Retirement

Saving for retirement can seem like a daunting task, and without a plan having enough for retirement may seem out of reach.  And once you retire you want to feel confident that you aren’t outspending your savings.  Let us help develop a plan that gets you to retirement and allows you to be comfortable when you get there.

Here’s how we can help you achieve your retirement lifestyle:

  • Develop a personalized savings plan that can meet your future retirement lifestyle.
  • Educate you on your plan, strategy and investments
  • Design a portfolio to grow your savings without taking on undue risk

Already Retired?  We can …

  • Design a conservative portfolio with growth to mitigate the depletion of your capital
  • Develop a tax efficient income stream based on your needs for retirement

Retirement savings can take many different shapes depending on many factors such as the size and structure your current investment portfolio, employers savings plans including pensions, and your level and source of income.  The following is an overview of different methods to save for your retirement.

Registered Retirement Savings Plan (RRSP)

Funds invested into an RRSP reduce your taxable income and growth within the plan is tax-deferred until withdrawals are made.  The theory behind the benefits of saving in an RRSP is that most individuals are in a higher tax bracket while contributing to an RRSP than when withdrawing, deferring tax to a time when you will pay less.  In general you receive RRSP contribution room of 18% of your previous years income to a maximum annual limit of $24,930 (2015).  Your contribution room is reduced by any pension contributions you have made and you can carry forward your contribution room indefinitely.  The RRSP contribution deadline is 60 days after the calendar year end.

Registered Retirement Income Fund (RRIF)

In the year you turn 71 you must dissolve your RRSP, however an RRSP can be converted to a RRIF account.  A RRIF has mandatory withdrawal rates based on your age and any withdrawals are treated as pension income and are taxable.  Funds remaining in the account retain their tax sheltered treatment.  RRSPs can be converted to a RRIF before age 71 as well which may make sense for those wishing to take some income earlier.

Spousal RRSP, Spousal RRIF

Spousal versions of RRSPs and RRIFs can allow the higher earner to contribute in the name of their spouse.  Since the lower earning spouse will often continue to be in a lower tax bracket in retirement, it makes sense to have them receive additional income in retirement to save on income tax.  The contributing spouse must have sufficient contribution room, and withdrawals of funds contributed cannot be made for 2 years following the investment.

Locked-In Retirement Account (LIRA)

When you leave an employer who has a pension plan you may be given the option to transfer your pension funds into a LIRA.  LIRAs allow you and your professional advisor to control and make choices on the investments within the account.  There are some exceptions but in general funds in this account are locked-in which means they cannot be withdrawn.  Even though you have left a pension plan the funds within your LIRA are meant to be used down the road for your retirement.

Life Income Fund (LIF)

Similar to the RRSP and RRIF relationship, a LIRA must be dissolved at age 71 and can be converted to a LIF.  LIFs not only have a minimum withdrawal rate but also have a maximum rate which regulates income levels in this pension-like fund.  LIRAs can be converted to a LIF prior to age 71 should you require the income.

Other retirement options we can help you with:

  • Group RRSPs setup or transfer
  • Evaluation of transferring pension funds (commuting your pension) versus leaving your pension in tact
  • Explanation and advice on defined benefit pension plans and defined contribution pension plans
  • Transfer of a UK registered pension scheme to a Qualifying Recognised Overseas Pension Scheme (QROPS) in Canada