Financial Services

Diversifying your investments among equities, fixed income investments and cash has been the cornerstone of sound financial planning strategies for some time. GICs can be a great fit for many investors looking to add more certainty to the fixed income portion of their portfolio.

GICs do offer one very important advantage when compared to other fixed income investments, they offer a guaranteed interest rate no matter what the financial markets are doing. This can help reduce overall investment risk within your portfolio while you are saving for your retirement years. 

Tax fee savings accounts (TFSAs) are a tax assisted plan that was introduced in 2009.

TFSA contributions are generally allowed to hold the same qualified investments as RSPs, such as cash, GICs, segregated funds, etc.

They are not tax deductible but the income earned is tax free and the money can be withdrawn tax free. 

Registered retirement savings plans are a way for you to tax deduct a certain amount of your income (restrictions apply) to save for your future retirement.

They can hold many types of investments, including GICs, savings accounts, segregated funds, etc.

The income earned is tax deferred until you withdraw it and everything you withdraw is taxable at that time. 

Registered Education Savings Plans can help you build an education fund for your child or grandchild by allowing you to earn investment income in a tax deferred environment.

Contributions to a RESP can also earn a government grant of 20% of the investment amount up to certain maximum per year and total.

They can hold many types of investments including GICs, savings accounts, segregated funds, etc.

The investment is not tax deductible, but the income earned is tax deferred until withdrawn. Normally the income earned and government grants are taxable in the child’s name on withdrawal. 

As an incentive to attract and maintain employees you may want to look at setting up a group RRSP program. Each employee can contribute as much as they like and the employer can match that contribution up to a certain dollar amount.

When it is time to retire your registered investment RRSP changes to a RRIF or Annuity.

An RRSP must be converted by age 71 to a RRIF and the first payment pays at age 72.

You can keep your investments in a RRIF but you must withdraw a certain minimum amount each year.

With an annuity you transfer your RRSP to a life insurance company and they promise to pay you a guaranteed income for life or a certain term, whichever you prefer.