Registered Savings Plans

Whether you’re saving for a home, early retirement or to make sure your kids get the best education possible, we can help you set up a registered investment plan to achieve your most important financial goals.

RRSP

Registered Retirement Savings Plan (RRSP)

RRSPs are the government approved plan that helps you save money for your retirement years and reduce your income tax. There are many different RRSP investment options available to meet your retirement goals.

RRSP details:
  • Anyone with earned income is subject to Canadian taxation;
  • RRSP deduction is based on your prior year's earned income;
  • Deduction for the contributions is 18% of earned income for the prior year, up to the maximum amount for the current year minus Pension Adjustment (PA);
  • An over-contribution is allowed but cannot exceed $2000;
  • Contributions made during the first 60 days of the year may be deducted for the current or immediately preceding year;
  • You can only contribute to an RRSP until December 31st of your 71st year;
  • Total contributions must not exceed the annual maximum;
  • The elimination of the foreign property rule allows unlimited foreign property holdings (this was previously set at 30% of the plans book value);
  • RRSP contributions to your plan are tax-deductible meaning you won’t have to pay as much income tax for the year;
  • Money invested in your RRSP, as well as the interest it earns, is tax sheltered until withdrawn;
  • Grow your retirement investment faster. All the earned interest will continue to compound within your investment. This means you’re earning interest on interest.
  • Some RRSP options include variable rate savings, term deposits, self-directed plans, and Mutual Funds* offered through Qtrade Asset Management Inc.

RRIF

Registered Retirement Income Fund (RRIF)

An RRIF provides a continual source of income from your converted RRSP, usually after you retire.

RRIF details:
  • Investments held in a Registered Retirement Savings Plan must be rolled over into a RRIF by the end of the year in which you turn 71 years of age;
  • You can set up the income to meet your needs by choosing the number, frequency and amount of the payments from your RRIF;
  • There is a minimum that must be taken out annually based on a formula from CRA requirements;
  • Set up your RRIF to meet not only your income objectives but your investment objectives as well;
  • Some of the investment options in a RRIF are the same as for an RRSP including variable rate savings, term deposits, self-directed plans, and Mutual Funds* offered through Qtrade Asset Management Inc.;
  • Both the principal and interest earned are tax sheltered. Only when the money is withdrawn as income does it become taxable;
  • Interest earned continues to compound;
  • Can be purchased at any time;
  • RRIF can be transferred, tax-free to your spouse at your death;
  • RRIF funds may be moved back into an RRSP (some conditions apply);
  • Other retirement vehicles available are Life Income Funds and Locked-in Retirement Income Funds;
  • RRIF funds may be eligible for the pension income tax credit.

RESP

Registered Education Savings Plan (RESP)

An RESP is a government approved plan that allows you to earn tax-free income while saving for the future post-secondary education of a beneficiary.

RESP details:
  • It provides peace of mind for parents, grandparents, relatives or guardians knowing you are helping to save for your family member's post-secondary education
  • RESPs accumulate tax-sheltered income, allowing for faster growth of your investment
  • Money can be invested in a savings account, term deposit, Mutual Funds* or a combination of all three
  • All RESP contributions remain tax-free until they are used. When the money is withdrawn, the beneficiary (student) claims the income rather than the subscriber (contributor), so the subscriber doesn’t pay tax on the investment income
  • There is no maximum annual contribution limit to an RESP, however there is a lifetime maximum of $50,000
  • There are two types of RESP plans: Individual and Family plans
    • Individual plan
      Limited to one beneficiary, who does not need to be related. A subscriber may be the beneficiary of an individual plan. There is no age limit requirement for a beneficiary under a single plan, but contributions must stop 21 years after the plan was entered into
    • Family plan
      Can have multiple beneficiaries but is restricted to siblings only. Joint subscribers can only be the spouse or common-law partner of the subscriber. Contributions can only be made on behalf of a beneficiary who is under the age of 21. The subscriber can contribute to a plan for 21 years subject to a lifetime contribution limit of $50,000 per beneficiary



RESP subscribers can also apply to receive these additional Canada education savings grants::

BC Training and Education Savings Grant:
  • The B.C. Government will contribute $1,200 to eligible children through the B.C. Training and Education Savings Grant
  • The grant is available when a child turns six. After that, you may apply any day before the child’s ninth birthday
  • If the child was born in 2006 or 2010 or later, members have until August 14, 2019 or the day before the child’s ninth birthday, whichever is later, to get the grant
  • To be eligible, the members and child(ren) must be residents of BC
Canada Education Savings Grant:
  • Human Resources and Skills Development Canada will contribute up to 20% of the first $2,500 a year, to a lifetime of maximum of $7,200 or $500 a year
  • Enhanced Grants are available to those that qualify. The enhanced grant provides for an additional 10-20% above the basic annual maximum of $500
  • The lifetime limit remains at $7,200 per beneficiary
  • The grant is only paid up to the end of the calendar year in which the beneficiary turns 17 years of age

Canada Learning Bond:

RDSP

Registered Disability Savings Plan (RDSP)

An RDSP is a savings plan to help parents and others save for the long-term financial security of a person who is eligible for the disability tax credit.

RDSP contribution details:
  • Contributions are limited to a maximum of $200,000 per beneficiary with no annual limit. Only one beneficiary per RDSP is allowed.
  • Contributions can be made until:
    • The beneficiary reaches age 59
    • The plan reaches the $200,000 maximum
    • The beneficiary no longer qualifies for the Disability Tax Credit
    • The beneficiary is no longer a resident of Canada for tax purposes
  • Contributions to an RDSP are not tax deductible, however, investment earnings that accrue within the plan grow on a tax-deferred basis. When earnings are withdrawn as part of a disability assistance payment, they are taxable in the hands of the beneficiary.
  • Contributions to an RDSP may qualify for payments from the Canada Disability Savings Grant (CDSG)* program, up to a lifetime maximum of $70,000 per beneficiary.
  • Lower-income families may qualify for payments from the Canada Disability Savings Bond (CDSB)* program without having to make a contribution to an RDSP, up to a lifetime maximum of $20,000.
Who’s eligible for an RDSP?
  • Beneficiary
    • Any Canadian resident under the age of 60 and eligible for the federal Disability Tax Credit.
  • Account holder
    • The legal parent or guardian of the beneficiary, or a public agency or organization can establish a plan. In cases where the beneficiary is of the age of majority, the beneficiary can also be named as the account holder.
*Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Unless otherwise stated, mutual fund securities and cash balances are not covered by the Canada Deposit Insurance Corporation or by any other government deposit insurer which insures deposits in credit unions.
Mutual funds, other securities and securities related financial planning services are offered through Qtrade Advisor, a division of Credential Qtrade Securities Inc. Mutual funds and related financial planning services are offered through Qtrade Asset Management Inc.