Tax-Free Savings Account (TFSA)
A Tax-Free Savings Account (TFSA) allows you to save and invest tax-free. All interest, dividends, and capital gains earned inside a TFSA are completely tax-free, and withdrawals can be made anytime without penalty. This is an excellent tool for both short-term savings and long-term wealth building.
Key Benefits:
- Tax-Free Growth: Earnings inside a TFSA are not taxed.
- Flexibility: Withdraw funds anytime without tax penalties.
- Contribution Limits: Contribution room accumulates each year.
Eligibility:
Any Canadian resident over the age of 18 with a valid Social Insurance Number (SIN) can open a TFSA.
Contribution Limits:
The annual contribution limit is set by the government and may vary each year. Be sure to check the current limits.
Registered Retirement Savings Plan (RRSP)
The RRSP is a government-backed savings program that allows you to save for retirement while deferring taxes on your contributions and earnings until you withdraw them, typically in retirement when your tax rate may be lower.
Key Benefits:
- Tax Deferral: Contributions reduce your taxable income for the year.
- Tax-Deferred Growth: Investment income is not taxed until withdrawal.
- Contribution Room: You can contribute up to 18% of your earned income from the previous year.
Eligibility:
Canadian residents under the age of 71 with earned income are eligible to contribute.
Withdrawals:
Funds are taxed at your marginal tax rate when you withdraw them from your RRSP.
Registered Education Savings Plan (RESP)
An RESP is a government-sponsored savings plan designed to help save for a child’s post-secondary education. Contributions can grow tax-free, and the government matches a portion of your contributions with the Canada Education Savings Grant (CESG).
Key Benefits:
- Government Grants: The CESG matches 20% of your contributions.
- Tax-Deferred Growth: Earnings are tax-deferred until withdrawal for educational purposes.
- Flexibility: Funds can be used for a variety of educational expenses.
Eligibility:
Any child under the age of 18 is eligible to be named as a beneficiary in an RESP.
Contribution Limits:
The lifetime contribution limit is $50,000 per child.
Pooled Pension Plans (PPP)
Pooled Pension Plans (PPPs) are designed to help small and medium-sized businesses offer a pension plan to their employees. The funds are pooled together, reducing costs and offering better investment options.
Key Benefits:
- Lower Costs: Pooling funds leads to lower management fees.
- Broad Investment Choices: Employees can choose from a range of investment options.
- Employer Contributions: Many PPPs include employer contributions to increase savings.
Eligibility:
Typically available to employees of businesses that offer the plan.
Withdrawals:
Funds can be withdrawn upon reaching retirement age, similar to other pension plans.
Plan Administration and Management
Effective administration of your savings and pension plans is key to achieving your financial goals. We offer services that help you manage your accounts, stay compliant with tax regulations, and maximize your retirement savings.
Our Services Include:
- Annual contribution tracking to avoid over-contribution.
- Investment strategies tailored to your goals and risk tolerance.
- Plan consolidation for better management of multiple accounts.
- Tax reporting to ensure you claim all applicable deductions.
Contact Us for personalized assistance in managing your savings and pension plans.