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RRSP - Retirement Saving Plan Investment

RRSPs: We can tailor your portfolio to your needs using Guaranteed Investment funds. We also offer RRSP loans and Spousal RRSPs. Your money / investment grows tax free.

Whether you are retiring next year or in 30 years...Don’t leave your retirement to chance!
You have two choices...
Retire Later!
Build your own secure retirement plan!

Building a Secure Retirement Plan
Depends on knowing...
What are your dreams?
How much will it cost?
Where will you get the money?

What are Your Retirement Dreams?
Retirement age is relative. Some people retire at 40 or after 20 years of service. Some people work through their 80’s. Many others retire as soon as they are eligible.

Because you can expect to live twenty to thirty years after retirement, you may worry about how much money you’ll need. Often your choices of retirement dates, pastimes and lifestyle will determine the “How Much”?
What do you want to do with the extra 2,000 hours per year you will have? Before beginning the financial aspects of your retirement plan, be sure to take your personal visions into account.

A Retirement Idea Checklist
What would you do today...if you retired yesterday?

Learn a new hobby Take new college courses
Cruise the Islands Open your own business
Backpack through Europe Volunteer at local charities
Catch up with old friends Plant a garden
Perfect your golf game Take tennis lessons
Spend time with family  

How Much Will You Need?
If you are like most people, you may find an alarming gap between what you think you need for a comfortable retirement and the amount of money you will actually have in your nest egg.

Most experts agree that you will need at least 75% of your pre-retirement income to maintain your current lifestyle at retirement. Of course, if you develop expensive hobbies, this amount may increase.
Source: Employee Benefit research Institute, 1994.

So, if you currently make $5,000 a month or $60,000 per year, you will need approximately $3,750 per month or $45,000 per year at retirement. This of course does not include the impact of inflation. However, if inflation averages 4% per year, you will need over twice as much income in 20 years just to meet the same expenses.

During Retirement

These expenses typically increase...
· Vacations and entertainment · Nursing Home
· Hobbies · Home maintenance
· Gifts to families and charity · Property taxes
· Health Care and Insurance  

These expenses typically decrease...
· Home Furnishings · Mortgage (usually eliminated)
· Education funding · Personal Care Items
· Paying for Weddings · Transportation
· Business Wardrobes  

Where Will the Money Come From?

Financial Investments - RRSP

  • Canada's retirement income programs provide an important source of income for today's retirees.
  • OAS and GIS benefits account for more than half of all income of tax filers over age 65 whose income is less than $20,000.
  • For retirees making $60,000 or more per year, retirement programs account for only 25% of their income. The balance comes from investments and employment.
  • About 4 in 10 taxpayers aged 25 to 64 save for their retirement through RRSPs or registered pension plans each year.
  • Many people underestimate the importance of personal savings. This may mean the difference between a comfortable retirement and a reduced standard of living.

Source: Statistics Canada, The Daily, March 6, 1996

Which Nest Egg Could You Live On?

Start with... Monthly withdrawal to reduce your
nest egg to zero...
Monthly withdrawal to keep your original nest egg...
  10 years 20 years  
$10,000 $107 $ 68 $ 46
25,000 269 170 115
50,000 537 340 230
60,000 645 408 276
80,000 859 544 368
100,000 1,074 680 460
200,000 2,138 1,349 886
300,000 5,345 3,372 2,216
Assumptions: After tax interest rate of 5.5%.

Are you happy with the nest egg you are building?

Three Keys for a Comfortable Retirement

  • Invest Early
  • Invest Wisely
  • Save More

Invest Early...
As difficult as it is to save a large percentage of your salary, starting early will make a significant difference in the amount you will have to save.

For each decade you delay in saving for retirement, you will have to more than double your savings rate to replace only 70% of your salary at age 65.

Starting Age

% of Salary Needed to Save

30 10%
40 21%
50 48%
55 84%

Invest More Wisely...
Depending on your risk tolerance level, if you can invest your funds in higher returning vehicles you can accumulate your funds at a faster rate.

For each 2% points more you can earn, you can cut your monthly savings requirements significantly.

Years to
Retirement

Monthly
8%

Amount to Invest for each $100,000

10% 12%
30 $67 $44 $28
25 $104 $75 $53
20 $169 $131 $100
15 $287 $239 $198
10 $543 $484 $430
5 $1,352 $1,281 $1,212

Save More...
Due to the power of compounding, even a small increase in savings can yield a big difference over time at 8%.

Savings Over 25 Years

Wealth Accumulation
Ideas on how money can be used:

· Emergencies · Vacation
· New Home · Retirement
· Education · Wedding
· Start a Business · New Car

Unfortunately, money does not grow on trees...Money must be saved over a period of time.

Several items must be considered when planning for any long or short term financial goal.

  • Time
  • Growth
  • Safety
  • Liquidity
  • Taxation
  • Inflation

 

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