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Saving & Planning

When it comes to saving for retirement, a Registered Retirement Savings Plan (RRSP) is a popular choice for most Canadians. A Tax-Free Savings Account (TFSA) can also be used to save for retirement, but it gives you the flexibility to save for short-term goals, too.

Here are a few ways the RRSP and TFSA stack up:

  • Your savings in an RRSP grow tax-deferred while your savings in a TFSA grow tax-free.
  • RRSP contributions are tax-deductible, helping you to pay less tax in your earning years. TFSA contributions are not tax-deductible.
  • You have to earn an income to put money in an RRSP. With a TFSA, you can contribute even if you aren’t working and earning.
  • You can’t keep saving in your RRSP after age 71—a TFSA lets you make contributions for life.
  • Withdrawals from a TFSA are never taxed. Withdrawals from an RRSP are taxed the year you withdraw the money.

To compare more features and benefits, see TFSA vs RRSP vs eSavings

Avoiding emotional investing, following proven principles and adjusting your plan for the right reasons can help you reach your goals.

  • Negative headlines and market volatility can make it tempting to change a well-designed investment plan. While selling off your portfolio may make you feel better, this decision could mean lost opportunity and not achieving your long-term investment goals.
  • Stay on track with these five principles of successful investing:
    • Invest early
    • Invest regularly
    • Invest enough
    • Diversify
    • Have a plan

    Explore These Principles

  • Adjust Your Plan as Needed

    Your investment plan should be dynamic, not static. Here are three “levers” that can be adjusted over the years to meet your changing needs.

    • - Lever 1: How Much You Invest
      Concerned about not having enough money to meet your goals? Consider adjusting how much you contribute on a regular basis. Even a small increase can have a significant impact long-term.
    • - Lever 2: How Long You Invest
      You can extend or shorten your investing time horizon based on your needs. For example, postpone retirement or re-enter the workforce if you want more time to build your wealth.
    • - Lever 3: How Much Risk You Have
      This lever should be shifted carefully as your risk profile is core to your investment plan. The best way to do this is to review your portfolio regularly with your RBC Financial Planner.

The opportunity to reach your retirement goal faster! With a regular, pre-authorized contribution plan, you can save automatically without even thinking about it.

  • You don’t need much to get started (as little as $25 per week)
  • Set one up for your Registered Retirement Savings Plan (RRSP), Tax-Free Savings Account (TFSA) or other registered account
  • Contribute weekly, bi-weekly, monthly—you choose
  • Contributions are automatically debited from your RBC chequing or savings account
  • Invest in mutual funds, GICs and saving deposits

Try the RRSP calculator now to see how putting money regularly in an RRSP can grow your retirement savings.

Ready to invest? Get started now.

Your retirement will be as unique as you are. Travel, sports, hobbies … no one will combine these and other activities the same way you will. Your retirement plan should be just as unique.

After all, no one has the exact same retirement benefit plans, tax considerations and priorities as you. That’s why you need a personalized approach to provide steady income when your regular paycheque stops.

Working with an RBC Financial Planner is one of the easiest ways to get started with your retirement plan. In addition, you can use resources like the ones below to help guide your conversation:

First of all, know that you’re not alone. Many people approaching retirement do not feel prepared or know how much money they need to retire comfortably. Even if you've been saving for years, it's only natural to wonder if you’ll have enough to enjoy the retirement you want.

A great resource that can help you is MyAdvisor at RBC. MyAdvisor is a secure, one-of-a-kind online service that combines interactive planning tools and advice from a live advisor to help you be better prepared for retirement. It’s exclusive to RBC, easy to use and available to you at no extra cost!

Read more about MyAdvisor.

MyAdvisor is a secure, one-of-a-kind online service that combines interactive planning tools and advice from a live advisor to help you be better prepared for retirement. It’s exclusive to RBC clients, easy to use and available to you at no extra cost.

  • See what you have with more certainty. MyAdvisor show’s you how you’re doing with powerful visuals and forecasts of your goals, net worth and cash flow.
  • Link outside accounts for a complete picture. Have savings and investments outside of RBC? MyAdvisor lets you quickly link them for an up-to-date look at your money.
  • Receive personalized advice. Meet with a live advisor through video chat, by phone or in person to review your retirement plan, talk strategy or to simply ask a question.
  • Make changes to your retirement savings plan at any time. Want to see a recommendation from your advisor or make a change to your plan? Simply log in to your MyAdvisor dashboard.
  • Stay on track toward your goal with email alerts. Progress alerts let you know whether you need to adjust the amount you are saving in order to reach your retirement goal.
  • Get started in a few simple, hassle-free steps. In minutes, you’ll have an idea of where you stand, see recommendations to help you grow your savings, and be able to book a one-on-one with an advisor.

Read more about MyAdvisor.

Most retirement publications tend to assume a reader is part of a couple—or plans to get married one day. If you’re a single woman planning for retirement, the right advice can be harder to find. Here’s an overview of some challenges you are likely to face and how you can overcome them:

  • Saving enough money for retirement: Since you don’t have the economic benefit of a second person’s income to help fund your retirement savings, it’s especially important that you are saving every dollar you can and taking advantage of tax-smart plans and strategies. A great resource is an RBC Financial Planner, who can show you how to make the most of your savings and investments.
  • Plan ahead for the long-term: According to Statistics Canada, in 2017, the life expectancy for Canadians was projected to be 79 years for men and 83 years for women. Because women tend to live longer, you may want to plan for extra years in retirement and take steps now to make sure your retirement income will last as long as you need it to. An RBC Financial Planner can help you create a comprehensive financial plan that addresses longevity and other key risks in retirement.
  • Planning for your future healthcare: As a single person, it’s very important to plan now for future healthcare needs in retirement, including a long-term care type of situation. Setting up critical illness and/or disability insurance (if you are still working) will help protect you financially in the event of a serious illness or injury. Long-term care insurance can also help protect you if you require in-home care down the road or need to move into a retirement residence or nursing home. An RBC Insurance Advisor can help answer your insurance questions. See Planning for Health Changes in Retirement.

  • Your housing options for retirement: Do you want to live on your own or perhaps become a snowbird when you retire? Make sure your retirement savings will support that lifestyle. Or, will you need to consider co-housing or shared living arrangements if you’re concerned about having enough money? An RBC Financial Planner can help you estimate the budget you’ll need to enjoy the lifestyle you want and suggest adjustments to your retirement plan as needed.

A Tax-Free Savings Account (TFSA) is a great way to invest for tax-free income when you're no longer able to save in a Registered Retirement Savings Plan (RRSP).

  • You don't need to earn any income to contribute and you don't have to stop adding to it at a certain age.
  • Unlike RRIF withdrawals, TFSA withdrawals are tax-free. If you have non-registered accounts, you may be able to move some of these funds into a TFSA and reduce your taxable income (however, there may be tax consequences – for more information about those, you can speak with a qualified tax advisor).
  • Income you earn in your TFSA and withdrawals from it do not affect your eligibility for government benefits, including Old Age Security and the Guaranteed Income Supplement, or tax credits such as the Age Credit.

Taxes are an important part of income planning in retirement. That’s because you may be getting more of your income from personal savings and distributions from your investments, which can be taxed at different rates. This can have a big impact on the after-tax dollars that you have to spend in retirement.

The chart below shows the after-tax cash flow from different kinds of distributions.

It's not what you earn - it's what you keep. For every $1,000 in annual pre-tax cash flow, how much is left after tax? Interest: $650. Capital Gains: $825. Canadian Dividends: $862. Return of Capital: $1,000. Based on an investor with a 35% marginal tax rate. Note: Return of capital distributions are not taxable in the year they are received, but do lower your adjusted cost base, which could lead to a higher capital gain or smaller capital loss when the investment is eventually sold.

With careful planning, you may be able to reduce or delay paying tax on income from your personal savings. Ask an RBC Financial Planner to create a retirement income plan that gives you the income you need in the most tax-efficient way possible.