TFSA & RRSP: Don’t Screw Yourself Out Of Retirement | By Michelle Levesque

January 16, 2019

As a parent it is very common to put yourself last. How many times have you heard “you can’t take care of others if you don’t take care of yourself”? But what about your financial health?

There are always many reasons to not start saving. Before you know it, you are 50 years old, the children are educated, mortgage is paid down, and you are ready to start saving. But by then you have missed out on 20 some years of saving and compound growth. The numbers don’t add up and it’s impossible to retire.

When I sit with clients we work out a budget to see what is affordable based on income and expenses. I then advise clients on which investment registration will serve them best tax wise. The majority of people I meet with do not understand why their money is registered because they have never been educated or had an individual plan built for their needs. This can have a major impact on the tax you owe now and during retirement.

The government offers two options for registering your money: RRSP or TFSA

1. RRSP (Registered Retirement Savings Plan)

The government gives you a tax break for contributing to an RRSP. Example: if you make $50,000 yearly and put $10,000 in an RRSP your taxable income is now $40,000…so you don’t have to pay as much tax.

RRSPs are not necessarily a good fit for everyone. You may lose money to taxes contributing to an RRSP if you earn more later in life than you did when you put money in. If you have a good employer pension RRSPs may not be advisable. RRSPs are best suited for those who owe the government at income tax time.

2. TFSA (Tax Free Savings Account)

The government has given us all the opportunity to make tax free growth in our investments. Take advantage! Example: if you have $10,000 in a TFSA and it grows to $12,000…that’s $2000 of income you never have to pay tax on!

Many people I meet with have TFSA’s set up, but they aren’t invested properly. If the government is allowing us tax free growth make sure it is growing!

My job is to take the guesswork away from clients. It can have a huge impact on what you keep during retirement versus how much the government gets.

I would love to hear from you! Check out my Facebook page and feel free to send a message!

Michelle

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I have been guiding individuals and business owners financially for 11 years now. I chose to represent Front Gate Financial Group, a local brokerage, which offers every bank and insurance company. I do not believe in being biased or product pushing for one particular company since all companies can have competitive products at any given time. I review each individual’s entire financial circumstance, educate, then shop the market for the best in all areas. You deal with one person you trust and know you have the best in all areas.

I have built my business always making myself available at clients’ convenience, whether going to a home at 8pm after children are settled or bringing a coffee to a contractor on a job site. My favorite part of being a Financial Advisor is educating and empowering people financially. There’s nothing better than having a new client tell me they are no longer overwhelmed and confused by their finances and are excited by the game plan we have put in place to budget, pay down debts, protect their family, and reach their goal of retiring comfortably.

Over the years I have been asked to give Financial education presentations at numerous groups and events including: Fredericton Area Women’s Business Network, International Women’s Day, Mom Talk NB, the Oromocto Chamber of Commerce, Fredericton Regional Family Resource Centre, Military Family Resource Centre, Wedding Shows, Facebook groups. I am currently the Financial Pro for Mom Talk NB providing monthly articles and live discussions.

I am married and have a little fur baby. I enjoy travelling with my husband, acrylic painting, scuba diving, snowboarding, yoga, walking my pup. Quality time with family and friends is everything!

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