For most people, financial planning feels like a foreign language. They have no idea how to plan for retirement or to safeguard their financial future. Most even struggle to manage their monthly income, so thinking about retirement or the future of their dependents may be the last thing on their minds. If this sounds familiar, there’s no need to worry. Millions around Canada are going through the same struggle as you. But the difference is that most seek help. They seek advice with their retirement, insurance, and saving up for their kids. Here are three crucial aspects of financial planning you should know.
RRSPs: Who do I turn to for RRSPs?
Are you looking for a suitable RRSP investment program? We get this sort of inquiries regularly on our Facebook Page. Retirement Saving Plan (RRSP) represents a large percentage of retirement income for most Canadians. For those who don’t know, RRSP is just like a box where you put all your investments in one account.
Many RRSPs allow you to hold various investment options, including bonds, ETFs, stocks, gold, mutual funds, and others.
However, given that most people know very little about investing. It becomes complicated to determine the best ways to invest their retirement savings in safeguarding their financial future.
While there are lots of ads flying around about the best RRSPs, there are three factors you have to consider when choosing a retirement investment plan.
- Your investment strategy: are you an active or a passive investor? Do you have a ‘hands on’ investing experience? You are an active investor if you have the expertise, time, and enjoy the investing game.
- Timeframe: how far away are you from needing the funds? This will determine how aggressive your investment will be.
- Your risk tolerance level: How much risk can you take? If you hate risk, then consider more conservative investments like mutual funds.
Answering these three questions will take you one step towards determining the best RRSPs account and investment strategy.
Life insurance: Who do I turn to for Life Insurance?
Just like RRSPs, life insurance is another critical aspect of financial planning. Whatever your age or health history, it’s essential to be able to safeguard the financial security of your loved ones. Life’s inevitable changes make life insurance a vital asset.
However, you shouldn’t just pick up any insurance policy. You have to figure out an ideal term and how much coverage you need. The number of dependents you have, your debt status, and your lifestyle will determine your coverage. You should also decide on a suitable type of policy. Whether you need full coverage, term coverage, or variable coverage -all these will affect the amount of premium you pay.
To make well-informed decisions, it will be helpful to talk to an advisor.
Registered Education Savings Plan (RESPs)
What are RESPs?
RESP is a program that allows you to save for the education of your child. It’s a unique savings account that helps you save for your kid’s post-secondary education.
Cool right? Well, that’s not all. With an RESP, you can be eligible for financial assistance through the Canada Learning Bond (CLB) and the Canada Savings Grant (CESG) programs.
Additionally, income from investment on RESP is not taxed. You can open an account for your child or family member under 21.
RESP, however, differs in terms of structures and restrictions. You have to consider the fees, payment structure, refund policy, transfer of RESP from one child to another, and others.
Savings for retirement, buying a life insurance policy, and an RESP account for your kids are all a step in the right direction. However, they will only give you fulfillment when done right.
To make the right choices, you have to seek help. Feel free to contact us today for financial advice or visit our Facebook Page.
