Investments
Will there be enough Government Pension for a person to retire in the year 2040? Consider this: a person that is 45 years old in 2020, with no debt and minimal financial obligations, will be living well below the poverty line if they retire only on CPP and OAS.
Registered Retirement Savings Account (RRSP)
An RRSP has many advantages for current year taxes, tax deferring growth and supplementing retirement expenses. Is an RRSP the best solution for you? Since there are many factors such as age, income, time left before retirement, the amount saved, amount currently being saved that affects the validity of an RRSP for each person, using a formal financial plan will make the decision right for you.
Tax-Free Savings Accounts (TFSA)
Use a RRSP or a non-registered investment or a TFSA? What are your options? Is one better than the other? What makes one better for supplementing retirement versus supplementing Christmas shopping? There is no "one size fits all" and finding out what "size" you are is half the battle.
Tax-free savings accounts were introduced in Canada in 2009 with a limit of $5,000 per year, which is indexed for subsequent years ($6000 in 2021). The contributions are not tax-deductible and any unused room can be carried forward. This savings account is available to individuals aged 18 and older and can be used for any purpose. Find out what this means for you and your financial future.
Registered Education Savings Plan (RESP)
A post-secondary education for your child will not be free, it will not be cheap, and you will be expected to pay for it. Since most kids will attend a college or university well before their parents retire, having $50,000 to $100,000 ready to send your kids to a higher education will be a challenge. Tuition is rising much faster than inflation with no end in sight.
Using an RESP will attract a Federal Government Grant called the Canada Education Savings Grant and may attract a grant called the Canada Learning Bond. This money can accelerate your savings and provide more money for tuition and other education costs. The good news is whether your child attends a post-secondary school or not, you can always access your core money.