Registered Retirement Savings Plans
One of the best ways to save for your future is to invest in a Registered Retirement Savings Plan (RRSP), and benefit now with significant tax savings. Enjoy a tax-sheltered investment and use your RRSP contribution as an income deduction. You'll have a secure investment to draw upon during retirement when you're in a lower tax bracket, and when you need it.At Coastal Community we offer a variety of RRSP plans to meet your investment needs. Your plan can be flexible, have a great return and allow for a full range of investments. An RRSP can contain:
- myCoastal Retirement Plan
- Mutual Funds*
- GICs/Term Deposits
- Group Variable Savings Account
Do you know what it will take to create a secure retirement? Use this calculator to help you create your retirement plan.
Smart Moves for Your RRSP
No matter what’s happening in the markets, an RRSP is still one of the best ways to save for retirement. You get tax benefits plus the magic of compound interest working for you. So here’s how to make the most of your Registered Retirement Savings Plan.
If you act on only one idea here, make it this one. Because the difference between retirement success and failure isn’t how much money you make, or how smart you are, but how well you overcome the tendencies to procrastinate and under-save. So ask us to automatically transfer smaller, regular contributions from your chequing account to your RRSP. You’ll probably save more and there’s no more scrambling at RRSP season.
Save the max
Contributing your maximum is essential to taking full advantage of your RRSP. If you don’t have the money, consider an RRSP loan or using a line of credit. You'll pay interest, but the compounding growth of your money over the long term may far offset the interest costs. Another smart move — use your tax refund to pay down the amount you borrowed.
Make your contribution as early in the year as possible instead of leaving it until the 60th day of the following year when the RRSP deadline is looming. You’ll benefit from up to 14 extra months of tax-deferred compounded growth.
Use up your carried forward contribution room as soon as possible. If you can’t catch up in one lump sum, consider borrowing. Check the Notice of Assessment sent to you by the Canada Revenue Agency to find your unused contribution room.
Save for your spouse
If you’re the family’s higher income earner you can invest some or all of your contributions in your spouse’s RRSP and claim the tax deduction. The big benefit comes at retirement when more equalized nest eggs can reduce your combined tax bite and mean more cash to live on.
Name a beneficiary
If you don’t name a beneficiary your RRSP will be considered part of your estate and be subject to probate, taxes, and other fees. In some cases that can reduce its value by almost half. If you name your spouse or a dependent child/grandchild as the beneficiary, your RRSP transfers to them tax-free.
It’s practically ‘the’ universal law of saving — START EARLY. You’ll get time and compounding working for you. And that can make a big difference to how much you need to save. A person making $50,000 who wants a retirement income of $40,000 needs to put aside about 8% of their salary each year if they’re starting to save at age 25, but 22% if they’re starting at age 50.
Whether you’re new to investing, or a seasoned veteran, it’s always a good idea to get professional advice. So drop into any Coastal Community branch and talk us. One of our Credential Asset Management Inc. Mutual Funds Investment Specialists can provide you with an expert’s insight and help you make informed decisions about your RRSP.
myCoastal Retirement Plan is powered by Manulife Financial. Member Rewards Program starts once your savings balance reaches $25,000.
*Mutual funds are offered through Credential Asset Managment Inc., and mutual funds and other securities are offered through Credential Securities Inc. The information contained in this newsletter is provided as a general source of information and should not be considered personal tax advice, investment advice or solicitation to buy or sell any mutual funds ®Credential is a registered mark owned by Credential Financial Inc. and is used under licence.