Investments

investment products

Powerful savings and investment tools to help you reach your short term and long term goals.

Turn your retirement savings into income that will not fall short of your life expectancy

Other retirement solutions to help you protect your money and accumulate your wealth over time:

Tax minimization strategies (tax avoidance)
Cash wedge strategy
Income splitting
Charitable donations
Immediate financing arrangement
Wealth transfer strategies

Segregated Funds

Segregated funds, like mutual funds, are market-based investments. A large pool of money belonging to many people is invested in stocks, bonds or other securities with the goal of increasing the value of the entire pool. However, because segregated fund contracts are insurance contracts, they have special benefits that mutual funds do not.

Segregated fund contracts guarantee 75% to 100% of your premiums (less withdrawals) when the contract matures, or on your death. Some segregated fund contracts also offer income guarantees.

Money invested in segregated funds contracts may also be protected against seizure by creditors. This can be a big advantage for business owners and professionals wanting to protect against an unexpected lawsuit or bankruptcy. Consult your tax and legal advisors for details.

Segregated fund contracts purchased with non-registered money let you name beneficiaries, so the death benefit bypasses your estate and goes directly to them. You can also control how they get the benefit: as a lump sum or in the form of a payout annuity.

TFSA

A TFSA, is a flexible, general-purpose savings vehicle that allows you to make contributions each year and to withdraw funds at any time in the future. A TFSA provides you with a powerful incentive to save by allowing the investment growth to accumulate and be withdrawn tax-free. However, unlike an RRSP, you can’t claim a tax deduction for contributions you make to a TFSA and your withdrawals are added back to your unused contribution room for the following year.

TFSA may invest in a wide range of qualified investments such as stocks, bonds, and other popular portfolios including mutual funds, segregated fund contracts, and GICs. Once you contribute funds into a TFSA, any growth or income earned on the underlying investment will not be taxed nor will it be taken into account for the purposes of determining your eligibility for federal income-tested benefits and credits such as Old Age Security (OAS), the Guaranteed Income Supplement (GIS), the Canada Child Benefit (CCB), Employment Insurance (EI) benefits, goods and services tax/harmonized sales tax (GST/HST) credit, and the age amount credit. There’s no restriction on how withdrawals can be used. Withdrawals may be made for personal reasons, investment, education,
or any other purpose.

RRSP

An RRSP , is a retirement account that is registered with the Canada Revenue Agency (CRA) and that you or your spouse make contributions to. Because deductible contributions can be used to reduce your tax and because income or growth earned in the plan is usually exempt from tax while the funds remain in the plan, an RRSP acts like a tax shelter that provides you with a powerful incentive to save money for your retirement years. You can open an RRSP at many financial institutions including: banks, trust companies, life insurance companies, credit unions, caisses populaires, mutual fund companies and stock brokerage firms. An RRSP is designed to hold a number of qualified investments such as stocks, bonds, and other popular securities including mutual funds, segregated fund contracts and GICs2.

RRSP contribution room is generally available to you if you have earned income. Once you contribute funds into an RRSP, any growth or income earned on the underlying investment will not be taxed until you withdraw that money. In addition, you can claim tax deductions for contributions you make to your RRSP. Since you received a tax deduction when you contributed funds to the RRSP and the funds accumulated on a tax-free basis, when withdrawing those funds prior to the plan’s maturity, it will be regarded as taxable income by the government and will be subject to tax in the calendar year you receive it.

When you hold the RRSP until the plan matures, the money you’ve saved can be withdrawn as a lump sum. But if you decide to go this route, the money you withdraw will be regarded as income and taxed in the calendar year you receive it. This could trigger a large tax bill. There are alternatives, however. By using your accumulated savings to purchase a retirement annuity or open a Registered Retirement Income Fund (RRIF), you are able to delay the receipt of your funds, and consequently, continue to defer paying tax on the savings remaining in the plan.

RESP

An RESP, is a tax-sheltered investment plan. Unlike a registered retirement savings plan (RRSP), the contributions are not tax deductible; however, the investment growth compounds tax-free until withdrawn and the contributions can be returned to you as the subscriber without tax consequences. The remainder goes to the beneficiary (e.g., a child or grandchild) and is taxable to them as income when it’s withdrawn for a post-secondary education program. In other words, it’s only the growth and any government grants that would be taxable in the hands of the beneficiary.

The lifetime contribution limit on all RESPs is $50,000 per beneficiary, which is in addition to the Canada Education Savings Grant (CESG) limit of $7,200. The CESG is paid into an RESP at a rate of 20 per cent of your contributions, up to an eligible annual maximum contribution limit of $2,500 or up to $500 per year in CESG funding.

When most people think of registered education savings plans (RESPs), they think of an educational savings plan for children. Did you know that RESPs are a great savings plan for adults too? In fact, self-funded RESPs are a smart investment for individuals who are planning on going back to school (i.e., for a change in career or retirement studies), or can even be used as an income-splitting tool. It’s a common misconception that RESPs are only useful for parents saving for their child’s postsecondary education. With a little financial savvy, an RESP can provide an effective means of funding an adult’s education and it can also provide an income-splitting opportunity as well.

Generally, investments that qualify for a registered retirement savings plan (RRSP) qualify for an RESP. Unlike RRSPs, however, contributions to an RESP are not tax-deductible, which allows the contributor to withdraw their original contribution at any time on a tax-free basis. In addition, you’re not forced to withdraw the funds from the RESP at age 71, like an RRSP, and incur an income inclusion. This provides some deferral against income-related clawbacks like Old Age Security.

RDSP

A Registered Disability Savings Plan (RDSP) is a registered savings plan that is intended to help parents and others to save for the long-term financial security of Canadians with disabilities who are eligible for the Disability Tax Credit. A RDSP offers benefits that are too good to ignore. Created by the federal government, the RDSP provides people with disabilities with an easy and effective way to save and invest for their long-term financial security. What’s more, the government offers incentives in the form of grants and bonds to help you accumulate more. If you are a person with a disability or provide care to someone with a disability, you’ll definitely want to know more about RDSPs. As a registered savings plan, earnings grow tax-free until money is withdrawn. This means RDSP contributions can grow faster, helping to accumulate more in the plan.

RDSPs may be eligible for government incentives of up to an annual amount of $3,500 to a lifetime maximum of $70,000 in grants and an annual amount of $1,000 to a lifetime maximum of $20,000 in bonds, which can substantially boost an RDSP’s value. Anyone can contribute to an RDSP as long as they have written permission from the account holder. There is no annual limit on contributions and the lifetime maximum is $200,000. However, contributions must cease by the end of the year in which the beneficiary reaches age 59, no longer lives in Canada, no longer qualifies for the Disability Tax Credit, or when the beneficiary dies. Consider making automatic RDSP contributions at regular intervals throughout the year – you will find it easier on your budget and a convenient way to reach your target annual contribution amount before the December 31st deadline each year. Keep in mind that the sooner your money is invested in an RDSP, the longer it has to grow tax-deferred.

Investment Loan Programs

Investment Loan Program: If you are an investor who makes regular contributions to your non-registered investment accounts, there is a strategy available that may allow you to increase your net worth over the long term and make your regular contributions tax deductible. Many investors make regular contributions to their non-registered investment accounts. These include high income earners who have already maximized their Registered Retirement Savings Plan (RRSP) contributions and are looking for additional ways to save for retirement, those who have just started to save for retirement and have a long investment horizon, and anyone else who finds that regular contributions make sense for them.

If you are temporarily short on cash and can’t contribute to your registered retirement savings plan (RRSP), an RRSP loan may be just the thing for you. In fact, the money you receive from your tax return and investments might even cover the cost of the loan. This way, you can continue to contribute to your RRSP or increase your contributions, no matter your financial situation. What’s more, if you use your tax return towards payment of your loan balance, the loan will be repaid more quickly. Anyone under 71 years of age who earns employment income can contribute to an RRSP. Moreover, the money invested in an RRSP can be used to purchase a property (HBP) or to go back to school (LLP). You should know that there are several investment funds that meet the needs of all types of investors, from the most cautious to the most aggressive. Investment loans are particularly useful for seasoned, long-term investors with a portfolio of non-registered assets to increase investment growth potential through use of a leveraging strategy, reduce taxable income with tax-deductible loan interest and maximize potential returns.

Insured Retirement Program

Insured Retirement Program (IRP) is an innovative financial planning concept that transforms a life insurance policy and a bank loan into the potential for tax-deferred accumulation of funds today and tax-free access to those funds in the future. The concept is simple: the accumulated value of an exempt life insurance policy purchased today provides you with cash flow in the future by serving as collateral for a loan. With traditional non-registered savings vehicles like GICs, mutual funds, and stocks, tax is payable as income is earned and this diminishes the amount available in retirement. Put the excess savings into a life insurance policy where the funds can be accumulated on a tax-sheltered basis. In retirement, you can use the life insurance policy as collateral for a bank loan. Loan proceeds are tax-free. On your death, the life insurance proceeds are used to pay off the loan. Any proceeds not required to satisfy the loan payment will be available to your beneficiaries. If you have sufficient time to build up investments before retirement, this strategy will enhance your retirement cash flow on a tax efficient basis. If you don’t already own a life insurance policy with a substantial cash surrender value, you purchase one on your life, and overfund the policy to maximize the policies accumulated available cash value. These values can be accumulated on a tax-sheltered basis. When you retire, you can leverage the life insurance policy and, the financial institution, subject to their lending policy, may give you a loan or series of loans. Loan proceeds are tax-free under current tax rules. The loan (or series of loans) is used to supplement your retirement cash flow. On your death, the life insurance proceeds are used to pay off the loan. Any proceeds not required to satisfy the loan payment will be available to
your beneficiaries.

Annuities

Annuities - Your investment portfolio includes interest-bearing investments such as GICs, term deposits, bonds and bank accounts. You’re using the interest earned by the investments to supplement your income. You want to maximize the income you’re receiving today, while preserving your investment capital to make a gift when you die. This financial planning strategy requires you to liquidate these investments. The resulting cash is used to purchase a prescribed life annuity contract. Once you’ve purchased the annuity, you have eliminated your access to this cash during your lifetime. By using the funds to buy an annuity and combining it with a life insurance policy, this strategy is designed to give you increased income today, while ensuring funds are available to make a gift when you die. You purchase a prescribed life annuity contract and an exempt life insurance policy, with you as the life insured. The payments from the annuity are used to pay the life insurance premium and the tax on the annuity. The remaining amount is used to supplement your income.

As an alternative, you pay for the insurance with one deposit to the policy. With the remaining funds available, you purchase a prescribed life annuity contract. You are the life insured under both the annuity contract and life insurance policy. The after-tax payment is used to supplement your income. The beneficiary of the life insurance policy is someone you have named, such as your spouse, child, or favourite charity. When you die, your beneficiary receives the insurance proceeds tax-free.

The world of investing can be complex, but it doesn’t have to be difficult.

Different savings options for different needs

Risks to your retirement plan

What are your options to mitigate investment risks?

Powerful savings and investment tools to help you reach your short term and long term goals.

Turn your retirement savings into income that will not fall short of your life expectancy