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Investment Advice

Investment advice is focused on investments and is offered by an Investment Advisor to sell varies types of investments. The main investment account options are Investment Account, Registered Retirement Savings Plan, Registered Retirement Income Fund, Tax Free Savings Account and Registered Educational Savings Plan.

Investment Account

This is often referred to as a taxable account or a non-registered account. Taxable benefits such as interest income, dividend income and capital gains are taxable and must be included as income and taxed accordingly.


Registered Retirement Savings Plan

This is the most popular savings option investors use to save for retirement. Contributions made to an RRSP are limited to 18 per cent of your earned income to a maximum annual amount and the contribution made for a specific calendar year may be used as an income tax deduction.

No income taxes are paid on investment income while the funds are held within the RRSP.

Money withdrawn from an RRSP is added to the taxpayer’s income for the year the withdrawal is made and is taxed along with other types of income.

At age 71 the RRSP ends and the most popular option is to transfer assets tax-free into a Registered Retirement Income Fund.


Registered Retirement Income Fund

Think of an RRIF as an RRSP in reverse. You cannot make any new contributions and there is a minimum amount required by the government that you must withdraw every year. You can withdraw any or all of your RRIF at any time. Funds withdrawn from an RRIF are added to income and taxed.

You can continue to hold the same investments as owned in your RRSP and you have the ability to make investment changes similar to what was allowed with an RRSP.


Tax-Free Savings Account

Tax-Free Savings Accounts were introduced in 2009 as an added incentive to encourage Canadians to save. Unlike the RRSP, any contributions are not able to be an income tax deduction and as funds are withdrawn from the TFSA they are not added to income.

The real advantage with a TFSA is that all funds held within the plan are free from any income tax obligation and no taxes are paid when funds are withdrawn. Canadians now have their own made-in-Canada tax haven.


Registered Educational Saving Plan

The Registered Educational Savings Plan was designed to encourage families to save for the post-secondary education of their children and grandchildren. The definition of post-secondary education is very broad and covers university, college and applied training, either full time or part-time.

There is a government grant of 20 percent up to $1,000 a year to a maximum of $7,200 per child. This can be an excellent savings investment to help pay for continued education.