HOW WELL ARE YOUR INVESTMENTS DOING?
ARE YOU GETTING THE MOST OF YOUR SAVING PLANS ?
HOW WELL ARE YOUR RRSP, TFSA, RESP'S OR NON-REGISTERED INVESTMENTS DOING?
Under the Roman Empire, pensions were simple: after 20 years of service, legionnaires (who managed to survive!) were entitled to a lump sum and a plot of land. Nowadays, retirement planning isn’t quite so straightforward. You have lots of options to choose from… but you also help and advice from a professional when it comes to:
Tax-Free Savings Accounts (TFSAs)
• 46% of Canadians still don’t have a TFSA
• 31% admit that they don’t understand how TFSAs work
• 38% don’t know the current annual dollar limit for TFSAs
MOST IMPORTANT ABOUT TFSA'S : THEY ARE INVESTMENT ACCOUNTS, not just simple savings accounts.
Registered Retirement Savings Plans (RRSPs)
• 41% of Canadians don’t have an RRSP
• 79% of RRSP holders won’t be making the maximum allowable contribution this year
• 72% of RRSP holders have unused contribution room
MOST IMPORTANT ABOUT RRSP'S: 90% of investors don't know that there are RRSP'S THAT HAVE GUARANTEES, however, ost of those are sold by Financial Advisors that are NOT working for a bank.
As RRSP season is approaching fast, think about diversifying your portfolio. This is the most important thing that you can do.
Yes, it is important to pay your MORTAGAGE faster, but thing about it : today's mortgages have interest rates of 2.5-3% interest rates, as where investments have performed and made over 10-18% , or even better, for the last couple of years.
The smartest thing is to DO BOTH increase your mortgage payment a little bit, to get to the point where you have more than 25% equity in your house, but, at the same time, start investing.
If an individual who is in 39% tax bracket puts money in an RRSP every year, they reduce their tax obligation, for that deposit , by 39% . Think of it like making 39% interest on that deposit. When you get a tax refund from Canada Revenue, use the refund to either pay a lump sum against your mortgage, or, even better, put the refund in top of that RRSP. Next year you will get a refund on that refund. And so on. So yes, you can pay against your mortgage, and save for your retirement at the same time.
Do not forget that you have to beat the inflation, therefore, a proposal from your bank of 2% interest rate per year on your RRSP, GIC, TFSA's is NOT securing a profit. You are in fact LOSING MONEY , as the rate of inflation is over 3% as of date. You should not try to secure your deposit by buying a lousy GIC, you should try to SECURE YOUR GUARANTEES. Chose a segregated fund for your RRSP, TFSA or RESP's for your kids! Those are sold just by Independent Financial Advisors, NOT THE BANKS.
DIVERIFY, DIVERSIFY, DIVERSIFY!