Protecting the financial well being of your family can also help you achieve the retirement lifestyle you deserve
We generally think of RRSPs and Pensions when we think about retirement. Many of us will rely on these types of plans along with government sponsored pensions, such as the Canada Pension Plan and Old Age Security, as our main sources of retirement income.
The Problem: Taxation
The biggest retirement income challenge with RRSPs, Pensions, Government Pensions and LIRAs (pensions transferred from a former employer) is that all of the income withdrawn from these types of registered plans has yet to be taxed. As such, income received in a retiree’s hands is fully taxable.
TFSAs Have Doubled in Power: How to Capitalize in Your Own Portfolio
Once formally passed into law, the annual TFSA contribution limit will now increase to $10,000 per person.
What does this mean for you?
By 2016, a couple will have the ability to contribute a combined $100,000. Double that to $200,000 per family if you have 2 children age 18 or older whom are still relying on you financially…and frankly, which Millennials aren’t!?!
If you are a successful Baby Boomer, when it comes to your retirement plans, you are probably asking yourself:
Will I have enough money to retire, when I want, the way I want?
But, what you should really be asking yourself first is:
Now that most Canadians and their advisers have gotten the message across about the rising power of tax-free savings accounts (TFSAs), some are beginning to question whether RRSPs are even relevant anymore.
However, there is no ‘one size fits all’ retirement plan. Plans should vary depending on a number of factors including, your age, lifestyle, debts, etc.