Investing
Tax Free Savings Accounts
ARE NOW AVAIL....
Why pay tax on 5,000.00 of investment gains per year? Now you don't have too. Each portfolio and risk tolerance is different. Let's sit down and see where this benefit works best for you. I won't be using mine at my bank for minimal interest on savings accounts! Those have the least potential gains and the highest taxation to you! Let’s get creative and save you taxes as you make more money with your investments!
Segregated Funds
WHAT IS A SEGREGATED FUND? ARE NOW AVAIL. PLEASE ASK FOR MORE INFORMATION
Segregated funds are much like mutual funds in that a number of investors deposit money into a fund, the money is pooled and investment decisions are made by professional fund managers. By pooling their money, investors are able to buy a diversified portfolio, reducing the risk to each investor.
So what's the difference between a segregated fund and a mutual fund? Very little in terms of how tile fund cooperates and is managed. However, segregated funds, which are offered only by life insurance companies, generally offer several key advantages.
- Segregated funds are variable deferred annuity contracts.
- No special licenses are required to sell them just a life insurance license.
- Policy owners can designate a beneficiary in favour of a spouse, child, grandchild or parent, so tile proceeds of the policy may be protected from creditors.
- Segregated funds offer a guaranteed death benefit.
- Segregated funds offer a maturity guarantee. After 10 years the company must guarantee to pay the higher of the policy's market value or at least 75% of the premiums (less redemptions) paid into the policy.
Your Goal: Grow your net worth, but limit your risk.
You're saving for retirement. Planning for the future. Working to give you and your family financial peace-of-mind. Naturally, you want to choose an investment with strong growth potential, but the last thing you need is something unexpected shrinking your hard-earned slice of pie. You want protection. And growth (after all, you're not ready to hide your money under the mattress just yet).
One answer may be segregated funds – or SEG funds,
as they're often called.
Choose from a wide selection of seg funds, every bit as diverse in their risk/reward factors as any mutual fund. But – and here's the big difference – your investments 15%-10% guaranteed (yes, you've read it right – guaranteed). All the best of investment managing combined with protection –that's an impressive combination.
There are other important benefits too.
WHO'S BUYING SEG FUNDS?
Millions of people just like you. Maybe you're starting to build a nest egg or planning to retire over the next decade or so.
Perhaps you're nearing retirement and want to secure the gains you've made so far. Whatever your life stage or circumstance, you definitely want market growth with downside protection for the long term.
Of course, you may be a business owner concerned with exposing your savings to business liability and you desire creditor protection. Or you could be a conservative investor who still wants elbowroom for increased earnings.
Any way you look at it, you want growth and protection.
TAXATION
Segregated Funds, like most investments, are subject to taxation. However, unlike traditional investment vehicles like GICs and Canada Savings Bonds (CSBs), which earn only interest income, segregated funds earn dividend income and capital gains or losses in addition to interest income. Dividend income and capital gains are taxed at a lower rate than interest income. This means that segregated funds have a substantial tax advantage over interest-bearing investment vehicles.
RSP TAXATION
Segregated funds registered as an RSP are not subject to tax as tile investment grows. However, when amounts are withdrawn or when an RSP is converted into an income-generating plan such as a RIF, payments is fully taxable as they are received. Financial institutions offering a RIF are required by law to withhold tax on any unscheduled withdrawal.
RIF TAXATION
Tax must be withheld from RIF income that is in excess of the minimum amount in each calendar year. In addition, financial institutions offering a RIF are required by law to withhold tax on an)' unscheduled withdrawal.
Percentage tax withheld on cash withdrawals:
|
Cash Withdrawal
|
All provinces Except Quebec
|
|
Up to $ 5,000
|
10%
|
|
5,001 to 15,000
|
20%
|
|
15,000
|
30%
|
For RIFs coming from a spousal RSP contribution, any income in excess of the minimum will be taxed back to the taxpayer contributor if the RSP spousal contribution was made in the current, ear or two previous years.
This is in keeping with the rules governing withdrawal of spousal contributions from RSPs. RIF scheduled payments made within the calendar year of purchase will have tax withheld on the full withdrawal amount, as there is no minimum in the year of purchase.
On the death of the RIF annuitant during the deferral period, the balance in the contract is taxable on the annuitant's final income tax return, unless the spouse is the beneficiary and elects to have the proceeds transferred directly into an allowable registered vehicle in his or her name.
RRSP’S,RRIF’S/ANNUITIES
Do you think about:
- Early retirement?
- Financial security?
- Your child's education?
- A dream vacation?
Studies suggest that a properly diversified investment portfolio can help you maximize your returns while minimizing your risk.
A wide range of companies offer many different options and quality financial products suitable for your registered retirement savings contributions. Design YOUR OWN PLAN. By naming a preferred beneficiary, you may be able to protect your RRSR or regular savings plan against creditors and at the same time maximize your return.
Let me know you what's available and help you choose the best option for you!
|
|
|
You can look up daily fund prices, track performance, & monitor your portfolio at:
|
|
|
|
|
And many more………………………………
|
|
|
|
Savings accounts are the simplest way to earn interest. The interest is generally low (less than one per cent these days) because the money can be withdrawn at whim. Interest can also be determined by whether the savings account is bundled with a chequing account.
|
|
Guaranteed Investment Certificates (GICs) - are for investing in for a year or more - usually one to five years - and come in various forms with different available options. Check out the options offered and determine which suit your needs and situation most closely. For example, some can offer a low interest rate in the first year and more attractive returns in subsequent years. Always check if there are penalties for early withdrawal and how much those penalties are. It is important to consider the liquidity of any investment. Liquidity means how available your money will be if you want to withdraw it on short notice. Generally, the more liquidity you want, the lower the interest-rate return. Long-term rates tend to be higher, but in high-inflation and pre-recession environments, this may not hold true.
|
|
Canada Savings Bonds - typically offer more liquidity than GICs. They can be cashed in without penalty after 90 days if you do it at month end. Terms vary from issue to issue. They have been made more attractive lately because of stepped-up guarantees on rates beyond the first year. For example, three per cent could rise to 5.00 percent. Minimum purchase is usually $100 and the maximum $500,000.
|
|
Money Market Mutual Funds - invest in federal government treasury bills, provincial treasury bills, and short-term commercial paper issued by the most credit-worthy corporations. The return for these funds are expressed as a yield.
|
|
Bond Mutual Funds - are a pool of government and/or corporate bond investments that are professionally managed. They have two components: the rate of interest the bond is paying and the price you pay for the bond. If a bond is paying five per cent and interest rates move higher, the bond is less attractive and therefore worth less. The price of bond mutual funds, therefore, moves in an inverse direction to interest rates.
|
|
Balanced Mutual Funds - are a combination of cash, fixed income (such as bonds) and equities (such as stocks). These funds are an efficient way to spread your money across different types of investments. When stock markets are down, for example, bond markets may be up, or vice versa. Diversification by asset class is the objective with these types of funds. They will tend to produce a lesser rate of return over the longer term, than equity-based vehicles, but will tend to exhibit lower volatility.
|
|
Equity Mutual Funds - are mutual funds that invest in a mixture of stocks. Equity funds are categorized by the types of stocks in which they invest. For example, by geography or industry type. Usually, these types of funds will be more volatile and generate the highest rate of return over longer investment time.
|
|
Labour Sponsored Mutual Funds - are equity type investment funds sponsored by labour to provide venture capital for small and medium-sized businesses. Most of these funds are provincially based, although some national labour funds exist as well. Thanks to the generous tax credits they offer investors, these funds have proven quite popular. To benefit from these tax credits, investors must typically allow their investment to remain in the fund for a minimum of eight years. It should be noted that the large tax credits are offered as a "risk premium" of sorts. These funds will tend to be towards extreme end of potential volatility.
|