Pension Transfers
If you leave your employer after participating in a pension plan for 2 or more years, you have a decision to make:
- leave your pension with your former employer (if available)
- transfer the pension to your new employer, or
- transfer the funds to a locked-in retirement account
You should consult your financial adviser to determine which option is best for you.
RRSP
Registered Products
Most financial experts agree that Registered Retirement Savings Plans (RRSP's) are one of the best ways for Canadians to save for their Golden Years. RRSP contributions are tax deductible and they can grow in a tax-sheltered environment until you withdraw the funds. Contributing to your RRSP through a pre-authorized chequing plan allows you to establish regular, disciplined savings habits which will benefit you in your retirement.
Segregated Funds
Segregated funds are insurance contracts that offer an alternative to mutual funds. Legally known as "individual variable insurance contracts", they are 'fund-based' like mutual funds. They also come equipped with a guarantee. At least 75%, and in some cases up to 100%, of the initial investment is guaranteed upon the maturity of the premium deposits or the death of the planholder, regardless of what the funds are worth on the market at the time.
You get the full potential for growth and the comforting protection of a guarantee.
Life insurance companies often partner with mutual fund or money management companies in offering these funds. The partnerships are structured so the money management company handles the investing of the money and the administration of the contracts and the insurance company issues the contracts and provides all the guarantees that are associated with them.
Retirement Savings
Mutual funds are composed of investors just like you who have mutually decided to pool their money and hire a professional investment manager. You don't even have to round up all your friends and convince them to invest with you. Existing mutual funds are offered by investment companies, banks, trust companies, credit unions, insurance companies, even professional organizations.
The main advantages of mutual funds are professional management and investment diversification. Because mutual funds are generally regarded as long-term investments, you don't have to worry about them daily. By not centralising all your funds in one specific stock or bond, you reduce your risks while increasing the possibility of gains.
Mutual funds have specific objectives. Some may concentrate on speculative growth investments, others on preservation of capital and a steady income. The trick is to find a fund that shares your objectives. Mutual fund portfolios may include common stocks, preferred shares, bonds, treasury bills, precious metals, and real estate in any combination.
Day-to-day investment decisions are made by the fund manager who decides the asset mix within the objectives of the fund.
Tax Free Savings Account
Do you know about a great way to save, tax-free?
The new Tax-Free Savings Account is a great way to take advantage of a savings opportunity! The TFSA is designed to encourage clients to invest in a non-registered GIC, and help them on their way to tax-free savings!
Contribute up to $5,000 annually, and withdrawal the money at any time for any reason, tax-free. Any interest gained on the principal is also tax-free!