Financial Plan for Retirement
Retirement planning is a cornerstone of a strong financial plan. If you want to be able to enjoy this stage of life to the fullest, financial security at retirement is crucial. A solid retirement plan uses investment principles to achieve the financial goals you have set. Whether you are starting out in a career, nearing retirement, or somewhere in between, you should have your retirement plan reviewed annually and invest regularly for optimal returns. Our trusted BIG financial advisors are excellent retirement planners. They can review your retirement planning and develop a strong financial plan for your future so you can enjoy retirement life!
Retirement Savings Plans
Registered Retirement Savings Plan (RRSP)
One of the best ways to save for retirement is with an RRSP, and it even provides tax breaks along the way. You and a legal spouse or common-law partner may contribute to your RRSP. Most contributions are tax deductible, helping to reduce your annual income tax. No tax is deducted from the funds while they remain in the plan. When any money is withdrawn, either for payments at retirement or other financial need, tax must be paid on funds received.
Registered Retirement Income Fund (RRIF)
A registered retirement income fund is an investment vehicle with a carrier (insurance company, trust company or bank) registered with the federal government from which you receive income at retirement. You transfer money from your RRSP or other eligible plans and the carrier makes payments to you. Once the RRIF is set up, you can no longer make contributions to the plan, however, you can create more than one RRIF. There is a minimum amount you must take from your RRIF each year, but there is no maximum. At the time of death, any money left in the RRIF will go to named beneficiaries or your estate.
Life Income Fund (LIF)
A LIF is a type of RRIF that acts as an investment vehicle for locked-in pension funds and other assets that will be used for retirement income. The Income Tax Act dictates the minimum and maximum amounts for withdrawal for RRIFs (and LIFs) each year. Based on the annual statement provided form the financial institution, the LIF owner must decide at the beginning of each fiscal year how much income they would like to withdraw.
Life annuity is a type of insurance that guarantees income payments for life. Joint life annuity guarantees income for 2 lifetimes (you and your spouse or common-law partner). Once purchased, the income is guaranteed, so you never have to worry about contributions or out-living your amount. Income received from a life annuity may also qualify for federal pension income tax credit.
Permanent Life Insurance for Retirement
Life insurance can enhance your retirement planning by protecting your income, managing taxes, planning your estate, and cascading wealth to future generations. It may also provide increased benefits that protect your beneficiaries from debt, provide options to divide illiquid assets among beneficiaries, and offer relief from high costs associated with covered chronic illnesses. To find out if life insurance will benefit your retirement planning, get in contact with a BIG life insurance broker today.