The Most Important Places to Build Your Retirement Funds

Retirement is something that we don’t think about until it’s fast approaching. At W.B. White, we offer a variety of retirement savings and financial insurance programs for our clients in and around Oshawa, Ontario.

As a leading Canadian financial insurance broker, we set ourselves apart by customizing many of our options to meet individual needs. We understand that life is busy, and we are happy to help you meet retirement savings goals one step at a time.

Here, we’ll discuss some of the most important steps to take to build a retirement fund, and which are the best Canadian services to invest with.

Things to Consider When Determining How Much You Need to Invest

One of the questions we receive most frequently as an investment brokerage is, “How much should the average Canadian be investing for retirement?” This is a great question, but it depends on who you are and what you want out of your retirement.

Some things to factor into these calculations include:

• Living costs. This includes everything from your groceries and clothing to transportation and internet costs.
• Healthcare. In Canada, we’re lucky to have many healthcare services covered, but there still are medical expenses that will need to come out of pocket. Investing in personal medical insurance, and saving for potential future medical expenses is important, especially if you have existing medical conditions.
• Life insurance. This is an easy item to factor into your retirement plan, especially if you already have life insurance. This policy protects your loved ones from financial loss in the event of your passing. There are also life insurance policies that protect against chronic illness and disability costs.
• Housing. Whether you rent or own, housing is a huge factor in your retirement portfolio decision-making. Think about whether you want to keep your home long-term, move into an assisted living community, rent a timeshare to follow the sunshine, or any other living options that come to mind.
• Entertainment. It may not be as important as where you live, but you should account for more than the bare minimum when planning for your financial future. How much do you spend on entertainment now? Would you like to see this number stay the same, or do you think you’ll spend more on movies, theatre, museums, restaurants, and more?
• Travel. Travel expenses should include any trips you might take to see loved ones, vacations, and excursions. If you plan to travel, you want to set yourself up for financial success early.

Investing in a TFSA

A TFSA, or tax-free savings account, is a sheltered savings account you can build gradually and use in the future as part of your investment portfolio.

The account accrues high-interest savings and can be used to buy other investment products, like stocks and bonds. A TFSA differs from other savings accounts, like an RRSP, because it is not tax-deductible.

Like your RRSP, there is a set amount you are able to invest in your TFSA each year. This is set by the Canadian government. For example, this year, Canadians had a maximum contribution limit of $75,500.

The Benefit of an RRSP

Another retirement plan is called an RRSP, or registered retirement savings plan. Another account sheltered from taxes, any Canadian under the age of 71 can open an RRSP to begin saving for the future.

RRSPs are versatile investment plans because they can be used in many other ways. For example, first-time home buyers in Canada can borrow from their RRSP for a down payment. Individually, you can use up to $35,000 of your RRSP savings for this purpose, meaning a couple with individual accounts could take up to $70,000.

RRSP deposits can be claimed as tax deductions, and the government will match contributions up to 18% of your previous annual income.

Understanding Your CPP

The CPP, or Canada Pension Plan, is given to every Canadian, and is not reliant on how many years you’ve worked. If you are 60 years old, you are eligible to receive the CPP as long as you have made at least one contribution over your years of work.

You are eligible to receive the CPP for the entirety of your life, and your payments are based on your contributions and how long you’ve contributed. As of 2021, the maximum amount of money that CPP recipients can expect per month is $1,203.75.

Many Canadians don’t receive the full CPP amount, which is why having other retirement investment options available to you is wise.

Opening an RRIF

A registered retirement income fund, or RRIF, is unique to financial retirement plans because it is organized through your financial insurance provider, rather than a bank or the government. Your RRIF requires a minimum to be paid out the year after you open the account, and all earnings are tax-free.

RRIFs can be opened for multiple reasons, letting you have more than one in your name. Many of the rules governing your RRIF are similar to your RRSP account. You can work with your financial insurance provider to create the best RRIF plan for you and your needs.

Contact an Investment Insurance Provider Today

It’s never too early to start saving for your retirement, and you can do it with as little as $20 a week. A great way to begin budgeting for your retirement is by setting up automatic deposits into your designated savings account.

At W.B. White, we are proud to help our fellow Canadians and neighbours bring their retirement dreams to life. Currently, we offer a variety of financial insurance services, including:

• Tax-Free Savings Accounts
• Registered Retirement Savings Plans
• Registered Retirement Income Plans
• Registered Education Savings Plans
• Registered Pension Plans
• Group Retirement Savings Plans

If you’re interested in learning more about retirement planning and investments, we are happy to help you. We invite you to call W.B. White at 1-877-420-4572 or request a quote online. You can also visit our financial services page to read about the W.B. White difference. We look forward to serving you!