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StateFarm Canada is now Desjardins Insurance

State Farm® Canada is now Desjardins Insurance and your local State Farm Agent will now be known as your Desjardins Agent.

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Build retirement savings this year

Build retirement savings this year

With the hustle and bustle of the holidays behind you, January is a good month to take a look at your retirement savings. Are you on track to reach your retirement goals?

If you don’t have a Registered Retirement Savings Plan (RRSP) or a Tax-Free Savings Account (TFSA), or haven’t thought about your existing accounts recently, it may be time to take another look at these options.

Saving for retirement

The primary benefits of an RRSP are that your money grows tax-free and your contributions are typically tax-deductible. You can choose to direct your RRSP savings to many types of qualified vehicles, giving you a choice about how your money is invested.

Curious how much you can contribute? This is determined by your RRSP deduction limit or “contribution room”. This would be available on line (A) of the RRSP Deduction Limit Statement on your latest Notice of Assessment. In addition, line (B) of this same statement would let you know what carry forward of used RRSP contributions are available.

If you haven’t contributed the maximum in previous years, you can carry over the “contribution room” and add it to the next year’s contribution. Your money can grow in an RRSP until you’re 71. At age 71 you will need to decide on one or a combination of the following:

  • Withdraw the funds
  • Transfer to a Registered Retirement Income Fund (RRIF)
  • Use the funds to purchase an annuity for life
  • Use the funds to purchase an annuity spread over a number of years.

If you decide to use a TFSA, your contributions aren’t deductible. However, any income and withdrawals are generally tax-free. Similar to RRSPs, you can choose where and how to invest the money in a TFSA. You may make withdrawals at any time, and you can keep these accounts open indefinitely.

TFSA contributions are based on a calendar year and you may contribute any time. And if you don’t make the maximum contribution in one year, you can carry that amount over and apply it to the next year’s contribution.

RRSPs and TFSAs have many differences. If you choose one over the other, make sure you understand these differences and make your decision based on your own financial and tax situation.

To learn more about retirement savings options, contact your Desjardins Mutual Funds Representative.

Mutual Funds are not insurance products and are distributed through representatives of Desjardins Financial Security Investments Inc.

Please read the applicable Fund Facts before investing. Commissions, trailing commissions, management fees and expenses may be associated with mutual fund investments.

Mutual Funds are not guaranteed, their values change frequently and past performance may not be repeated. Mutual fund securities are not covered by the Canada Deposit Insurance Corporation or by any other government deposit insurer.

Neither Desjardins Insurance nor its agents provide tax or legal advice. Please consult your tax, legal or investment advisor regarding your specific circumstances.

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