Well it is that time of year again. Everywhere you look, you will be bombarded with advertising for RRSPs. Unfortunately a large portion of the Canadian public spends more time planning for their annual 2-3 week vacation than they do planning for the longest vacation they will ever take …
Retirement.
The many advertisements offering RRSP solutions can be helpful to remind us to do something, but more often than not they tend to help us assuage our guilt of not having paid attention to financial planning. The countdown begins in February and many flock to a financial institution in the last days of contribution time to put something into an RRSP, usually into something called a Balanced Portfolio.
“Whew, I promise I will look at this closer and develop a plan for next year ….”
So what did you really get?
Is it the right plan for you? Do you understand the risk and reward of the investment and how it fits with your overall financial plan and goals. Have you considered regular monthly contributions to take advantage of dollar cost averaging and compound interest?
Would you be better in a TFSA (Tax Free Savings Account)? Are you an entrepreneur with your own company, or a professional with a corporate structure?
All of us have the opportunity to put our money in one of three Zones
- Fully taxable Zone (red zone)
- Tax deferred Zone (yellow zone)
- Tax Free Zone (green zone)
When working with a Financial Advisor, you have the opportunity to explore what is available to you and move as much of your hard-earned money as possible into the Tax Free Zone to help you reach your financial goals. Most Canadians are under the misconception that the only Tax Free Zone is the TFSA or their principal residence. There are other solutions available that are guaranteed that you will never lose your investment, especially for those with corporate structures.
The key is to have a solid relationship with your advisor; he or she must be someone you trust and are willing to share all your information and goals with. Only when your advisor has all the information are they able to help you formulate a plan that is right for you. So don’t be afraid to “interview” your advisor, make sure they are working for you and with you, and are truly listening to you. The key word is YOU! After all, it is your retirement and you are in control of what that will be.
Barbra Hopkins CPCA, CHS
CARP Recommended Financial Advisor, Sun Life Financial
3962 Borden St. Suite 101, Victoria, B.C. V8P 3H8
Tel: 250-385-1471 ext 2259, Cell: 1-250-715-5349
Home: 250-743-8600, Fax: 250-380-6011
E-Mail: barb.hopkins@sunlife.com
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