Maximize growth with retirement savings outside an RRSP!

The only vehicle known to most for retirement saving is the RRSP. The recent growing popularity of GIF (Guaranteed Investment Funds) is now changing the way we view saving for retirement. Imagine obtaining the following benefits outside an RRSP:

 

Tax deductions

Contributions or payments are 100% deductible from your taxable income.

 

Preferred taxation on growth

Growth inside your portfolio are taxed as capital gains (currently 50%) as oppose to an RRSP which are fully taxable as income (100%).

 

Potential for accelerated growth

Growth is accelerated or magnified when compared to an RRSP with identical funds and returns!

 

 

Responsible leveraging

When you buy a home and obtain a mortgage you are leveraging. In simple terms, you are borrowing to invest. Most people do this because they feel it's an acceptable risk with safety nets in place. Banks provide mortgages because they use your home as collateral, since they too avoid risk. This is responsible leveraging.

 

Some major Canadian banks, as conservative as they are, now view borrowing to invest into GIFs as responsible leveraging. Some benefits include:

• Interest payments only
• Interest on loans as low as prime
• No margin calls
• No collateral required (money invested is collateral itself)
• GIFs provide maturity and death guarantees

These protective features are only available through an insurance company.

 

 

Disclosure: The above case studies are illustrations for information purpose only. Illustrations are not contracts and are not guaranteed. Fund values will vary and are not guaranteed. The values illustrated will vary from those shown depending upon actual experience with respect to the assumptions made in preparation of this illustration including the amount and timing of contributions, fund returns, loan interest rates, tax deductibility of loan interest payments, taxable fund income allocations, and income tax requirements. Contact us for specific details.