Are you using your RRSP & TFSA properly?

Strategic investing for long term returns:

As we step into 2025, it is important to look back at what was accomplished in the year prior. 2024 was a year filled with exuberance. Without succumbing to the fear of missing out on the exuberance of many high-flying stocks which led quite a few portfolio managers astray, ours were able to have a most successful year! More importantly, our portfolio managers adhered to their investment philosophy of purchasing quality companies without overpaying, ensuring that hard-earned dollars are invested prudently for long-term, sustainable, and repeatable gains.

It's not a very exciting investment philosophy, but it works.

RRSP deadline fast approaching:

The RRSP contribution deadline (March 3, 2025) for the 2024 tax year is fast approaching. If you were wanting to make a contribution, please give us a call! The benefits of a well thought out plan for your RRSP could save you thousands of dollars over the long term.

Scenario 1: Saving 18% of $100,000 pretax income in a non-registered taxable account

-          Your average tax rate will be 26.45% leading to you paying $26,450 in tax.

-          This leaves you with $55,550 after tax and investment contributions.

Scenario 2: Saving 18% of $100,000 of pretax income in your RRSP

-          Average tax rate is lowered to 20.96% leading to you paying $20,960 in tax.

-          This leaves you with $61,040 after tax and contributions.

In this example, the difference is a staggering $5,490 left in your pocket all while hitting your investment goals.

Ensure your TFSA is properly invested:

The start of the new year also brought in an additional $7000 of contribution room for your TFSA’s. if you have been eligible to contribute since its inception in 2009, that means you have $102,000 of contribution room.

A common misconception is that your tax-free savings account is simply a “savings account”. Although, it is possible to use it as a savings account, you may be better served to invest those savings using our strong line up of managers who succeed by using an investment philosophy of buying quality companies at attractive prices.

Earning 2% in a high interest savings account over 10 years, will compound to: $124,562

Generating 10% in a diversified portfolio of investments following a conservation growth philosophy, over 10 years, that same investment compounds to: $276,118.

The difference is an additional $151,556 that can be used in combination with RRSP, TFSA and taxable investment accounts to create the most beneficial income streams in retirement.

We look forward to talking to you in the coming weeks.  Maximizing your financial goals is our priority.