FAQs
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RRSP
Although you can take money from your RRSP before you retire, it’s not recommended because of the negative impact on your retirement plan due to taxes on withdrawals. Withdrawals must be declared as income on your tax return at the end of the year and withholding tax will also be deducted from the amount you withdraw.
If you decide you would like to withdraw from your RRSP, we encourage you to first use our online booking tool to schedule a time to speak with an advisor by phone.
The RRSP contribution deadline each year is the last day of February, which falls on the final Sunday of the month (or extended to early March).
This amount varies per person. To find out the exact amount you can contribute for the current year, check your most recent Notice of Assessment from the CRA, which you can access through the “My Account” function on the CRA website.
As a guideline, your allowable RRSP contribution for the current year is the lower of:
- 18% of your earned income from the previous year
- The maximum annual contribution limit for the tax year
- The remaining limit after any company-sponsored pension plan contributions
Opening an RRSP is super easy. The only conditions for eligibility are that you’re under 71 years of age, a Canadian resident (for tax purposes), and that you file income taxes in Canada. You can even sign up if you’re a minor (and good for you for getting such a jump start on your retirement!). You’ll just need written consent from a parent or guardian.
Individual RRSP: The most common type of RRSP is a plan registered in your name. The investments held in the plan and all the tax benefits belong to you.
Spousal RRSP: When you contribute to a spousal RRSP, you still get the tax deduction but the plan is registered in your spouse’s name. (Your spouse’s contribution limit to his or her own plan is not affected.) It’s a great income-splitting option if one of you earns more than the other.
Locked-in RRSP: If you leave your employer before you retire, you may be offered the option to manage your vested pension funds. A Locked-in RRSP—Locked-in Retirement Account (LIRA) in some provinces—enables you do this.
Group RRSP: Some employers offer a Group RRSP, a collection of individual RRSPs for the company’s employees. As an employee, your RRSP contributions are taken from your pre-tax pay through payroll deductions, reducing your tax burden immediately.
That depends on how much you contribute and what tax bracket you’re a part of. If you contribute the maximum — or even more, in the case of those who have contribution space carried forward from prior years — you could avoid paying tax on a substantial portion of your income.
The value of your RRSP depends on how much you’ve contributed each year, what assets your RRSP is invested in, and how many years you’ve had the account for.
Assuming you are 35 years old and save $5,000 annually in your RRSP, by the time you turn 71, with Ai Financial’s average annual investment return, you could potentially have a total asset of $14,736,705.7 CAD. This would provide excellent financial support for your retirement.
- When an RRSP account holder passes away, the entire funds in their RRSP must be included in their income for the year of death.
- If a beneficiary is designated, the fair market value of all the assets in the RRSP will be passed on to the beneficiary.
- In certain qualifying circumstances, eligible beneficiaries (such as a spouse) may be able to transfer these funds into their own registered plan on a tax-deferred basis, subject to specific conditions.
You can always log into your account on the CRA’s online portal. Along with your income tax and benefit information, it also shows your RRSP balance, and it will alert you if you’ve gone over the contribution limit.
An RRSP can’t be transferred while the account holder is still alive, but you can open a joint RRSP with a spouse.
If your employer offers a group RRSP, the manager is provided for you. Otherwise, many financial institutions (including this one) offer RRSP accounts.
We offer RRSP account management and investment services. As mentioned earlier, RRSPs are ideal for long-term investments. With our stable investment returns, you could achieve returns beyond your expectations.
We open accounts for clients at major financial institutions or assist with account transfers. We select Segregated Funds for clients and use RRSPs for investments.
Through long-term investing and the power of compounding, we help clients achieve substantial investment returns by retirement. Additionally, we can apply for RRSP loans on behalf of clients to take advantage of tax benefits and investment opportunities.
TFSA
The TFSA contribution room is what Canadians have accumulated for every year since 2009 that they have been at least 18 years of age, had a Social Insurance Number, and been a Canadian resident. While the TFSA contribution limit for 2024 is $7,000, the maximum contribution amount is $95,000.
To open a TFSA account, simply talk to an advisor or a financial security advisor.
- If you already have an advisor, contact him or her to talk about your project.
- If you do not have an advisor, you can talk to our advisor through any way you like now! Contact us
Your advisor can open your TFSA account after analyzing your financial needs. He or she will also advise you on the investment products to consider.
You sure can. You can open more than one TFSAT, but the total contributions to all your TFSAT accounts cannot be more than your total accumulated contribution room.
Ready to open a TFSA? We’re ready to help. Make an appointment today.
Generally, you can withdraw any amount from your TFSAT at any time, but this will depend on the type of investments held in your TFSA.
For example, if you have purchased a segregated fund, then you will need to check whether withdrawing money will result in a penalty, depending on the fund’s contract.
The CRA will impose a tax of one per cent per month, for each month or part of a month that the excess contribution remains in the account. The one per cent tax will continue to apply until:
- the entire excess amount is withdrawn; or
- for eligible individuals, when the entire excess amount is absorbed by the addition of your unused TFSA contribution room for a later year.
Visit the CRA web site for more information on over-contributions
Short answer: Yes, but maybe not right away.
Long answer: Any withdrawals (other than qualifying transfers) from your TFSAT F S A in a year will be added to your contribution room the following year. If you have contributed the maximum amount allowed to a TFSAT F S A and you withdraw any of your money, you must wait until the following year to contribute again—otherwise you will incur a tax penalty from the Canada Revenue Agency.
Example: In January 2022, Sophia opened her first TFSAT F S A and contributed the maximum of $81,500. In June 2022, she withdraws $7,000. The earliest Sophia can re-contribute the $7,000 without incurring a penalty is January 1, 2023.
Visit the CRA web site for more information on withdrawals and qualifying transfers.
It really depends on your investment goals (are you saving for short-term, long-term, or both?) and your tolerance for risk. A TFSAT F S A should be part of an overall financial planning strategy that takes assets, liabilities, goals, income needs, risk and tax into consideration.
Sit down with us, and we can chat about the best investment mix for you. Book an appointment to learn more.
- have achieved the age of majority in your province or territory of residence (which is 19 in British Columbia, Newfoundland and Labrador, Nova Scotia, New Brunswick, Northwest Territories, Nunavut and Yukon, and 18 in all other Canadian provinces);
- be a Canadian resident;
- have Canadian Social Insurance Number (SIN)
Unlike an RRSP, there is no maximum age for contributing to a TFSA.
No. The contributions to a TFSA can save you taxes on the gains realized in the account, but unlike contributions to an RRSP, they are not tax deductible.
Yes. Any person aged at least 18 years (or 19 years in certain regions) residing in Canada and having a valid social insurance number (SIN) can contribute to a TFSA. Contribution room is generated as soon as the year of arrival.
No. You cannot contribute to your TFSA or accumulate contribution room during the years where you are not a resident. However, you can keep the money already accumulated in your TFSA if you have one. In this case, your investment income and withdrawals will continue to be tax free.
RESP
Once a RESP beneficiary is enrolled in a qualifying post-secondary education or training program, the accumulated income, grants and bonds within the RESP can be paid out to the student as an Educational Assistance Payment (EAP) at the discretion of the subscriber (person who opened the RESP).
You can contribute any amount to a RESP, subject to a lifetime limit of $50,000 per beneficiary. You can contribute to a RESP for up to 31 years, and the plan can remain open for a maximum of 35 years.
RESP withdrawals can be categorized into two situations:
- If the beneficiary is attending a post-secondary education program, withdrawals can be used for tuition, transportation, accommodation, and related expenses. There might be an initial limit of $2,500 or $5,000 for the first withdrawal, but usually, subsequent withdrawals have no set limit.
- If the beneficiary does not pursue post-secondary education, you can handle the funds in the account according to the options mentioned earlier. The grant money needs to be returned to the government.
Generally, you can withdraw any amount from your TFSAT at any time, but this will depend on the type of investments held in your TFSA.
For example, if you have purchased a segregated fund, then you will need to check whether withdrawing money will result in a penalty, depending on the fund’s contract.
Yes! Ai Financial can help you to set a RESP Gift Cheque to invest in a child’s future. Talk with advisor for more operation details.
The minimum monthly contribution is $208.33, or $2,500 annually. Any excess contributions won’t receive government grants. Making contributions for 14 to 15 consecutive years allows for full CESG grant eligibility.
Yes, there are limitations. When opening the account, the beneficiary’s age cannot exceed 17 years old. In a family plan, contributions can be made until the beneficiary turns 31. In an individual plan, contributions can continue for 31 years after the plan’s inception, regardless of the beneficiary’s age.
A RESP beneficiary must claim all Educational Assistance Payments (EAPs)—as income on his or her tax return in the year that they are received. Usually, this results in little or no tax since students tend to be in the lowest tax bracket and can claim tax credits for the personal amount and education-related expenses. Contributions can be withdrawn tax-free.
The value of your RESP depends on how much you’ve contributed each year, what assets your RESP is invested in, and how many years you’ve had the account for.
If you maintain annual deposits from the beneficiary’s birth until they turn 18, subtracting the actual contributions of $36,000, the account balance will have potential be totals $500,000. For a newly adult child, this is a sum that can enable them to achieve financial freedom ahead of schedule. See details in Invest in RESP
Investment loan
Provided by reputable banks, investment loans help investors overcome the lack of initial capital, giving them the opportunity to accelerate asset growth.
- Canadian tax residents
- Credit score of 680 or higher
- Approximately 2 years of declared income
- Preferably some assets
Some banks offer Quick Loans that do not require asset or income verification, with a maximum loan amount of $100,000 per bank. Contact our advisor now for more information
No collateral, zero down payment, low interest.
For a $100,000 investment loan, you only need to pay $662.5 in monthly interest with no need to repay the principal.
The investment loan is government-backed and provided by major banks.
We are responsible for assisting with the application and account management in the investment process, ensuring the safety of your funds without directly handling them.
The interest rate is P + 0.75%, currently 7.95% (as of June 25, 2024).
The loan term is 20 years. Upon maturity, it can be renewed, and there is no requirement to repay the principal.
Yes, you can. The specific amount you can withdraw depends on the policies and requirements of each bank and fund company, and it varies based on individual circumstances.
It depends on your personal financial situation, such as your assets, liabilities, income, and more. Please consult our advisor for assistance in planning appropriately.
You need to apply for loans through us (or any agency), with loan sources from banking institutions such as B2B Bank, Manulife Bank, iA Financial, Canada Life, and TD Bank.
You can check your credit score in your currently bank account or go to Equifax Canada to get a report.
Segregated Funds
Segregated fund contracts are potentially protected from the claims of some creditors in the event of bankruptcy and legal proceedings. Creditor protection depends on court decisions and applicable legislation, which can change. It can also vary from province to province. Keep in mind, creditor protection can never be guaranteed. Talk to a lawyer to find out more about the potential for creditor protection.
You can request withdrawals from a segregated fund contract at any time depending on the registration type. Any withdrawals you take will reduce the guarantees on the contract. Some withdrawals may be subject to early withdrawal charges. Withholding tax may also apply in some cases, and some or all of the withdrawal may be taxable. See your contract for more details.
The main difference between a mutual fund and a segregated fund contract is that a segregated fund contract includes insurance benefits that can help protect your investment. Segregated fund contracts guarantee 75% to 100% of your premiums being returned (reduced for any withdrawals) when you die or when the contract matures. Mutual funds don’t offer this benefit.
In general, segregated funds have higher fees than mutual funds due to the guarantees. However, fees will vary depending on the funds, and products you choose.
Yes, segregated funds can be held in your registered retirement savings plan (RRSP).
Yes, segregated funds can be held in your tax-free savings account (TFSA).
You can hold segregated funds in a number of account types, including Registered Retirement Savings Plans (RRSPs), Tax-Free Savings Accounts (TFSAs), non-registered plans, locked-in plans Registered Retirement Income Funds (RRIFs), First Home Saving Account (FHSA) and non-reg account.
When the annuitant undefined on the segregated fund contract dies, the death benefit is paid to the beneficiary named on the contract. The proceeds can be paid in different ways, either through:
- lump-sum payments or
- our legacy settlement option, which lets you make customized decisions for your beneficiaries.
The legacy settlement option can help address complex family dynamics, allowing you to maintain some control over your assets after death. For example, perhaps there’s a beneficiary or dependent who’s not responsible with money. In this case, you can set up a monthly payment plan that lasts for their life or a specific time period.
Another benefit to segregated fund contracts is privacy. If you have a named beneficiary, the distribution of money to that beneficiary will be private. However, that may not be the case with your will. Your will won’t govern how the money of a segregated fund is distributed, unless your estate is the beneficiary. Usually, if a will has been probated undefined anyone can see a copy of that will at the court office where it was probated.
Yes. A segregated fund is a financial investment product that comes with insurance, which does not require any health checks or underwriting. You can buy and sell segregated funds just like mutual funds.
Yes, you can withdraw from a segregated fund before the maturity date, however your guarantees will be affected. They will be proportionately reduced by any withdrawals or fees applicable to the withdrawal.
Ai Financial
We invest in segregated funds from major funds and insurance companies such as iA, Manulife, and SunLife. Segregated funds are investment products with insurance features, similar to mutual funds but with additional benefits such as principal protection at maturity and designated beneficiaries. They are ideal for long-term value investment.
Ai Financial has its own quality fund database. Funds in the database are selected in the following order to ensure continuous and stable profits:
• Research and select a stock portfolio of high-value leading companies.
• Choose funds from all fund companies that include these stock portfolios and put them into Ai Financial’s screening system.
• Evaluate and select fund managers whose values align with Ai Financial’s philosophy.
We adhere to the value investment philosophy and have our own “Locomotive Investment Theory,” focusing on long-term stable returns. We have successfully doubled clients’ assets in 5 years, helped clients turn zero assets into millionaires, and quickly earned new house down payments, thanks to our advanced and practical investment philosophy.
Process: For clients investing through Ai Financial, accounts and funds are held with the corresponding insurance companies and banks. Ai Financial acts as a broker, responsible for selecting funds, submitting fund purchase applications, applying for loans, and providing investment advice. We do not directly handle client funds. All operations require the client’s signature for execution. Clients can log into online banking anytime to view their account status.
Products: We choose segregated funds, which have insurance features that provide principal protection at maturity, creditor protection, and designated beneficiaries, making them an excellent choice for long-term investors.
Ai Financial does not charge fees. You need to check with your current financial company about any transfer fees.
TFSA, RRSP, RESP, Non-Reg, LIRA, LIF, FHSA, and others.
No. Our value investment strategy is the same, but we make adjustments based on each client’s personal situation. You can schedule a detailed consultation with our advisor using the online appointment tool.
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