada Learning Bond (for low-income families)
- Alberta Centennial Education Savings grant (for Alberta residents only)
Additional information about RESPs and the grants available can be found on Human Resources and Social Development Canada’s website.
Registered Retirement Savings Plans (RRSPs)
Contributing to an RRSP is still one of the most popular and tax-effective ways of saving for your retirement. Your financial security advisor and investment representative has the tools to help you build a portfolio so that you can meet your retirement goals.
To help Canadians save for retirement, the federal government makes tax allowances for those who contribute to registered plans.
You can save in 2 ways:
- Contributing money to an RRSP can lower your income, so you pay less in taxes.
- Once invested, your contributions grow tax-deferred. That means you don’t pay tax on any earned income or capital gains until you take it
- out.
Each year, Canadians may contribute up to 18% of their income, up to a maximum of $20,000 (as of 2008).
If you don’t contribute the maximum amount, you may accumulate the leftover room. Once contributed, the money becomes “registered.”
Since you receive tax benefits from contributing to an RRSP, there are restrictions on withdrawals. To deregister or withdraw funds, you must pay tax, an administrative fee and any fees associated with the investments.
However, in 2 instances1 you may withdraw funds without taxes:
Home Buyers’ Plan – allows you to withdraw up to $25,000 from RRSPs to buy or build a qualifying home for yourself (as a first-time home buyer).
- You may still qualify as a first-time home buyer if you own a rental property or if you have not recently owned a home.
- You have to repay the money over a 15-year period or pay tax on it.
Lifelong Learning Plan – allows you to withdraw money from RRSPs to finance training or education for you or your spouse or common-law partner. You cannot use these RRSP funds to finance a child’s education. The maximum amount you can withdraw is $20,000. There is an annual limit of $10,000. You must repay the money over a specified period of several years or pay tax on it.
You can use our investment products—segregated fund policies, mutual funds and guaranteed interest options—in your RRSP. To create an integrated retirement savings plan that meets your personal needs, talk to your financial security and investment representative.
Do you have unused RRSP contribution room? Taking out an investment loan to reduce your RRSP contribution room may improve your financial situation, both now and at retirement.
Under the rules governing registered retirement savings plans (RRSPs), you must collapse these plans by the last day of the year in which you turn 71. We can provide you a number of income options.
Tax-Free Savings Account (TFSA)
The TFSA, a type of investment account, allows you to earn investment income and generate capital gains from eligible investments tax-free.
A TFSA is not a traditional savings account. It’s a type of plan that allows you to earn many types of investment income tax free (including capital gains). A TFSA can help you save for a large purchase or supplement your retirement savings plan.
- The annual TFSA dollar limit for 2013 is $5,500. In the future, the maximum will be indexed to inflation and rounded to the nearest $500 on a yearly basis. Any unused contribution room is carried forward to future years. Contributions are not tax deductible. Income, losses and capital gains are not included in taxable income.
- Any resident of Canada who is 18 or older, and has filed an income tax return is eligible to contribute to a TFSA.
- You can have more than one TFSA, but the maximum allowable contribution amount applies to the total of all TFSAs you hold.
- There is no spousal TFSA, but you can give money to your spouse to contribute to his or her own TFSA.
- Unlike an RRSP, you can contribute to a TFSA even if you haven’t earned income.
- Increase contribution room by the same amount in the following year
- Do not affect eligibility for federal income-tested benefits and credits such as Canada child tax benefit, working income tax benefit, GST credit and old age security benefits.
- Are not included in taxable income.
- Can be made at any time and for any purpose.
To learn how a TFSA can fit into your financial security plan, please contact our office.
Registered Retirement Income Funds (RRIFs)
You’ve saved for your retirement and now you need an income. We provide the options you need for your retirement lifestyle.
RRIFs allow you to draw an income while growing your savings tax deferred. You only pay tax on the money you take out.
Under the rules governing registered retirement savings plans (RRSPs), you must collapse these plans by the last day of the year in which you turn 71. This means you must convert your savings plan to a vehicle geared to provide income, such as an income plan or an annuity.
- Registered retirement income funds (RRIFs) – a common option for investors converting their RRSP to an income plan.
- Life income funds (LIFs) and locked-in retirement income funds (LRIFs) – an income option for investors with locked-in registered retirement savings plans.
- Payout annuities – an option that provides guaranteed payments to meet your fixed-income needs.
- Prescribed retirement income funds (PRIFs) – for funds originating from locked-in RRSPs in Saskatchewan.
Registered retirement income funds (RRIFs) and payout annuities are the most common options.
When you convert your registered retirement savings plan (RRSP) to an income option, the capital keeps growing tax-deferred. You only pay taxes on the amount you receive from the income option. We can help you select the right type of policy for your retirement income plan.
Guaranteed Interest Options and Payout Annuities
To help you reach your financial security goals, we offer a wide range of products and services, including secure options such as guaranteed interest options and payout annuities. Guaranteed interest options protect your principal. Payout annuities guarantee your income.
We can help you reach your financial security goals. Guaranteed interest options protect your principal. Payout annuities guarantee your income.
Guaranteed interest options (GIOs) provide a guaranteed rate of return.
With a GIO and a named beneficiary you get the additional benefits of an insurance policy such as bypassing probate, legal and other estate fees on death.
As part of your financial security plan, payout annuities can provide guaranteed payments to meet your fixed-income needs. A payout annuity is a financial product that pays you a regular income for a fixed period or the rest of your life.
Insurance carriers offer a wide range of payout annuity types including:
- Single life annuity – provides a level or indexed amount of income for as long as you live.
- Joint and survivor life annuity – provides a level or indexed amount of income for as long as you or your joint-annuitant are living; when one dies, the survivor continues receiving the same income or a reduced income by a given percentage, as chosen at the time of purchase.
- Term certain annuity – guarantees payments for a fixed period of time as chosen at the time of purchase.
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