When should you start saving for retirement? How much should you put away to ensure a comfortable lifestyle? Where should you invest your hard earned money? Many Canadians don’t start saving for retirement until age thirty five. Some Canadians chose to ignore retirement planning and end up with a savings shortage in retirement. If someone wants to save $500,000 for retirement at age 65, how much do you have to save while earning a 7% return? The following table illustrates how much you would have to save per month based on the age you start saving for your retirement plan.

The longer you wait to start saving for your retirement, the more you have to save to reach the goal of your retirement plan. There is a huge jump from age 35 to age 45 in the monthly required savings - $410 per month versus $961 per month. We are not saying that $500,000 is the ideal amount to save for your retirement plan - you may need more or less. $500,000 could generate $25,000 a year in pre-tax cash flow if earning 5% a year. You may need more or less depending on your desired retirement lifestyle. Determine your goals and work toward achieving your retirement planning goals. How is your retirement plan progressing?

Benefits of using RSP’s for your retirement planning:

• Tax deduction: This is a very powerful tax planning tool. When you contribute to your RSP, you receive a tax deduction on your income tax return and this reduces your taxes payable. It is better to pay yourself and invest your money than pay more tax.
• Tax deferral: The income that is earned in the RSP is not taxed until the cash is removed from the RSP. This enables your money to grow more quickly; resulting in you having more money when you retire.
• You can borrow $25,000 from your RSP to purchase a home. However, you have to repay this amount over a 15 year period.
• Contribution room: Check your notice of assessment from filing your income tax return to determine your contribution room. This can be one of the best ways to save for retirement.

Benefits of using TFSA’s for your retirement planning:

• Tax free: You don’t pay income tax on the income earned in the TFSA. Unlike the RSP, you do not receive a tax deduction on your tax return when you contribute to the TFSA. However, you don’t pay tax on the withdrawal from the TFSA.
• No income tax on withdrawals: When you withdraw funds from your TFSA, you do not pay income tax.
• Withdrawals increase contribution room: When you withdraw funds from your Rsp, you can re-contribute the same amount in the future. Be careful to wait until the next year to make your re-contribution.
• Unused contribution room is carried forward: If you don’t contribute in a year, you can carry forward this unused contribution room.
• Versatile: The TFSA can be used as a complement to an Rsp. Once you have maximized your Rsp, utilize the tax sheltering of a TFSA. In addition, when you don’t have an Rsp, It is beneficial to make contributions to a TFSA when you are in a low tax bracket.

The GTA Wealth Advantage and Your Retirement Planning

• Independent: GTA Wealth has an independent financial team. GTA Wealth can access more that 50 investment firms including the banks to service your needs . We will select the investments that best suit your needs without any allegiance to a particular company; as opposed to an employee working for one company. We work for you, not an employer.
• More resources:  GTA Wealth can access investment firms with offices around the globe and more than $1.6 trillion in assets under management (Fidelity Investments); larger than all the assets under management of the Canadian banks.
• Unique investment opportunities: Access to institutional investment managers that have experience managing corporate and government pension funds for more than 40 years. This expertise leads to consistent performance and in some cases, capital preservation. Access to currency neutral options, and the ability to trade in European countries via Jitney that competitors don’t have legal filings to do so.
• Multidisciplinary approach: GTA Wealth can provide multiple financial services that will result in efficiency for the client and superior results. The GTA Wealth financial advisors are able to analyze various facets of your wealth building plan, such as, tax, investments, debt, insurance etc. Why go to a multitude of financial advisors when you can come to one; a financial advisor that is knowledgeable about your entire wealth management plan. Capitalize on the synergy.
• Tax efficiency: Access to corporate class funds and tax efficient systematic withdrawal plans.
• Flexible: The client can set up monthly contributions from his/her bank account. Monthly contributions amounts can be changed at any time.  Systematic withdrawal plans can also be set up for clients that need a consistent cash flow.
• Expertise: GTA Wealth has tax accountants and certified financial advisors / planners to answer all your income tax, retirement planning, insurance and investment planning questions.
• Enhanced reporting: Clients can access their accounts online and receive statements electronically.

The financial advisors at GTA Wealth Management can ensure your retirement plans and dreams do come true. We have helped many happy clients craft their retirement plans and would welcome the opportunity to help you with your retirement planning.

Contact or call the GTA Wealth Management Inc. tax accountants and financial advisors toll free at 1 855 GTA WLTH (855 482 9584) to accelerate your ride to financial independence and security. A professional wealth management financial advisor is ready to serve your retirement planning needs. GTA Wealth Management Inc. has three convenient locations in Mississauga, Toronto and Markham to serve you.

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