Here's where you can really take charge of your retirement savings plans. The options listed below are available to anyone and we encourage you to explore which ones would work best for your own situation. Take the time to research your options and talk to a financial advisor. Remember, the earlier you begin contributing to your personal savings and investment plans, the better. As your investment income is reinvested (compound interest) over time you will see your profits accelerate over time.
- Registered Retirement Savings Plan (RRSP): Open to all employed or self-employed people in Canada up to age 71, an RRSP is a registered investment account that provides a tax refund on your contributions. There is no tax payable on investment income, but you pay tax on all withdrawals, which must start when you are aged 71.
- Tax-free Savings Account (TFSA): TFSAs are registered investment accounts open to anyone over the age of 18 with a valid Social Insurance Number. You pay no tax on investment income or withdrawals. You do not receive a tax refund on your contributions.
- Non-registered savings plans: Anyone over the age of 18 (or 19 in some provinces) can open a non-registered investment account. Investment income and capital gains generated in a non-registered account are subject to tax.
- Reverse mortgage: Available to Canadian homeowners who are 55 or older. A reverse mortgage is a tax-free loan (for up to 55 percent of your property's value) secured against the equity of your home. Repayment is postponed until you sell your house.
Most people take advantage of either an RRSP or a TFSA, or both. Click here to learn their pros and cons and which would work best for you.
Want more information about registered and non-registered accounts? Here's the lowdown.
Thinking of a reverse mortgage? Read this first.