INVESTING

 

InvesTING

SEGREGATED FUNDS - A Segregated Fund is an investment with built in protection. It comes with maturity and death guarantees and has the ability to bypass probate upon death.   It is safe from creditors and you can name a beneficiary. This means your money can pass directly to whomever you wish, completely confidential.  

TFSA - Tax Free Savings Account is a type of tax shelter for an investment of your choosing. Any growth on an investment inside a TFSA will be completely tax free - as it grows and when it is taken out.  The amount an individual can contribute to their TFSA grows every year starting at age 18.  

RRSP - A Registered Retirement Savings Plan is a type of tax shelter for your investments.  Any growth on an investment inside a RRSP is considered tax deferred.   Putting money into a RRSP generates a tax deduction based on your current tax bracket.  However any money taken out of an RRSP is considered income the year it is withdrawn.  This means you pay taxes at your full tax rate on the full withdrawal.  

RESP - A Registered Education Savings Plan is a type of tax shelter for your investments. Any growth on an investment inside an RESP is considered tax deferred.  Canadian Education Savings Grant will match approximately 20% of annual contributions (Up to a maximum of $500 per year).  Money taken out of an RESP is considered income in the hands of the student in the year it is withdrawn. This means they will pay taxes on the full amount including the growth and grants at which ever tax bracket they are in. 

ANNUITY- An Annuity is an agreement between an individual and an insurance company.  The individual pays a lump sum to the insurance company and in return the insurance company pays the individual a set annual income.   This set income may begin immediately or at some point in the future. As a result, the risk is transferred from the owner to the insurance company, and the owner then has a steady stream of income usually during retirement. 

GIC/GIA - A Guaranteed Investment Account  or Gauranteed Investment Certificate is a deposit with an insurance company or bank by an individual with an agreement of interest to be paid in return over a set period of time.  GIAs have the ability to bypass probate and are creditor protected. GIAs can also have designated beneficiaries, this means your money can pass directly to whoever you wish, completely confidential.