Registered Savings Solutions

A registered savings plan is a contract the provides tax benefits to help maximize your savings.

A registered retirement savings plan is designed to save for a worry-free retirement. An RRSP gives you the benefit of a tax deduction today, and tax-sheltered compounded growth for tomorrow. Plus, your RRSP dollars are completely tax sheltered as long as they remain in the plan. Between regular contributions and wise investments, your RRSP can turn into a sizable retirement nest egg.

Who can contribute?

Anyone with earned income subject to Canadian taxation, including non-residents, may contribute to an RRSP. Even if you are not taxable, you should file a tax return to report your earned income and create RRSP deduction room. You can make part or all of any contribution to a plan in your spouse’s or common-law partner’s name. You, as the contributor, are still entitled to the tax deduction. Contributions can be made until the end of the year in which the planholder's 71st birthday occurs.

RRSP Deduction Limits

Your Notice of Assessment from Canada Revenue Agency will state your RRSP deduction limit for the following year. In addition, you can call the Canada Revenue Agency or access your online CRA account to find your contribution limit.

Official Receipt

After your RRSP contribution has been processed by the Credit Union, you will receive an official receipt. This must be filed with your tax return for that year even if you choose not to deduct it until a later year. Financial institutions are required to report all RRSP contributions to CRA. If you do not report the contribution on your tax return for that year, the CRA will contact you.

Investments

A wide variety of investment vehicles are permitted within an RRSP. Click here to learn about several options.

Registered Retirement Income Funds are similar to RRSPs; however, the planholder must withdraw some taxable payments from the RRIF each year. Williams Lake and District Credit Union offers fixed-rate and variable-rate RRIF plans to provide maximum flexibility for your retirement income options. RRSPs must be converted to an RRIF by the end of the year in which the planholder turns 71.

The RRIF is the most popular option for RRSP savings to provide income during retirement. A RRIF offers complete income flexibility, while allowing your savings to remain tax sheltered and under your personal control.

Locked-in Retirement Accounts (LIRA) and Life Income Funds (LIF) are created when investment funds have been locked-in by legislation. Generally these are pension funds that have been transferred away from the employer's pension arrangements. Williams Lake and District Credit Union has a variety of investment options available for LIRA and LIF to help you achieve your retirement dreams.

A Tax Free Savings Account (TFSA) allows Canadians 18 years of age and older to save up to a designated allowable amount each year tax free. TFSA investments can include a wide variety of investment vehicles.

The Features
  • Contributions are not tax deductible
  • Capital gains and other investment income will not be taxed
  • Withdrawals can be made at any time, tax free
  • Neither income earned in an account nor withdrawals will affect eligibility for federal income tested benefits or credits
  • Any amounts withdrawn will be added back to the individual's contribution room for the following year

The Benefits
Interest and investment income earned in a TFSA (including capital gains) is not taxed on withdrawal and there are no restrictions on how the money can be spent. Funds can be withdrawn without penalty at any time, unless restricted by the terms of a specific investment vehicle. When money is withdrawn from a TFSA, the contribution room is added back to the holder's unused contribution room the following year.

Contribution Limits
Contribution limits are set by the Canada Revenue Agency annually. Details on current and historical contribution limits can be located here

Over Contributions
If you have multiple TFSA accounts, it's important to keep track of each one so that you don't exceed contribution room in your TFSA. If you over-contribute to your TFSA, you may be subject to a 1% penalty for each month the over-contribution stays in your account. Although this process seems straightforward, withdrawing funds from the TFSA has caused confusion among thousands of Canadians. While funds can be withdrawn from your TFSA at any time without penalty, you cannot simply re-contribute the funds to your account whenever you want. Withdrawn funds are added back to your contribution room the following year when the CRA processes various TFSA records.

An RESP is a savings plan for post-secondary education. Subscribers make deposits into the plan on behalf of a beneficiary for future post-secondary education. This is an ideal way to save for your child's or grandchild's education. An RESP permits savings to grow tax-free until the beneficiary is ready to attend post-secondary studies. When the beneficiary begins to use the RESP for education, the accumulated income becomes taxable; however, because students typically have little other income, he or she may pay little or no tax on RESP income.

Canada Education Savings Grant (CESG)

The federal government awards 20% of the first $2,500 in RESP contributions up to a maximum of $500 per year, per beneficiary, in the form of a Canada Education Savings Grant (CESG). This grant carries a lifetime limit of $7,200.

The federal government will also pay an additional CESG for each qualifying beneficiary. The beneficiary's primary care giver must be receiving the Canada Child Tax Benefit and the amount of the grant is based on the primary care giver's net family income.

Canada Learning Bond (CLB)

For eligible families (based on number of children and household income), the CLB will provide an initial $500 to children born on or after January 1, 2004. Thereafter, the CLB will also pay an additional $100 annually for up to 15 years for each year the family is eligible.

BC Training and Education Savings Grant (BCTESG)

The BCTESG provides a one-time contribution of $1,200 to eligible children. Both the child and his or her parent or guardian must be residents of BC to qualify. Parents or guardians can apply on the child's 6th birthday and must have applied no later than the child's 9th birthday in order to receive the grant.


Need more info?

Call or pop into your branch and speak with one of our Investment Specialists.

An RDSP allows individuals living with a disability and their caregivers to save money in a tax-sheltered plan, while also providing the opportunity to qualify for government grants.

Need more info?

Call or pop into your branch and speak with one of our Investment Specialists.

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