Whether you have accumulated retirement savings or haven’t yet started to save, the ECU Wealth Management investment professionals will work with you to develop your retirement plan. They can provide guidance regarding the best ways to start saving for your retirement, the types of investment choices available, how much you will need to save and how to protect the assets you have accumulated.
Evaluate your retirement savings
If you are already saving for retirement, let ECU Wealth Management’s professionals evaluate your plan to see if you are on track.
Retirement planning doesn’t stop when you retire
We can help you with strategies for: maintaining good returns on your investments, utilizing your accumulated savings more tax efficiently, and can assist you with maintenance or development of your estate plan.
Canada’s retirement income system
To enhance your retirement savings, the Canadian government has a number of programs that provide you with supplementary income. Within these plans you receive special tax treatment on the funds that are deposited into a registered retirement account.
There are three main pillars supporting Canada’s retirement income system through a combination of government and individual programs:
The first pillar – is the mandatory Canada Pension Plan (CPP) (or Quebec Pension Plan - QPP). The CPP is a compulsory contributory public pension plan that provides benefits to Canadian workers and their families during retirement, and in the event of disability or death.
The second pillar – is the Old Age Security system (OAS) that provides a guaranteed level of retirement income to all qualifying Canadians. This program consists of three public pension benefits: Old Age Security, the Guaranteed Income Supplement, and an allowance. The allowance is a secondary supplement to ensure that retired Canadians do not live in poverty.
The third pillar – is the government’s tax assistance for retirement savings. The tax system is designed to encourage retirement saving into Registered Pension Plans (RPP), Deferred Profit Sharing Plans (DPSP) and Registered Retirement Savings Plans (RRSP). Contributions to registered plans for retirement within these plans are exempt from taxation until such time as they are withdrawn as income. The benefit of these plans is that they provide for a deferral of taxation on both the original amounts saved and the interest earned on them.
Employer pension plans
Retirement plans offered by employers are one of the most convenient ways to prepare for retirement. The money is contributed pre-tax, and the earnings are not taxed until you start withdrawing the funds at retirement. The employer generally contributes on your behalf towards the retirement plan and these contributions are not taxed until withdrawal. These plans are generally well diversified and professionally managed.
Registered Retirement Savings Plans - RRSPs
An RRSP may be used to supplement your employer-sponsored plan, or as your primary retirement savings program. An RRSP is a government-sponsored plan through which you save money for your retirement years. Your contributions, within limits, are tax deductible, and the income earned is tax-sheltered. You can contribute into your own personal RRSP, or into a spousal RRSP, to maximize your current tax situation and the taxation of your retirement income.
What happens at retirement?
The first stage of an RRSP is to accumulate retirement savings. The next stage is to provide retirement income. Your accumulated savings may be invested in a variety of options to provide an ongoing retirement income throughout your life. Only the retirement income payments are taxed each year as you receive them, thus spreading the tax burden of your accumulated savings over your retirement years.
Retirement Income Options
When you want or need income after retirement, you can invest your RRSP savings in one or more of three retirement income options. You must either purchase a retirement income option or withdraw your funds before the end of the calendar year in which you reach age 69. The investment options available to you for your accumulated RRSP funds after retirement are:
- Registered Retirement Income Fund (RRIF)
- Term Certain Annuity to Age 90 (TCA 90)
- Life Annuity
Registered Retirement Income Fund - RRIF
RRIFs are generally similar to continuing an RRSP with the exception that you must take some taxable payments from them. You may choose any payment level annually as long as the total each year is at least equal to the mandatory minimum amount. In a RRIF you may increase your payments above the minimum; there is no maximum payment level. RRIFs can continue for the lifetime of the holder or their spouse.
Term Certain Annuity to Age 90 - TCA 90
The TCA 90 provides regular payments with a fixed rate of return, which can continue until age 90. If your spouse is younger than you, the TCA 90 can be purchased to continue to your spouse’s 90th year. Some issuers offer a TCA 90 where the yield and payments are periodically adjusted in accordance with changes in interest rates.
Life Annuity
A Life Annuity provides a series of regular payments that will continue for the rest of your life, no matter how long you live. There are two basic forms of Life Annuities:
- A Single Life Annuity with no guaranteed period gives the highest initial life annuity payments, but only for you.
- Joint and Last Survivor Annuity provides payments that will continue for the longer lifetime of either you or your spouse.
| Contact Us |
 |
|
| ECU Wealth Management |
Eva Englehutt CFP
519-742-9370
|
Jo-Ann Spicer CFP FMA EPC
519-742-9998
|
|
|