Registered Retirement Savings Plans (RRSPs) provide exceptional opportunities to both grow your savings and minimize taxes.
Your Lawyers Financial RRSP is a powerful savings vehicle for a number of reasons:
- Contributions are tax deductible, which means more income for other needs
- Taxes on growth, dividends and interest is deferred until you begin withdrawals
- The LFIP program has very low investment management fees (IMFs), which means more of your money is being invested. Lower IMFs could save you hundreds of thousands of dollars over your lifetime. As a rule of thumb, a 1% decrease in investment fees will result in a 20% increase in your assets by the time you retire. And in retirement, a 1% decrease in investment fees will result in a 20% increase in investment income.
When you withdraw money from your RRSP, it is taxed at your tax rate at the time. If you're like most people, you'll be retired so your tax rate will likely be lower than when you were working and you'll be able to keep more of your hard-earned money.
The Lawyers Financial program also offers locked-in RRSPs (LIRA, LRSP) for monies originating from a pension plan.
And when it comes time to create an income, there are RRIF and LIF options (a LIF is a life income fund, which is simply a locked-in RRIF for monies originating in a pension plan).