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What's New |
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Quote
of the Month
"The pessimist sees difficulty in every opportunity. The
optimist sees opportunity in every difficulty".
(Winston Churchill)
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Our Best GIC Rate as of
January 4, 2011
is
3.15%
(rates subject to change without notice) |
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Visit
our website to find handy
Financial
Calculators
click
here!
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 Your Money
Matters
January
2011 Issue
RRSP loans are not for everyone. But in some cases, they can help
you reach your retirement goals sooner
RRSP
catch-up loans can be a valuable tool to help those who have not
maximized their RRSP contributions due to other priorities, such as
education needs for one, and as a result, have accumulated RRSP
contribution room over the years.
If you have not been maximizing your RRSP contributions, chances are
that your retirement plan needs a boost to achieve that all
important milestone.
RRSP loans are available through the major banks, as well as through
financial services institutions that serve the advisor channel, such
as MRS Trust Co. (a division of Mackenzie Financial Corp. of
Toronto, Manulife Bank, which is owned by Toronto-based Manulife
Financial Corp, B2B Trust, a subsidiary of Laurentian Bank of Canada
in Montreal, and AGF Trust Co. which is owned by Toronto based AGF
Management Ltd.
Most loan providers offer two categories of RRSP loans. One year
loans are designed to boost your contribution for that particular
year. Longer-term loans are geared toward investors who have built
up a significant amount of carry-forward room over a number of
years.
Most offer both variable and fixed rate options. The variable rate
can range from prime to prime plus 1% or more, and the fixed rate
can be set for 1 to 5 years at the going interest rate. Most also
offer deferred payments of 2 to 6 months, giving you time to receive
the tax break first and then pay down your loan.
RRSP loans can save money on taxes or improve your investment
opportunities by doing something more immediate rather than slowly
over time. However, they aren’t for everyone. If your cash flow is
already tight, we would recommend you pass on taking out an RRSP
loan, because the monthly payments could become difficult to manage.
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Interest expenses on money borrowed to contribute to RRSPs
is not deductible for tax purposes. Borrowing to invest
may be appropriate only for investors with higher risk
tolerance. You should be fully aware of the risks and benefits
associated with investment loans since losses as well as gains
may be magnified. The value of your investment will vary and is
not guaranteed, however, you must meet your loan and income tax
obligations and repay your loan in full. Tax refunds may
vary according to your marginal tax rate. |
Theresa Wever and the Money
Concepts Team.
Commissions, trailing commissions, management fee and expenses all
may be associated with mutual fund investments. Please read the
prospectus before investing. Mutual funds are not guaranteed,
their values change frequently and past performance may not be
repeated. |
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Russell Location |
Vankleek Hill
Location |
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1087 Concession Street, P.O. Box
269
Russell ON K4R 1E1
Tel: (613) 445-8624 |
116 Main Street
East, P.O. Box 459
Vankleek Hill, ON K0B 1R0
Tel: (613) 678-3861 |
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Toll-Free:
1-800-250-5557 |
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