What can a financial advisor do for you?
Three factors to consider:
Consider the following scenario: Sarah and James are twins. Sarah is 25, busy and has a decent job, and decides to begin contributing to an RRSP. To make things easy, she contributes about $150 a month through an automatic plan. By the end of the year, her contributions total $1,800. Over the next 10 years she will build up a nest egg of approximately $25,000, assuming an annual rate of return of 6 per cent. At the age of 35, Sarah decides to focus on paying down her mortgage, as well as investing in a Tax Free Savings Account. She feels secure knowing that even if she doesn’t contribute to her RRSP again, it should grow to almost $153,000 by the time she turns 65.*
James takes a different approach than Sarah. Like his sister, he too has a steady job. He decides to start investing at the age of 37 and begins to make the $1,800 annual contribution. In order to keep up with Sarah, he will have to keep those contributions up for 29 years, as opposed to Sarah’s 10 years, to ensure he has a nest egg of just under $140,500 by the time he’s 65.*
“Determining when and how well you retire is reflective of how much time you spend focusing on your long-term priorities,” Patricia Domingo, Investment & Retirement Planner, RBC.
“While you and your spouse may have different long term goals, it’s important to plan together. An RBC advisor can help you build a plan that includes both your individual and shared goals.”
Spousal Registered Retirement Savings Plan (RRSP)
Using a spousal plan will allow you to receive a tax deduction and will attempt to equalize the amount of income each will receive in retirement. Each individual contributing to a spousal RRSP may be able to claim a deduction for the amount contributed.
Tax Free Savings Account (TFSA)
A TFSA can complement your existing savings plans and provides you with unique tax advantages. You and your family’s income earned on investments inside the TFSA are not taxable and can reduce your family’s overall tax bill.