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Retirement Investment Solutions in Canada
April 10, 2024
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Ai Financial Retirement Solutions
Grow your money faster with tax-smart plans and save time with all-in-one retirement solutions.
Get More from Your Investments
Whether you’re building up or winding down your investments, there are several ways to grow your retirement savings, reduce taxes and make the most of your money.
Enjoy tax benefits and maximize your investment
Save for Retirement with an RRSP
With a Registered Retirement Savings Plan (RRSP), you can save for retirement and reduce the taxes you pay while you’re still working. You can contribute to an RRSP through December 31 of the year you turn 71.
Benefits of an RRSP
Your annual RRSP contribution can be deducted from your total income, reducing the amount of income tax you pay in a year.
The income you earn in an RRSP is not taxed so it can grow faster. By the time you retire and withdraw the money, you will probably be in a lower tax bracket.
An RRSP lets you withdraw money to buy your first home or pay for your or your spouse’s education without penalty—as long as you repay this money within a certain amount of time.
Save for Anything with a TFSA
With a Tax-Free Savings Account (TFSA), you can save for anything—including retirement (although contribution limits do apply). It’s also a great option if you’re already retired because you don’t have to earn an income to contribute to it.
Benefits of a TFSA
The income you earn from investments you hold in a TFSA—interest, dividends or capital gains—are never taxed.
Easily withdraw money from the TFSA (depending on your investments) without the investment gains being added to your income for the year.
Unlike the RRSP, you don’t have to earn an income to contribute to a TFSA. If you’re retired, you could park RRIF withdrawals in a TFSA until you need them.
In addition to the annual contribution limit, your unused contribution room is carried forward indefinitely. Plus, withdrawals are added back to your contribution room the following year.
Keep your TFSA as long as you live. Unlike the RRSP, you won’t have to close it at age 71.
The income you earn in a TFSA and your withdrawals don’t affect your eligibility for Federal income-tested government benefits or tax credits.
Accelerate wealth growth and retire early with investment loan
By leveraging borrowed money like investment loan, you can significantly increase your investment capacity, thereby maximizing your potential returns while maintaining liquidity for other projects.
Investment loans are particularly suitable for investors who prefer not to use their own money and may lack substantial liquid funds for investment, provided they have some level of risk tolerance.
Benefits of investment loan
- Investment gains have the potential to reach financial goals faster.
- Allows you to take advantage of market upturns.
- Maximizes your investments while maintaining access to your liquidity.
- A lump sum investment starts compounding right away, rather than waiting to build your savings with a traditional strategy.
- There are potential opportunities to reduce overall cost of an investment lending strategy through tax deductions.
- Provides access to segregated fund benefits.
It’s especially beneficial for long-term investors (minimum 10 years), offering the advantage of reducing taxable income through tax-deductible loan interest.
Your Investment Choices
Invest for long-term, stable profits in segregated funds.
Segregated (or seg) funds are an investment product sold by life insurance companies. They are individual insurance contracts that invest in one or more underlying assets, such as a mutual fund.
Unlike mutual funds, segregated funds provide a guarantee to protect part of the money you invest (75% to 100%). Even if the underlying fund loses money, you are guaranteed to get back some or all of your principal investment.
Benefits of Segregated Funds
Choose one of the guarantees for maturity and death benefits, 75% or 100% of the amount invested, to help ensure your savings remain protected. This means that when your investment reaches its maturity date or when you pass away, if your investment is worth less than its guaranteed value, the insurance protection will top you up. Naturally, it will be proportionally reduced by any withdrawals.
If you think you might want to pass along your assets to your loved ones, segregated funds offer a great solution. Segregated funds help you preserve your money by:
1. Guaranteeing that your beneficiaries receive a certain percentage of your investments
2. Allowing your proceeds to pass directly to your beneficiaries without going through probate (the process by which a court formally approves a Will). This means:
- Your loved ones receive the money faster
- Your estate remains private
- More money is passed along
This means that creditors may not be able to take the funds you have in your segregated fund contract.
What Ai Financial do for you
As professional investment advisors, Ai Financial will plan your investment strategy, showing you how to use various investment accounts most efficiently and leverage investment loans to achieve your financial goals sooner.
What sets Ai Financial apart from other intermediary agencies is our deep understanding of investments. Our investment expertise can bring clients an average annual return of over 20%, allowing long-term investors to easily double their assets in five years.
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