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  • Home > investing/advice > Registered Plans > RRSPs

    Registered Plans

    contact us There are five types of government-regulated investment plans every Libro owner should know more about. After you get a taste for it here, be sure to talk to your Libro Coach about the details and getting yourself in the right place for success.

    Registered Retirement Savings Plan

    Many years ago, when the government started to realize Canada's Pension Plan might not provide enough money for people to live on, they created a program called Registered Retirement Savings Plans. You put in your own money, grow it by investing and presto - you'll have enough money to live comfortably when you retire.

    And the really cool thing: you can deduct what you contribute from your taxes today, and you don't have to pay tax on the growth inside the plan.

    No taxes - until you use the money - not bad. Especially since many people have lower income (and lower taxes) when they start using the money.

    Fast forward to now. Everyone knows the markets for investments are up and down, term deposit rates are very low and growing your money beyond what you put in is tougher than ever.

    That's why you have a Libro Coach. To keep your plan on track, to keep your expectations real, to find balance between paying off debt, investing for tomorrow, helping your kids and living a little now.

    Libro is very good at helping owners with their RRSPs. Talk to us today.

    Ask us about RRSP Loans and when they make sense (and when they don't).

    Ask us about RRSP top-ups - how to maximize your contributions.

    Ask us about pre-authorized savings plans for your RRSP - that's the best way save pain-free.

    Ask us about self-directed RRSPs.

    Registered Retirement Income Funds

    A RRIF is a registered fund that you have to transfer your RRSP savings into before December 31st of the year you turn 71. It sounds complicated - it's not. Here's what happens:

    1. You transfer your funds from the RRSP to the RRIF with help from your Libro Coach.
    2. Your RRIF generates retirement income at a rate you can control - which in turn manages the amount of tax you will pay on that income. Remember your RRSP was only deferring taxes until you needed the money or turned 71. Time's up - but you can control the tap a little and your income can be low enough that the taxes you generate are low as well. In other words, spread it out.
    3. The money in your RRIF can be held in any of the investments you selected for your RRSP. Have a plan and be sure your understand exactly how the plan works.
    4. Your RRIF will trigger estate planning options, investment decisions and other financial choices. Make those choices from an informed point of view. Your Libro Coach knows this world and knows you - that's a tough combination to beat.
    5. Ask your Libro Coach to walk you through the RRIF calculator in person. You'll get to know the numbers and that leads to peace of mind.

    Registered Education Savings Plans

    When you were starting university, the costs were likely half of what they will be for your children.

    Education costs are increasing every year and there is no reason to expect a decline. Almost every form of employment requires some form of post-secondary education or training.

    So - the government wants to give you money to make it easier for you to help your children attain post-secondary educations without going into massive debt.

    What more do you need to know? Here's how RESPs (Registered Education Savings Plans) work.

    • Canada Education Savings Grant: The government will give you $500 (or 20%) for every $2,500 you contribute per year per child. Contribute the max for 10 years and that means you get $5,000 free money plus the interest. Based on your net family income, you may be eligible for an additional 20% on the first $500 of annual RESP contributions.To save $2,500 per year, you need to find a few pennies over $200 per month. Your Coach will help. Even if you don't hit the max number, the free money still adds up. The lifetime maximum you can receive is $7,200.
    • Canada Learning Bond: You may be eligible for the Canada Learning Bond as well. This bond is for families who are eligible to receive the National Child Benefit. The maximum amount available is $2,000.
    • Visit www.serviceCanada.ca and follow the links to raising a family for more details on available government grants.
    • An RESP is tax-deferred - not tax-deductable. The beneficiary must be a Canadian resident.
    • The maximum lifetime contribution is $50,000.
    • Annual contribution deadline is December 31.

    A Libro Coach is always available to provide you with advice to build an effective registered education savings plan. We can help you choose the right investments and will review your plan with you on a regular basis to ensure it remains in line with your goals, time horizon and risk tolerance.

    Get started by talking to a Libro Coach today.

    For more detailed information about RESPs, click here.

    Tax-Free Savings Accounts

    Tax-Free Savings Accounts (TFSAs) were created to help Canadians save and grow their money outside their RRSPs. Good idea; get the details here - Libro offers many investment options to help your TFSAs contributions grow tax-free.

    Even better, we help you create strategies to find balance between RRSP contributions, RESP contributions, TFSA contributions and contributing to your need for new shoes, a new truck or the odd night out for dinner from time to time.

    Registered Disability Savings Plan

    People with disabilities and their families face a distinct set of financial challenges throughout their lives. To help address these challenges the Government of Canada introduced the Registered Disability Savings Plan (RDSP). The RDSP is designed to help build long-term financial security for people with disabilities. An RSDP makes it easier to accumulate funds by providing assisted savings and tax-deferred investment growth.

    What is an RDSP?

    The RDSP is a tax-deferred savings vehicle introduced by the Government of Canada to help parents and others save for the long-term financial security of people with severe disabilities.

    Eligibility

    A Canadian resident under the age of 60 who is eligible for the Disability Tax Credit (DTC) is eligible for an RDSP. The DTC is available to individuals who have mental or physical impairments that markedly restrict their ability to perform one or more of the basic activities of living (i.e., speaking, hearing or walking). The impairment must be expected to last a period of one or more years, and a physician must certify the extent of the disability. Individuals can apply to the Canada Revenue Agency (CRA) for the DTC using form T2201.

    To qualify for an RDSP, you must:

    • Be eligible for the Disability Tax Credit
    • Be a resident of Canada
    • Be less than 60 years of age
    • Have a valid Social Insurance Number

    Talk with a Libro coach to see if RDSPs make sense for your financial plan.

    You can also learn more about RDSPs at the CRA's website here.