Our philosophical approach and values lead us to believe in the concept of Professionally Managed Money. Mutual Funds, in our opinion, are the best way for most people to achieve financial security, while managing risk.
A mutual fund offers the ability for like-minded investors to mutually invest in a vehicle that provides the day-to-day management of a fund or portfolio in a common mandate.
Mutual Fund Managers are experienced, specialized, knowledgeable and connected to other Fund or Portfolio Managers around the globe to make the investment decisions for us.
GIC'S AND CASH ACCOUNTS
In the case where clients need to hold cash, we can help you find the right product. Through our relationships, we can find a solution to match your objective.
GIC’s are short duration (6 month-5 year) Term Deposits, that pay varying degrees of interest, tied to the time you need to match your goals. These are not totally liquid, so you can be assured, our Team will help you to decide your term, rate of interest and need for liquidity.
Also, every Nominee account held at Worldsource, comes with a Cash Account inside their plan (TFSA, RRSP, RRIF, RESP, RDSP, etc) that pays a small rate of interest to allow clients to retain cash within their plan and still be rewarded for the cause.
TAX FREE SAVINGS ACCOUNTS
TFSA Plans were established in 2009 by the Federal Government to allow Canadians that have either maximized their RRSP’s, don’t qualify for an RRSP or don’t have an “Income Tax” issue, to save money for any financial goal and save tax throughout the life of the plan-holder.
The plan comes with an annual contribution limit that can be carried forward to future years and has increased from $5,000/year in 2009 to $6,000/year in 2020. There was a one-time increase to $10,000 in 2015 by the out-going government, that was reduced back to $5,500 in 2016 by the in-coming government. Since 2018, the amount has risen to $6,000/year. The contribution limit increases every four years by the inflation rate, in increments of $500.
In a TFSA, you don’t receive a Tax rebate with your contribution, but you also never pay tax on the growth or when you take funds out of your plan. Proceeds can be transferred directly to spouses on their passing under certain conditions. There are restrictions, so always consult your Financial Advisor before you make decisions regarding your plan.
REGISTERED RETIREMENT SAVINGS PLANS
Still a very popular choice for Canadians to build a Retirement Portfolio and save tax at the same time. An RRSP allows an investor to contribute funds to a variety of securities, based on their income (& Pension Adjustment).
A contribution will reduce your Taxable Income and can either save or reduce your tax bill. Any portion you don’t deduct each year, can be forwarded to future years. This vehicle allows the investor to defer taxes and shelter the growth until they redeem assets from their plan, usually when they are in a lower tax bracket. The higher your Tax Rate, the more you save on your contribution.
Spousal RRSP’s are a great way to build retirement capital in the name of a lower-income spouse, with the higher-income earner receiving the tax deduction on their income tax form, based on their contribution room. This strategy also works well if one Spouse has a Pension and the other does not. There are other restrictions, so a conversation with your Advisor is recommended.
If an investor does not have a tax-issue, a Tax Free Savings Account (TFSA) may be an alternative, to save for retirement, or any other goal. Either a Personal or Spousal RRSP must be converted to an income plan (RRIF, Annuity, etc) by the end of the year the investor turns 71. The income must start in the next calendar year. There are also other benefits that require a conversation with your Advisor.
REGISTERED RETIREMENT INCOME FUNDS
Once a client turns 71, they must convert their registered plans to an Income plan and pay tax on the amount of income received annually.
The income of the plan value is calculated annually, by a rising percentage as the client ages. There is also a corresponding Spousal RRIF for clients with a Spousal RRSP.
Like all plans, a discussion with your Advisor will help you to understand your RRIF choices, benefits and risks.
Registered Education Savings Plans offer a government sponsored, tax-saving plan to prepare students financially for advanced education.
Inside these plans, there is an annual maximum contribution limit with a matching contribution from the Government through Grants and Bonds, based on the contribution amount.
There are lifetime limits and carry-over provisions, along with conversion features provided if the child(ren) don’t go on to post-secondary education the plans cover. Talk to your Advisor for details.
REGISTERED DISABILITY SAVINGS PLANS
Registered Disability Savings Plans offer government subsidized savings plans for PWD (People With Disabilities).
The plan holder must qualify for the plan by three simple factors…1) be a Canadian Citizen, 2) hold a valid SIN number and 3) Qualify for the Disability Tax Credit (DTC) based on their Disability and age. In this plan, the government offers matching Grants (& Bonds) based on the contribution by the plan holder.
These grants can be significant and will compound over time to make funds available to Canadians that may not be able to save otherwise for Retirement. Again, there are restrictions and age factors, so always speak with your Advisor.