Wealth management strategies for individuals

When discussing personal wealth management, our approach is to ensure your wealth management strategy fits into your overall balanced financial portfolio. It is important that we have a clear understanding of your tolerance for risk, your time horizon for saving and investing, and the various plans you have for the funds you set aside.

For most people, it is important to save and invest for the short term, the mid term and the long term, and to ensure you set aside funds not only for retirement, but for the emergencies and opportunities that will arise on your path to retirement.

The following strategies and products make up the wealth management component of your balanced financial portfolio.

RRSP’s

A Registered Retirement Savings Plan (RRSP) is a personal savings plan registered with the federal government that allows you to save for the future on a tax-sheltered basis. RRSP contributions can be used to reduce your taxable income, however you are limited to contributing 18% of your prior year’s income, to a yearly maximum. The growth on the investments is tax free until withdrawal.

RRIF’s

A Registered Retirement Income Fund (RRIF) is an option for maturing RRSP’s (by age 71) that provides a stream of income intended for retirement. The funds within a RRIF remain tax sheltered, however you must withdraw a minimum amount each year as determined by the government based on your age and the amount of money in your plan.

RESP’s

A Registered Education Savings Plan (RESP) is a tax-deferred savings plan that allows you to save for your children’s post-secondary education. You can contribute up to a maximum per child each year, and the government will deposit a Canada Education Savings Grant amount equal to 20% (up to a maximum) on your behalf.

Non-registered Investment accounts

A non-registered investment account is one that is not registered with the government, meaning the assets are not tax-deferred. The advantages are greater flexibility in regard to deposits, withdrawals and investment options.

Segregated Funds

Segregated Funds are similar to mutual funds, but are issued through insurance companies. Segregated funds offer certain advantages such as creditor protection, maturity and death benefit guarantees, and the ability to bypass probate.

Tax Free Savings Accounts

Introduced in 2009, a Tax-Free Savings Account (TFSA) allows for yearly contributions up to $5,000, per individual (the annual contribution limit is to be indexed to inflation). In contrast to a RRSP, deposits are not tax deductible.

The growth on the deposit remains tax free, both while in the TFSA, and upon withdrawal (there are no restrictions on withdrawals). Like an RRSP, your contribution room accumulates each year. It is important to note that your withdrawals, inclusive of any growth, are added to your contribution room for the following year.

Anyone over the age of 18 can set up a TFSA. Tax Free Savings accounts are an excellent tax saving strategy, and should form a part of your balanced financial portfolio.

Deposit Accounts (Term Deposits and GIC’s)

Deposit accounts such as term deposits and Guaranteed Investment Certificates (GIC’s) pay a fixed rate of interest, and generally, are locked-in for a pre-determined amount of time. GIC’s and term deposits can be either registered or non-registered.

Virtual Bank* Accounts

Virtual bank* accounts are high interest chequing/savings accounts allow for withdrawals and deposits without any conditions, while providing a high interest rate.

Virtual bank* accounts are online, high-interest chequing/savings accounts that are perfect for business owners who wish to get a little bit of extra return on their money, but who do not wish to lock-in their funds for any period of time. Virtual bank* accounts allow for withdrawals and deposits without any conditions, while providing a high interest rate. These accounts can be accessed online, anytime, and can even be used for employee payroll.

Annuities

An annuity is a contract that guarantees a series of payments over a period of time or for life, in exchange for a lump sum deposit. Typically used for retirement income, the payments received represent a partial return of capital, combined with investment income.

Please call us at (905) 689-2425 for more information on how we can help you determine the wealth management strategy that will work for you.

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