RRSPs Improve Life Now and Later
It’s also great in a few months when you get a tax refund.
But it’s best when, after years of socking it away at a competitive interest rate, you can count on your RRSP to supplement your retirement and open up more choices.
Being financially smart today reduces stress, improves family relationships and gives you more confidence, which can turn into even more opportunities. Striking the balance between wants, needs and future needs is a challenge for everyone. But planning, and living within your means, is worth it.
An RRSP is a strong financial choice because you earn interest on the money you invest and it reduces your taxable income.
Here’s how it works:
Say you make $40,000 per year and all year long, you pay tax on that $40,000. If, in that year, you manage to put $5,000 into an RRSP, you reduce your taxable income by $5,000. So you at the end of the year, you are taxed on $35,000.
For most people, this will generate a tax refund.
Your $5,000 is now in your account and earning interest, and your tax refund can be used for whatever you want, including putting it into next year’s RRSP.
The key is combining these two important approaches to retirement — and to life
A recent study by a U.S. financial institution showed that half of its affluent clients wished they had focused more on their life goals, rather than their financial goals. So, it appears that the key is combining these two important approaches to retirement — and to life.
What do you really want to do? Travel, spend more time with your family, volunteer, work for social causes? Remember, your goals must satisfy you throughout your life, not just a few months. Short-term goals such as “play more golf,” or “read more” are important, but it’s important to reach beyond those to discover what will happily take you through 20, 30, or more years of retirement.
Invest in ways that support what’s important to you
Take the time to understand your options. Invest in ways that support what’s important to you. Look at all your choices.
Here comes our sales pitch:
at Fusion, you can get competitive interest rates, and while your money grows for you, it stays here to support people and businesses in our communities.
Investing in an RRSP is an investment in your financial wellness. Whether it’s a big annual commitment or setting a smaller amount aside regularly, RRSPs pay personal and financial dividends now and in the future.