Life Insurance & Investments RRSP, RRIF, LIRA, LIF & TFSA

RRSP, RRIF, LIRA, LIF & TFSA

A Registered Retirement Savings Plan (RRSP) is a savings plan registered with Revenue Canada to assist and encourage Canadians to save for their own retirement.

RRSPs are set up so that an individual holds a variety of investments which are sheltered from tax. The purpose of using this vehicle is to provide a retirement income.

Two major advantages to contributing to an RRSP are:

  • Contributions are deductible from current income for tax purposes (up to a certain limit).
  • Investment income sheltered within the plan accrues tax free, until the individual retires or makes a claim.

Types of RRSPs are: Basic RRSP, Group RRSP, Self-Directed RRSP

For more information contact us or visit the Canada Revenue Agency Website

 

Tax-Free Savings Account (TFSA)

What is a TFSA?

The TFSA program began in 2009. It is a way for individual who are 18 years of age or older and who have a valid social insurance number (SIN) to set money aside tax free throughout their lifetime.

Contributions to a TFSA are not deductible for income tax purposes. Any amount contributed as well as any income earned in the account (for example, investment income and capital gains) is generally tax-free, even when it is withdrawn.

Administrative or other fees in relation to a TFSA and any interest on money borrowed to contribute to a TFSA are not tax-deductible.

How to open a TFSA?

You can have more than one TFSA at any given time, but the total amount you contribute to all your TFSAs cannot be more than your available TFSA contribution room for that year.

To open a TFSA, contact a financial advisor at Ogilvy.

As the account holder you are the only person who can do the following with your TFSA:

  • Make contributions
  • Make withdrawals
  • Determine how funds are invested

You will accumulate TFSA contribution room for each year even if you do not file an income tax and benefit return or open a TFSA:

  • The annual TFSA dollar limit for years 2009, 2010, 2011 and 2012 was $5,000
  • The annual TFSA dollar limit for year 2015 was $10,000
  • The annual TFSA dollar limit for years 2016 and 2017 was $5,500
  • The TFSA annual room limit will be indexed to inflation and rounded to the nearest $500

Investment income earned by, and changes in the value of your TFSA investments will not affect your TFSA contribution room for current year or future years.

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