Advantages of RRSPs

• Tax savings and/or tax refunds
• Use up to $25,000 of your funds towards your first home
• Use a portion of your funds to pay for school (Lifelong Learning Plan – LLP)
• Tax sheltered growth

A tax-free savings account (TFSA) provides Canadians a way to earn investment income without having to pay tax.  Individuals, 18 or older and who have a valid social insurance number can hold a TFSA.

Income earned in a TSFA or withdrawals will not affect eligibility for Old Age Security, the Guaranteed Income Supplement, the Canada Child Tax Benefit, the GST/HST Credit, or Age Credit. This makes the plans especially attractive for individuals whose taxable investment income would reduce benefits from these programs.

RESP BASICS

• No annual contribution limit but there is a lifetime maximum of $50,000 for each beneficiary
• Contributions can be made over a 31 year period, and the RESP must be matured and fully paid out within 35 years
• The principal contributions are not tax-deductible and can be withdrawn tax-free any time
• Any growth remains tax-sheltered until it is paid out as educational assistance payments to the beneficiary
• Lower income families receive an additional grant of 10%
• Any unused CESG can be carried forward for use in another year, to a maximum of $1,000 per year
• Maximum lifetime grant per beneficiary is $7,200

WHAT IF MY CHILD DOES NOT PURSUE POST-SECONDARY EDUCATION?

1. Wait a while – Your child may change his or her mind about going to school. RESP accounts can remain open for 36 years.
2. Choose a new beneficiary – You can name an alternate beneficiary to receive the RESP income. In a family plan, the new beneficiary must be related by blood or adoption to the contributor. In this case, the CESG cannot exceed $7,200. Otherwise, any excess grants must be repaid.
3. Roll over to RRSP – You can defer the tax payable on the income withdrawal by rolling it directly into your RRSP or spousal RRSP, provided you have contribution room. The maximum rollover is $50,000 per contributor.
4. Withdraw contributions – Contributions made to the plan can be withdrawn at anytime on a tax-free basis. However, any grants paid on these contributions will be repaid to the government.
5. Withdraw earnings and growth – You are entitled to withdraw the earnings and growth on the contributions plus the earnings and growth on the grants (the grants themselves are repaid to the government) if you meet certain conditions.
6. Roll over to RDSP – If the beneficiary becomes disabled, as of 2014, there is new legislation that will allow you to move the accumulated income to a qualified Registered Disability Savings Plan for the beneficiary. This can be done on a tax-deferred basis with no 20% penalty.

REGISTERED DISABILITY SAVINGS PLAN

People with disabilities and their loved ones face a distinct set of financial challenges throughout their lives. To help address these challenges, the Government of Canada introduced the Registered Disability Savings Plan (RDSP) in 2008. Designed to help build long-term financial security for disabled persons, the RDSP makes it easier to accumulate funds by providing assisted savings and tax-deferred investment growth.

To qualify to be the beneficiary of an RDSP, an individual must:

• Be eligible for the Disability Tax Credit
• Be a resident of Canada
• Be less than 60 years of age
• Have a valid Social Insurance Number (SIN)

CANADA DISABILITY SAVINGS GRANTS (CDSG)

CDSGs are matching grants that the Government will deposit into the beneficiary’s RDSP to help accumulate savings.  The Government provides matching grants of up to 300%, depending on the amount contributed and the family net income.

WITHDRAWING YOUR MONEY

RDSP withdrawals must begin by the end of the year you turn age 60. You may withdraw funds earlier, but be sure to note that once a withdrawal of any amount is made, $3 worth of federal grants and bonds paid into the RDSP in the previous 10 years have to be repaid for every $1 withdrawn.  Withdrawals will consist of non-taxable contributions, taxable Government monies and taxable growth.

For full information on RDSPs and Government grants and bonds, visit the Government of Canada website.

KEY BENEFITS OF AN RDSP

• Money contributed grows tax free.
• Anyone can contribute to an RDSP with the written consent of the account holder.
• Contributions can be matched, based on family income, with up to $3,500 a year in Canada Disability Savings Grants (CDSG) and up to $1,000 a year in Canada Disability Savings Bonds (CDSB).
• Carry forward on CDSG and CDSB is available back 10 years or to date of diagnosis.
• The total lifetime contribution for each beneficiary is $200,000, with no annual contribution limits.
• If a parent or grandparent passes away and has a financially dependent child or grandchild, they can transfer up to $200,000 of their RRSP/RRIF or RPP to the dependent’s RDSP on a tax-deferred basis.

TAKE ADVANTAGE OF GOVERNMENT HELP

Canada Disability Savings Grant
Through the CDSG, the Government deposits money into your RDSP to help you save, providing matching grants of 300%, 200% or 100%, depending on the amount contributed and the beneficiary’s family net income. The maximum is $3,500 each year, with a lifetime limit of $70,000.

Canada Disability Savings Bond
Through the CDSB, the Government deposits money into the RDSPs of low-income and modest-income Canadians.  If you qualify for the bond, you could receive up to $1,000 a year, with a lifetime limit of $20,000.

Since ETFs were first offered, they have evolved to offer a range of benefits and are managed using a variety of different approaches.  ETFs remain one of the most popular and innovative investment solutions available to investors.

To help address an investor’s risk profile, mitigate impact of market volatility and deliver an appropriate investment mix, we offer risk-based asset allocation solutions with ETF Portfolios. These multi-asset portfolios are constructed using a combination of Exchange Traded Funds to create a one-ticket solution.