Taxes & RRSPs

February 2018

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P4 THURSDAY, FEBRUARY 1, 2018 SPECIAL SECTION & TAXES RRSPS D O W N P A Y M E N T F A M I L Y V A C A T I O N R E T I RE M E N T 5 Y E A R R R S P 3. 0 %* 1 Y E A R R R S P 2 Y E A R R R S P 3 Y E A R R R S P 4 Y E A R 2.30 % * 2.50 %* 2.65 %* 2. 80 %* CAM 21545 WFP Guide-FIN.indd 1 2018-01-10 3:23 PM 0 R R S P T hat would make sense to David MacRae, Investment Services Manager at Cambrian Credit Union, but the truth is, there are many Canadians that put very little time into planning the biggest vacation of their lives — their retirement. He and the team at Cambrian are hoping to change that this RRSP season but they realize there's no magic bullet. Instead of copying many tactics of the past, they've opted to take a softer approach instead. Cambrian has a retirement survey on its website that takes respondents down two tracks depending on their responses — either the accumulation phase or actual retirement phase. Cambrian also sent out emails to its members encouraging them to go through it. After finishing the survey, each member was entered into a draw to win one of five $100 prizes. If you thought that wasn't a big enough carrot to convince people, think again. "On the first day, we had more than 4,000 responses," he said. "We're not reinventing the wheel. We're still going to encourage people and let them know March 1 is the (RRSP contribution) deadline. Our messaging this season is along the lines of 'do you know what your current savings will mean to you at retirement, and whether your current strategy will get you where you need to be' and 'if you are already retired, will you stay comfortably retired?'" he said. At the end of the survey, Cambrian included an option to have one of its investment professionals follow up with them. More than 200 people asked for the follow-up on the first day, too. "We were very pleased with the uptake and positive response," he said. Cambrian has also partnered with a software company and have added an easy to use retirement calculator on its website ( — a three-minute exercise that gives members a quick snapshot of whether they're on the right road. If you're off track, it also provides an interactive feature of changing a few variables to see if that can get you back on plan. The calculator also asked members if they'd like some follow-up from a Cambrian investment professional. "We're trying to get people to go through this on their own and self-identify a need to sit down with one of our retirement planning professionals. 'Yeah, it's important to book my next trip to Mexico but maybe I should also talk to somebody about my overall retirement planning as well,'" MacRae said. Cambrian is the third largest credit union in the province with more than $3.4 billion in assets under management. The annual RRSP deadline is at the end of the 60th day of the year. MacRae said there's no question investors have made saving towards their retirement an easier process in recent years by setting up monthly contributions rather than rushing in at the deadline to make a one-time larger lump sum contribution. Our focus with Cambrian members is to ensure that they understand the strategy required to enjoy a comfortable retirement, which includes contributing to their RRSP. "We want to simplify the complexities of the retirement planning process; save our members' time in leveraging our expertise; and provide solutions and strategy unique to their overall aspect," said MacRae. GET ON TRACK WITH RETIREMENT PLAN BY GEOFF KIRBYSON If you spend a month or two researching your two-week winter vacation, how much time would you dedicate to planning a 25-year holiday? A year? Maybe three or four? There are many options when it comes to saving, so it's important to build a saving strategy that works for you — now and in your future. In addition, your savings plan should evolve over time to account for your changing income and financial needs. Saving with SCU means you'll receive expert advice, along with some of the highest interest rates in the Manitoba market. Learn more about the benefits of savings with SCU, and get started today, by visiting WHAT ARE THE DIFFERENCES BETWEEN TFSAs & RRSPs? An RRSP is a long-term savings option that provides you a steady income after retirement. In an RRSP, your contributions and the interest earned are tax-sheltered until withdrawn. Often, you can contribute pre-tax dollars to your RRSP, meaning you lessen your tax burden now and defer taxation on your RRSP until retirement, a time when your annual income is typically less. A TFSA is also great for retirement saving and growing your wealth, and offers you the flexibility to withdraw funds to use when and how you need them. All investment growth within a TFSA is tax free, so you won't be taxed when you withdraw, regardless of how much your investment has grown over time. PLANNING FOR YOUR RETIREMENT MAXIMIZE YOUR TFSAs & RRSPs Trying to decide between a TFSA or an RRSP? You don't have to choose! Depending on your goals, saving in both your TFSA and RRSP is a smart solution, allowing you to live life now and save for your future. Contributing your Canada Revenue Agency (CRA) maximum to each will ensure you take full advantage of the short- and long-term tax benefits, and have the flexibility to withdraw funds from your TFSA should the need arise. L I V E L I F E A N D S AV E F O R I T $ 8 9 9 7 Enjoy today. We'll help you save for tomorrow. Start saving today with SCU. Whether it's purchasing a new property or taking that dream vacation, we can help. Set up pre-authorized debits towards a high interest savings account at SCU. It's a fast and easy way to save more towards your goals. To open an account with SCU and start saving, visit us in branch or learn more at 1575 Lagimodiere Blvd | 204.661.1575 2100 McGillivray Blvd | 204.222.2100 333 Main St., Steinbach | 204.326.3495

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