At Safeguard Insurance & Financial Services, we understand that the current economic climate is challenging for all businesses. We know that investment returns are important, but so is your financial security. After all, nobody wants to lose money. A solid foundation built on expert advice and support is the surest way to sustain and achieve growth for the future. Our service goes far beyond placing investments we will help assure your stability, profitability and growth. We will give you our undivided attention as we help you to identify, analyse and implement the path to your financial independence.
With Segregated Funds, you can reduce the effects of losses associated with market fluctuations because your principal when invested in a Segregated Fund has guarantees. The best part is they offer protection from creditors, perfect if you are approaching retirement or a small business owner.
Segregated funds are an excellent alternative to conventional mutual funds. Like their mutual fund counterparts, segregated portfolios offer a range of investment objectives and categories of securities including equities, bonds and balanced funds. However, segregated funds also come with some unique benefits.
The most attractive feature of segregated funds is their guarantee of principal up to 100%* at maturity and death. This makes segregated funds a more secure investment option than mutual funds or stocks.
A Registered Retirement Savings Plan (RRSP) or Spousal RRSP is a registered investment/savings account designated for retirement savings. RRSPs are available to investors over the age of 18 (with income) and under the age of 71, When the owner of an RRSP reaches the age of 71, at which time the RRSP must be closed and usually the funds are transferred to a RRIF (Registered Retirement Income Fund) or Spousal RRIF.
There are many advantages to RRSPs but most financial services institutions don't tell you the negative. They are not for everyone and if not properly planned can hinder you financially in the short term and even in the long term. Even the type of investment you choose for your RRSP can be detrimental. With our Total Solutions approach let us custom tailor your plan to retirement.
Investments held inside a RRIF grow in a tax-deferred manner just as with a RRSP. There are two primary differences between a RRSP and a RRIF. The first is that no further contributions can be made once conversion to a RRIF has occurred. The other is a special functionality called a minimum RRIF withdrawal. A minimum RRIF withdrawal is an annual obligatory amount which is cashed out of a RRIF and sent to the account-holder without, withholding tax. The withdrawal remains taxable Canadian income, but is eligible for a $2,000 tax credit.
The minimum RRIF withdrawal each year is determined by a percentage depending on the holder's age and the total value of the plan on January 1 each year. The holder of a RRIF may elect to withdraw an amount greater than the minimum RRIF amount for that year, though withholding tax will apply to this supplementary amount. Funds must be transferred in from either an RRSP, Spousal RRSP or from a Group RRSP
Many investors find the transition from an RRSP to a RRIF confusing. We will be pleased to advise you on how RRIFs work, what regulations they are subject to, and what investment options you have within your RRIF account. We are here to custom tailor a Total Solutions plan based on your goals and financial situation.
Locked In Retirement Account (LIRA) and Locked-in Retirement Savings Plan (LRSP)
The distinction between a LIRA/LRSP and an RRSP is that, where RRSPs can be cashed in at any time, a LIRA/LRSP cannot. Instead, the investment held in the locked-in account is "locked-in" and cannot be removed until either retirement or a specified age outlined in the applicable pension legislation (though certain exceptions exist). Another important distinction between regular RRSPs and LIRAs/LRSPs is that once funds have been transferred from a company pension plan to a LIRA/LRSP, further contributions cannot be made into said LIRA/LRSP. Any monetary amounts earned in the LIRA/LRSP through investment are also considered to be locked-in.
At retirement, holders must convert their LIRAs/LRSPs into Life Income Funds (LIF) or Locked-In Retirement Income Funds (LRIF) which will provide pension income during retirement. Instead of converting to a LIF or LRIF, holders may opt to use the proceeds of their LIRA/LRSP to purchase a Life Annuitty through Safeguard Insurance & Financial Services LTD.
Life Income Fund (LIF) or Locked-in Retirement Income Fund (LRIF) Account
When you reach the age of 71 (latest), you must transfer assets from your LRSP, LIRA, GRSP or employer-sponsored pension plan to a LIF or LRIF, depending on your provincial pension legislation.
The difference between the RRIF and the LIF/LRIF is that the RRIF is used for transferring individual RRSP assets and the LRIF/LIF is used for transferring GRSP or other employer sponsored pension assets. These assets may have been held in an LRSP or LIRA before being transferred.
Both the LIF and the LRIF require a prescribed mandatory minimum income withdrawal and an optional maximum income withdrawal each year. Conversion to an annuity is not mandatory for an LRIF.
You retain control over how your LRIF/LIF is invested, subject to specific restrictions under the Income Tax Act
What is an RESP?
A Registered Education Savings Plan (RESP) is a smart way to maximize education savings. Tax-sheltered investment growth and eligibility for government grants can make a big contribution to your child's future.
A Tax Break on Savings
The money you contribute to an RESP is sheltered from tax. No income tax is paid on investment returns as long as money remains in the plan. That means investments compound and grow faster than when invested in a non-registered investment.
When money is withdrawn to pay for a child's education, the investment growth and government grant portions of withdrawals are taxable in the child's hands (but not the original contribution). Because the child will likely have a low tax rate while attending school, taxes should be minimal.
Take Advantage of Government Grants
The Canada Education Savings Grant (CESG) provides free government funds to help pay for your child's education. Through the CESG the federal government matches 20% of annual RESP contributions, to a maximum of $500 a year and $7,200 over a child's lifetime. Lower-income families may be eligible for additional CESG payments.
Contribute up to $50,000
Up to $50,000 can be contributed for each RESP beneficiary. Contributions can be through regular periodic payments or lump sum payments. There are no annual contribution restrictions.