Account Types

A Registered Retirement Savings Plan (RRSP)  is a savings plan that allows individuals to defer the taxes on investments until they are withdrawn at retirement. Contributions to an RRSP are tax deductible from the income generated in the year of the contribution. Taxes on interest income, dividend income, and capital gains are not paid while the investments are held within an RRSP. When it is time to redeem from your RRSP to subsidize your retirement needs, the amount withdrawn is taxable at your marginal tax rate.

A Registered Retirement Income Fund (RRIF) is a retirement plan used to generate income from savings accumulated within an individual’s Registered Retirement Savings Plan (RRSP) and Registered Pension Plan (RPP). A RRIF can be opened anytime but no later than the end of the year that you turn 71.  Contributions are not allowed in this type of plan but you can have more than one RRIF.  You are required to take out a minimum amount from the RRIF each year.

The Tax Free Savings Account (TFSA) is a relatively new investment vehicle whereby the investments held within the plan can grow tax free. In a non-registered investment account, investors are subject to taxes on interest income, dividend income, and capital gains. How is the TFSA different than an RRSP? The RRSP allows individuals to defer income taxes until retirement; whereas capital gains and income provided by the TFSA are exempt from any taxes; however, unlike the RRSP,  contributions made to the TFSA are not tax deductible. The TFSA was established in 2009 and allows for annual contributions of $6,000. That amount can be carried forward if it was not used for the previous year. If an individual contributes $5000 annually and the investment grows at a rate of 5%, the value of the TFSA would be $238,635.49 after 25 years. The TFSA is a tax-efficient way of building wealth for the future.

• Locked-In Retirement Account (LIRA)
• Locked-in Income Fund (LIF)
• Non-Registered Account
• Registered Disability Savings Plan (RDSP)
• Registered Education Savings Plan (RESP)