Which investment option is right for me?
Will I be able to retire when I choose to?
What should I know about investment lending?
Compare your investment options
Whether you invest in a TFSA, RRSP or a non-registered account depends on a number of factors. It’s not that one is better than the other; rather they have different features and benefits. Your personal savings needs will help you and us determine which type of investment is right for you. The chart below compares some of the features of each account type.
TFSA or RRSP
The TFSA is not designed to compete with, but rather to complement, other savings plans. Each savings plan type has a role in investment planning and each can be used to satisfy a specific objective. We can help you determine how the TFSA can best work for you.
Some things to consider when choosing between a TFSA and an RRSP are:
- Pension adjustments may reduce RRSP contribution limits, making the TFSA preferable
- RRSP contributions are not available to those over age 71
- Consider contributing more to an RRSP when you’re subject to a higher tax rate
- If you have maximized your RRSP contribution consider making a TFSA contribution
TFSA or non-registered account
This example shows TFSA tax savings compared with investments in a non-registered account over periods of five to 20 years. As you can see, a portfolio of investments held in a TFSA could save you significantly more taxes than if the investments were held in a non-registered account.
Assumptions:
- $5,000 contribution per year at mid-year
- Average annual rate of return is seven per cent for the portfolio producing capital gains
- Capital gains taxed at 21.8 per cent
- These examples assume taxes on the non-registered account are paid from sources other than this account. If taxes were paid from this account, leaving less to compound, the non-registered account values would be lower
** In a non-registered account the withdrawal itself is not included in income, but the disposition of assets may give rise to a taxable capital gain or loss that must be included in income
*** With the exception of Home Buyers’ Plan and Lifelong Learning Plan
Will I be able to retire when I choose to?
At the heart of every financial plan is a written financial analysis. This personalized report becomes your road map to reaching your financial goals. Detours can happen and plans can change, but by reviewing your plan annually these changes can be accounted for. See what a personalized financial analysis looks like.
* CLICK HERE TO SEE AN EXAMPLE
* This information is provided for your convenience only. It is in no way an endorsement of the information provided by these third parties. Vold Financial Group Inc. has not reviewed or endorsed this concept or its marketing materials and strategies. Your financial security advisors are not affiliated with the contacts listed, and make no representation, warranty or guarantee of the information offered.
What should I know about investment lending?
Borrowing to invest is a strategy used for building wealth both inside and outside of your RRSP.
An RRSP loan can be used to maximize your annual contribution or catch up on unused contribution room. This helps you now and in the future because it gives you more money earlier to grow your investment and reduces this year’s tax bill through an income deduction equal to the amount of your allowable RRSP contribution. An RRSP loan means more money works now towards your retirement in the future.
A non-registered leveraged loan can provide you with the potential to reach financial goals sooner, and take advantage of potential income tax deductions. This strategy can be an effective tool for the right person.
