APR 2021
Registered Accounts
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Registered Retirement Savings Plan (RRSP)
Using Registered funds to reduce the amount of taxation on your hard-earned money is an incredibly important part in moving towards your financial future. Imagine a scenario where you are able to save $5,000 per year over a period of 30 years. Assuming that you are able to collect an interest rate of 6%, using registered accounts can save you up to $150,000 over time!
An RRSP account is the first of the 3, that we will be discussing today. An RRSP account allows you to deposit money into it tax-free right now, and allows you to withdraw them when you retire. Your tax bracket in retirement is sure to be much lower than it is in your working years, allowing you to save immensely on taxes.
Tax Free Savings Account (TFSA)
An RESP allows for you to save tax-free for your childs post-secondary education. Additionally, you can receive $500 per year from the Canadian government, up to a maximum of $7200 simply for having an active account. The simplest way to accomplish this would be to set up a pre-authorized contribution of $208 per month A tax-free savings account allows you to save and invest completely tax-free. These accounts allow you to contribute up to $6,000 per year, and also allow you to carry forward unused contributions to the next year. These contributions can go into a wide array of savings and investments such as a savings account, GIC, Mutual Funds, or stock portfolio. As only your primary residence, and your TFSA account are your only true tax free investments, it is important to take full advantage of the opportunity that a TFSA provides.
How to Take Advantage of These Accounts
With all of these important accounts, it is important to recognize the combinations and situations in which they are the most useful. Ensure that you are able to save the most money possible with the expert financial advice and guidance provided by Dave Financial. We work hard towards the happiness of our clients and strive for the best financial future available to them.
If you would like to learn more about these accounts or would like to open one you can reach us by calling the number provided below, or contact us through our email. We look forward to hearing from you, and hope to be able to work towards your financial future together.