Article provided by: Money Walk
The pension plans issued by the Canadian government are a great safety net. They are not enough to live on comfortably in retirement. You must have other options. Contact Money Walk today and get started finding the best pension plans in Calgary,.
Why do I need more than one pension plan?
The pension plan offered by Canada is a terrific benefit compared to what other countries receive. Your payout depends on multiple factors, but you can earn as much as 25% of what your working income was. While that is more generous than other places, 25% of your previous salary is not going to get the job done.
Currently, only 40% of Canadians get pension plans from their employers. Most of that, 40% are public sector employees. The other 60% need to find their own options. Luckily, there are private plans individuals can buy into.
Facts on private pension plans
Various financial institutions and financial planners can assist an individual in finding a private pension plan. Those plans are called Registered Retirement Savings Plans (RRSP). Those plans allow an individual to contribute up to 18% of their income into a retirement account. Your contributions to your RRSP are tax-deductible, and you can make contributions up to age 71. You can only take advantage of an RRSP if you do not get a pension from your employer.
When you retire, the government provides modest streams of income. Everyone qualifies for the Canadian Pension Plan, which provides a retiree with up to 25% of their working income. Unless you can live off 25% of your current income, you need a private pension plan. Financial planners and money managers can aid you in finding pension plans in Calgary,.
Types of RRSP
There is more than one type of private pension plan. You can pick the one that best meets your needs.
- Individual RRSP-the individual is the only person on the account and the only one making contributions to the account
- Group RRSP-an individual decides the amount they contribute, and their employer arranges the payroll deductions
- Spousal RRSP-if, your spouse, is a higher earner, they can create an RRSP for their spouse and contribute to it
- Pooled RRSP-plans used by small business and self-employed individuals
Having more than one style should cover all persons needing plans. Talk with your financial planner about what is right for you or your business.
Taking a withdrawal from your RSPP
Once you cross retirement age, withdrawals can occur without penalty from your account. Prior to that age, you can take money from your account, but there is a tax penalty. You must include the amount that you withdrew as income on your taxes when you file at the end of the year. The exceptions to this are the Home Buyers Plan and the Life Long Learning Plan
Don’t wait any longer to get started on retirement. Contact Money Walk today and get set up with the best pension plans in Calgary.