TFSA
For projects, safety margin and eligible withdrawals that are generally not taxable.
View TFSASavings and retirement
First the container, then what goes in it
RRSP, TFSA, FHSA, RESP. These are not investments, they are accounts. Containers, each with its own tax rules. What actually grows your money is what you put inside. Confusing the two is the most common mistake, and the most expensive.
The containers
Four accounts, four tax logics
The right account depends on your income today, the income you expect in retirement, and when you will need the money.
RRSP
Contributions reduce your taxable income today. Tax is deferred, you pay it on withdrawal, in principle at a lower rate in retirement.
TFSA
No deduction on contribution, but growth and withdrawals are tax-free. Withdrawn room is restored the following year.
FHSA
For a first home. It combines both advantages, a deduction on contribution like an RRSP and a tax-free withdrawal like a TFSA.
RESP
For a child's education. The provincial and federal governments add grants to every contribution, an immediate return nothing else matches.
Two other containers come up often. A LIRA receives money transferred out of an employer pension plan when you leave, and its withdrawals are governed by law. A non-registered account has no contribution limit, which makes it the logical next step once the others are full.
What goes inside
What I can hold in these accounts
I offer insured savings products. Segregated funds for growth, annuities for income, and for the risk-free portion guaranteed interest funds along with a high-interest savings account for money that has to stay available. All of it fits inside any of the accounts above.
These are insurance contracts with an investment component. That legal nature gives them three features a brokerage account does not have.
Segregated funds
Three differences that matter
These contracts come in several guarantee levels. The higher the guarantee, the higher the fees, and that is the central trade-off of the product. Some series favour growth and low fees, others stronger protection at death, others still a guaranteed income for life.
Guarantees on capital
The contract guarantees a percentage of your deposits at maturity and at death. The exact percentage and conditions vary from one contract to another, and we read them together before you sign.
Fast settlement at death
With a named beneficiary, the capital is paid directly to them, bypassing the estate. That avoids probate delays and the fees that come with them.
Possible creditor protection
Depending on the beneficiary designation, the amounts may be exempt from seizure. This is often decisive for a self-employed worker or a business owner. The conditions are strict and deserve a close look.
Drawing down
Turning savings into income
Building up savings is one thing, living off them is another. At retirement, an RRSP converts to a RRIF and locked-in amounts to a LIF, with minimum withdrawals set by law.
I can also set up an annuity, meaning income paid at fixed intervals, guaranteed for a set term or for life. It is the only product that removes the risk of outliving your savings.
The choice between gradual withdrawals and an annuity is not either-or. Most strategies combine both, and the right proportion depends on your other income sources, your health and what you intend to leave behind.
The day it counts
The goal is not the return, it is what the return allows
A sound withdrawal plan answers one simple question. How much can you take out each year without fearing you will run out? We look at your income sources, your horizon and your tolerance for risk, then we set a pace you can hold.
Frequently asked
What people ask me
RRSP or TFSA, which first?
It mostly depends on your tax rate today compared with the one you expect in retirement. High income now, the RRSP works hard. Modest income, or a need for flexibility on a medium-term project, the TFSA often wins. We run the numbers with your figures, not a rule of thumb.
I don't have large amounts to invest. Is it worth it?
Yes, and that is precisely where regularity counts most. A modest automatic transfer started early almost always beats a large amount deposited late. We can start small and adjust later.
Is my money locked in?
No, but some contracts charge fees if you withdraw in the first few years, and an RRSP withdrawal is taxable in the year it is made. These conditions are written in the contract and I explain them before signing, not after.
How is this different from what my bank offers?
The difference lies mainly in the nature of the product. Segregated funds are insurance contracts, with contractual guarantees, beneficiary designation, possible creditor protection. In exchange, their management fees are generally higher than a comparable fund without guarantees. The right choice depends on what you are looking for.
Please note. The descriptions above are summaries for
information purposes and are neither tax advice nor an investment
recommendation. The guarantees, fees, withdrawal restrictions and
conditions that apply are those of the contract issued by the insurer,
which prevails at all times. The value of a segregated fund fluctuates
and past returns do not guarantee future returns.
Shall we look at where your savings go?
A 30-minute meeting, free of charge. We establish what you set aside, in which account, and why.