Are your assets protected from creditors?
Legislation exists at both the federal and provincial level to protect your investments from creditors. Some offer strong protection, while others provide protection with conditions or limitations. Click here to read more.
Registered Retirement Savings Plan (RRSP)
An RRSP is a retirement savings plan that you establish, that is registered with the Canada Revenue Agency, and to which you or your spouse or common-law partner contribute. Deductible RRSP contributions can be used to reduce your tax.
Any income you earn in the RRSP is usually exempt from tax as long as the funds remain in the plan; you generally have to pay tax when you receive payments from the plan.
To learn all the facts, please contact us.
Registered Disability Savings Plan (RDSP)
The Registered Disability Savings Plan (RDSP) is a long-term savings plan to help Canadians with disabilities and their families save for the future. If you have an RDSP, you may also be eligible for grants and bonds to help with your long-term savings.
You should consider opening an RDSP if you have a long-term disability and are:
- eligible for the Disability Tax Credit (disability amount);
- under the age of 60 (if you are 59, you must apply before the end of the calendar year in which you turned 59);
- a Canadian resident with a Social Insurance Number (SIN); and
- looking for a long-term savings plan.
You may contribute any amount to your RDSP each year, up to the lifetime contribution limit of $200,000. With written permission from the RDSP holder, anyone may contribute to the RDSP.
Registered Retirement Income Fund (RRIF)
A RRIF is a fund you establish with a carrier and that is registered with the Canada Revenue Agency. You transfer property to the carrier from an RRSP, RPP, or from another RRIF, and the carrier makes payments to you. Establishing a RRIF can be done at anytime, but must be done no later than the year the annuitant turns 71. Once a RRIF is established, there can be no more contributions made to the plan nor can the plan be terminated except through death.
You can have more than one RRIF and you can have self-directed RRIFs. The rules that apply to self-directed RRIFs are generally the same as those for RRSPs.
For more information, please contact us.
Source: Canada Revenue Agency
Tax-Free Savings Account (TFSA)
The Tax-Free Savings Account (TFSA) allows Canadians, age 18 and over, to set money aside tax-free throughout their lifetime. Each calendar year, you can contribute up to the TFSA dollar limit for the year, plus any unused TFSA contribution room from the previous year, and the amount you withdrew the year before.
The annual TFSA dollar limit for 2017 is $5,500.*
All income earned and withdrawals from a TFSA are generally tax-free. Plus, having a TFSA does not impact federal benefits and credits. It's a great way to save for short and long-term goals.
To learn all the facts, please contact me.
* For more information, please visit Canada Revenue Agency's TFSA website.
What is a mutual fund?
A mutual fund is an arrangement under which shares or units are sold to raise capital.
Investors purchase units if the mutual fund is a trust or purchase shares if the fund is a corporation. When you invest in a mutual fund, your money is pooled with the money of other investors and invested on your behalf by the fund manager. Mutual fund trusts and corporations are also known as flow-through entities.
For tax purposes, a flow-through entity treats the taxable income earned inside the entity as if you held the investments directly, instead of through the fund. The income that is distributed, or flowed out to you, keeps its identity. For example, dividend income remains dividend income, and capital gains remain capital gains when they are flowed out (or distributed) to investors.
For more information, please contact me.