Financial Wellness Planning offers our clients independent advice when creating goal specific portfolios while providing them with a means of accessing expert knowledge and the potential for greater more consistent returns on their investments.

The historic and current global environments support the need to invest with sound advice. The Canadian marketplace offers numerous investment opportunities. The range includes savings accounts, GICs, fixed income products, mutual funds, and tax advantaged funds. Each class has its own benefits and risks and these need to be assessed in order to make the right investment decisions. There are also many account types to choose from. The type of account is important as there may be different tax implications and each structure must be considered in light of the specific investment objective.

Plan Types:

RRSP: Registered Retirement Savings Plan which allows for tax deferred investing to accumulate retirement capital.

TFSA: Tax Free Savings Account allows Canadian tax payers to shelter investments free of tax and without penalty of withdrawal. Individuals aged 18 and older can contribute up to $6,000 every year to a TFSA. Unused TFSA contribution room can be carried forward to future years. It is important to note that if you do withdraw funds you can still re-contribute in the following or subsequent calendar years.

RESP: A Registered Education Savings Plan is a government registered plan that assists parents, grandparents and guardians save for children’s post-secondary schooling with the added advantage of the Government savings grant known as the Canada Education Savings Grant (CESG), and potentially additional CESG, or Canada Learning Bond (CLB).

RRIF: The easiest way to define a Registered Retirement Income Fund is to think of it simply as an RRSP that you cannot contribute to and requires minimum withdraw amounts each year. You can withdraw any amount as long as the minimum withdrawal is made annually. The withdrawals are taxed as regular income. A RRIF is often described as a reverse RRSP. Anyone with RRSPs will be required to convert their funds into either a Registered Retirement Income Fund (RRIF) or an Annuity by December 31 of the year they turn 71.

LIRA: Locked-In Retirement Accounts are designed to hold Defined Benefit Contribution or Defined Benefit  Pension assets in a tax sheltered environment till the time that you require them to produce income, at that point your LIRA is then converted to a LIF or LRIF.

LIF: Life Income Fund is account is similar to a RRIF except is designed to hold pension assets and has age and withdrawal restrictions. When you retire, or at the very latest when you reach the age of 71, you may transfer assets from your LRSP, LIRA, or registered employer-sponsored pension plan to a LIF or LRIF, depending on the applicable provincial pension legislation.

Non-Registered: These plans are very similar to personal savings accounts but are invested in the market and have the opportunity for greater returns.

RDSP: A Registered Disability Savings Plan is a savings plan that is intended to help parents and others save for the long term financial security of a person who is eligible for the disability tax credit (DTC).

Contributions to an RDSP are not tax deductible and can be made until the end of the year in which the beneficiary turns 59. Contributions that are withdrawn are not included in income for the beneficiary when they are paid out of an RDSP. However, the Canada disability savings grant (grant), the Canada disability savings bond (bond), investment income earned in the plan, and rollover amounts are included in the beneficiary’s income for tax purposes when they are paid out of the RDSP.

Investment Products:

Mutual Funds: Are professionally managed pooled investments which gather investments from many investors and, depending on the mandate, invest in cash (T bills, bank instruments), fixed income (government bonds, corporate bonds high yield bonds), stocks (common or preferred shares) as well as sectors such as resources, emerging markets or precious metals.

Corporate Class Funds: This structure allows some sheltering of capital gains and interest income for Non-registered monies. When withdrawing money from this structure any growth, including interest income is treated as a capital gain.  

Segregated Funds: The insurance industry offers investment funds with principal and maturity guarantees. Segregated funds can remove some the risk out of investing in equities. They combine the growth potential of a mutual fund with the security of a life insurance policy. Unlike a mutual fund, a segregated fund has a maturity date, such as 10 years. If you hold the fund to that date, you will be guaranteed to get a percentage of your principal. The amount of the guarantee ranges from 50% to 100%.

Annuities: An annuity is an investment that pays you a set monthly income for a set period of time. Annuities are provided by insurance companies. With an annuity, you pay a lump sum up front, and get income back each month either for life or for a specified term.

GICs: A deposit investment security sold by Canadian banks and trust companies. They are often bought for retirement plans because they provide a low-risk fixed rate of return.