INVESTMENTS

What is a First Home Savings Account (FHSA)?

A First Home Savings Account (FHSA) is a Registered Savings Plan designed to help Canadians save for their first home. It combines the benefits of a Tax-Free Savings Account (TFSA) and a Registered Retirement Savings Plan (RRSP), providing unique tax advantages to make homeownership more attainable.

Key Features of the FHSA are:

Tax-Free Contributions
Contributions to an FHSA are tax-deductible, meaning they can reduce your taxable income, similar to an RRSP.

Tax-Free Growth
Investment earnings, including interest, dividends, and capital gains,    

grow tax-free within the account.

Tax-Free Withdrawals
Funds can be withdrawn tax-free if used for a qualifying first home purchase.

Eligibility:

You must be a Canadian resident aged 18 or older.

You cannot have owned a home in the four years prior to opening the account.

Contribution:

The annual contribution limit is $8,000, with a lifetime maximum of $40,000.

Unused contribution room can carry forward to future years, up to a maximum of $8,000 per year.

Using Your FHSA Funds:

You can withdraw funds tax-free to buy or build a qualifying home.

If unused, funds can be transferred to your RRSP or RRIF tax-free, without affecting your RRSP contribution room.

Why Open an FHSA?

The FHSA is a powerful tool to save for your first home while benefiting from significant tax savings. Whether you’re just starting your savings journey or looking for an efficient way to invest, the FHSA can help you achieve your homeownership goals faster.

Contact us today to learn how a FHSA can fit into your financial plan!

What is a Registered Retirement Savings Plan (RRSP)?

A Registered Retirement Savings Plan (RRSP) is a government-registered account designed to help Canadians save for retirement. Contributions are tax-deductible, and your investments grow tax-deferred, making it a powerful tool for long-term financial planning.

Key Features of the RRSP are:

Tax Savings: 

Contributions reduce your taxable income,      potentially resulting in a lower tax bill.

Tax-Deferred Growth: 

Pay no taxes on investment income until you withdraw funds.

Retirement Focused: 

Designed to help you save for the future you deserve!

Eligibility: 

You can contribute until the end of the year you turn 71.

Earned Income: 

Contribution room is based on 18% of your previous year’s earned income (up to an annual limit set by the government). 

 Contribution: 

Start contributing early to take advantage of compound growth.

Take Advantage of Unused Room: 

Carry forward unused contribution room indefinitely.

Invest Wisely: 

Hold a mix of Stocks, Bonds, GICs, and Mutual Funds to match your risk tolerance and retirement timeline.

Contact us today to learn how an RRSP can fit into your financial plan!

What is a Spousal RRSP?

A Spousal RRSP is a retirement savings account where one spouse (the contributor) contributes to an RRSP in the name of the other spouse (the annuitant). The contributing spouse receives the tax deduction, but the receiving spouse owns the account.

Key Features of the Spousal RRSP are:

A Spousal RRSP can be an effective income-splitting tool for retirement. If one spouse expects to have a significantly lower retirement income, this strategy helps balance retirement income between partners and may reduce the total household tax burden during retirement withdrawals.

Eligibility:

Spousal RRSPs are ideal for couples where one spouse earns a higher income now and expects to have a higher retirement income than their partner. By contributing to a Spousal RRSP, the higher-earning spouse can take advantage of the tax deduction now, while the lower-earning spouse pays less tax on withdrawals in the future.

Contribution:

The higher-income spouse contributes to the Spousal RRSP.

The contribution counts against the contributor’s RRSP deduction limit.
The receiving spouse owns the RRSP and will eventually withdraw the funds.
Withdrawals are taxed in the hands of the receiving spouse—if certain timing rules are met.
Invest Wisely:

Spousal RRSPs can provide a smart tax-saving strategy for couples with unequal incomes. Just be mindful of the attribution rules and coordinate your long-term retirement planning accordingly.

Contact us today to learn how a Spousal RRSP can fit into your financial plan!

What is a Tax-Free Savings Account (TFSA)?

A Tax-Free Savings Account (TFSA) is a flexible, Registered Savings Plan designed to help Canadians grow their money tax-free. Introduced in 2009, the TFSA allows you to earn interest, dividends and capital gains without paying taxes on those earnings.  It’s an ideal tool for saving for short-term goals, long-term investments, or anything in between. 

Key Features of the TFSA are:

Tax-Free Earnings: 

Keep 100% of your interest, dividends, and capital gains.

Flexible Withdrawals: 

Withdraw funds at any time, for any reason, without penalty. Use your money when you need it - tax-free!

Wide Range of Investment Options: 

Hold Cash, GIC's, Stocks, Bonds, Mutual Funds, and more.

Eligibility:

Age Requirement: 

You must be 18 or older.

Residency: 

You must be a Canadian resident with a Social Insurance Number (SIN).

Contribution:

Automate your savings for consistent growth.

No Impact on Benefits
    TFSA withdrawals don’t affect government benefits like Old Age Security (OAS) or the Canada Child Benefit (CCB).

Invest Wisely: 

Choose investments that align with your goals.

Know Your Limits
    Avoid over-contributing, as excess contributions are subject to a 1% monthly penalty.

Contact us today to learn how a TFSA can fit into your financial plan!

What is a Registered Retirement Income Fund (RRIF)?

 A Registered Retirement Income Fund (RRIF) is a government-registered account designed to provide income during retirement. It’s the next step after an RRSP—when you're ready to begin drawing from your retirement savings. RRIFs offer continued tax-deferred growth and flexible withdrawal options while ensuring you receive a steady income in retirement. 

Key Features of the RRIF are:

RRSP Conversion:

You must convert your RRSP into a RRIF by December 31 of the year you turn 71. This allows you to begin withdrawing retirement income while keeping your investments growing tax-deferred.

Tax-Deferred Growth:
Investments inside a RRIF continue to grow without being taxed until withdrawn

Eligibility:
Each year, you're required to withdraw a minimum amount, based on your age (or your spouse’s age if you choose). Withdrawals are fully taxable as income.

Earned Income:
While there’s a required minimum, there’s no maximum—you can withdraw more if needed, though additional amounts are taxed as income.

Estate Planning Benefits:
You can name a beneficiary or successor annuitant (e.g., your spouse) to ensure a smooth transition of assets upon your passing.

Contact us today to learn how a RRIF can fit into your financial plan!

What is a Registered Education Savings Plan (RESP)?

A Registered Education Savings Plan (RESP) is a government-registered account designed to help families save for a child’s post-secondary education. Contributions grow tax-deferred, and the government offers grants to boost your savings—making it one of the best tools for funding future education costs in Canada. 

Key Features of the RESP are:

 Tax-Deferred Growth:
Investment income earned inside an RESP is not taxed while it remains in the plan, allowing your savings to grow faster.

Government Grants:
The federal government provides a Canada Education Savings Grant (CESG) of 20% on the first $2,500 contributed annually, up to a lifetime maximum of $7,200 per child. Additional grants may be available for lower-income families.

Eligibility:
When your child enrolls in a qualified post-secondary program, funds can be withdrawn to cover tuition, books, housing, and other expenses. The student typically pays tax on the income and grant portions—often at a very low tax rate.

Contribution:
You can contribute up to $50,000 per child, with no annual limit. The sooner you start, the more you benefit from compound growth and grant opportunities. 

Multiple Beneficiaries (Family Plans):
You can open a family RESP for multiple children (must be related by blood or adoption), allowing you to share unused grants and earnings among siblings.

35-Year Lifespan:
An RESP can remain open for up to 35 years, giving plenty of time for education planning—even if a child delays post-secondary studies.

Contact us today to learn how a RESP can fit into your financial plan!

What is a Guaranteed Investment Certificate (GIC)?

A Guaranteed Investment Certificate (GIC) is a low-risk investment product offered by financial institutions that provides a guaranteed return over a set period of time. GICs are ideal for conservative investors who prioritize the safety of their principal investment while earning interest. 

Key Features of the GIC are:

 Guaranteed Return:
Your initial investment is protected, and you’re guaranteed a fixed or variable return based on the terms of the GIC. The interest rate is predetermined and paid at regular intervals or at maturity.

Fixed or Variable Terms:
GICs can come with a variety of terms:

• Fixed-rate: Earn a guaranteed interest rate for a specified period, typically ranging from 30 days to 5 years or more. 
• Variable-rate: Interest rates are tied to market conditions and may change during the term.

Low Risk:
Since GICs are backed by financial institutions, they are considered a safe investment. In Canada, they are also protected by the Canada Deposit Insurance Corporation (CDIC) up to $100,000 per depositor per institution.

Liquidity:
Some GICs are cashable or redeemable, meaning you can access your funds before the term ends (though this may result in lower interest rates or penalties). Non-redeemable GICs have higher returns but lock your money in for the agreed-upon term.

Contact us today to learn how a GIC can fit into your financial plan!