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Take Ownership of Today with RRSPs and TFSAs.
It’s great to live in the moment, but what about making the most of every moment? With Registered Retirement Savings Plans (RRSPs) and Tax-Free Savings Accounts (TFSAs) – it’s simple. The Federal Government recognizes that it’s important for Canadians to save money and save on their taxes. That’s why they sponsor both RRSPs and TFSAs.
RRSPs
An RRSP is an investment in your future, with benefits you can enjoy today. By contributing to an RRSP, you can take advantage of substantial tax savings now, and enjoy peace of mind in knowing you'll have secure retirement funds in your future. Plus, investing in an RRSP is a great way to reduce your taxable income. Our financial professionals can work with you to create the right retirement plan for you. We recognize that sometimes it's tough to come up with the cash before the deadline for contributions. Credit Unions can help you set up an automatic monthly savings plan. Or with an RRSP loan we'll show you how the cost of borrowing can actually be offset by your tax savings at year end.
From self-managed RRSPs to those that are fully managed by our Credit Union professionals, you’ll find an RRSP solution that fits your needs.
Click here for RRSP Quick Facts...
TFSAs*
A TFSA allows you to save without paying tax on the interest you earn. Soon, you’ll be able to contribuite up to $5,000 every year without being taxed on interest earned. It may just be the tool you need to complement your retirement plans, or to save for more short term goals like purchasing a new car, renovating a house, starting a small business or taking a family vacation. TFSAs will be available as of January 2009.
Click here for TFSA Quick Facts...
*Available at participating Credit Unions.
Want to keep more of the dollars you earn?
We can give you the tools you need to achieve your financial goals. To learn more about how to use TFSAs and RRSPs to your advantage, click here to find a Credit Union near you…
RRSP Quick Facts…
Who can contribute to an RRSP?
If you have earned income, you can contribute to an RRSP up until December 31 in the year you turn 71.
How much can you contribute?
You can check your limit on the Notice of Assessment that Canada Revenue Agency sent you after processing your tax return last year. Your RRSP contribution limit is noted there, including any unused room.
The Tax Information Phone Systems (TIPS) will also give your current contribution limit. (Call Toll Free: 1-800-267-6999). You must have your SIN and your previous year’s tax return handy.
Contributing In-kind
If you don’t have the cash available to make your contribution, you can contribute securities you hold outside of your RRSP.
Your “in-kind” contribution will be equal to the fair market value of the security when it is contributed.
Spousal RRSPs
All or a portion of your contribution can be made to a spousal plan if your spouse has a lower income, but as the contributor, you get the deduction.
Contributing to a spousal RRSP can be an effective way of income splitting, since the income that will be eventually withdrawn from the RRSP will be taxed in the hands of the spouse who will be in a lower tax bracket.
Contribution Carry Forwards
You can carry forward unused contribution room from 1991 onwards. This means that if you did not make your maximum contribution in any year since then, the leftover amount can be added to your current contribution limit.
So what do you do when you have maximized your RRSP contribution? Read on to find out more about TFSAs...
TFSA Quick Facts...
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If you’re a Canadian resident over the age of 18, and have filed a tax return, TFSAs will be available to you in January 2009. |
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TFSAs will allow you to save without being taxed on interest earned or investment earned, whether it’s a long term or short term investment. |
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You can contribute a maximum of $5,000 a year. While this amount won’t be deducted from your income on your tax return, you’ll still be able to keep more of what you earn. |
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With a TFSA you can still choose from a variety of products, from high-interest savings accounts, to GICs and Mutual funds. |
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The Canada Revenue Agency (CRA) will determine TFSA contribution room (based on information provided by users) for each eligible individual who files an annual T1 individual tax return. (If you have not filed taxes, you would be permitted to establish entitlements to contribution room by filing a return for those years or by other means acceptable to the CRA). |
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There is no limit to the number of years unused contribution room can be carried forward. |
Who will get the most benefit from TFSAs?
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Young people with a long time frame to compound investment returns.
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Low-income people who save little taxes from RRSP contributions. |
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People who have run out of RRSP contribution room. |
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People who will have a period of reduced income. |
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Seniors facing reductions in social benefits such as Old Age Security or Guaranteed Income Supplement, or the age amount tax credit. |
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Seniors who must collapse their RRSPs, now as of age 71. |
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