This is from a guy that is interested in doing more financial writing, so he wanted me to post his material. I got no problem with it, so let me know what you think.
Canadian retirement planning options you must know
Retirement planning is a major financial task that most Canadians have to undertake.
Around 49% of the Canadian work force retires before they turn 60. Therefore, it is imperative to start retirement planning early in your life. The main aim of a retirement plan is to offer a regular source of income during your retirement years. Thereby, you don’t have to depend on your children financially. You can retain your self-respect and independence in the retirement years. Go through this article to know about various retirement plans available in Canada.
Canadian retirement planning options
Here are some of the Canadian retirement planning options that you must know:
1. Registered retirement savings plans: Most of the Canadians opt for this retirement plan. This plan permits you to save money in the RRSP account for your retirement years by making tax deductible contributions. However, you should remember that you have to pay tax on withdrawing money from the RRSP account.
2. Registered retirement income fund: This plan is quite similar to that of RRSP. The only difference is that you are required to take out a minimum tax-payable amount every year, according to your age. The remaining amount of money in the account becomes tax-free.
3. Registered pension plans: This is one of the most popular Canadian retirement plans. This is basically an employer-sponsored retirement savings plan. This plan offers a regular source of income to the employees of a company after retirement. However, in order to take advantage of this plan, both employees and employers are required to contribute to the plan.
4. Locked-in retirement account: If you have decided to leave your present company and to take out your retirement funds out of the company, then you have to transfer the funds into a locked-in RRSP, also known as locked-in retirement account or LIRA. As the name suggests, you can access the fund only after retirement.
5. Life income fund: This plan is just like a RRIF (registered retirement income fund), meaning you have to take out a certain amount of money each year. However, there is an annual limit on the amount of money you can withdraw. The amount of money that you can withdraw from this account depends your age and interest rates. The remaining amount stays locked so as to make certain that the fund is utilized for retirement purpose only. However, in case of emergency situations, certain provincial legislations permit you to withdraw a certain amount of money. You can set up a LIF account only when you are 55 years old.
Finally, you should choose a retirement plan according to your suitability. You should analyze the features of each Canadian retirement plan in order to determine which one will suit you best.
Retirement planning is a major financial task that most Canadians have to undertake.
Around 49% of the Canadian work force retires before they turn 60. Therefore, it is imperative to start retirement planning early in your life. The main aim of a retirement plan is to offer a regular source of income during your retirement years. Thereby, you don’t have to depend on your children financially. You can retain your self-respect and independence in the retirement years. Go through this article to know about various retirement plans available in Canada.
Canadian retirement planning options
Here are some of the Canadian retirement planning options that you must know:
1. Registered retirement savings plans: Most of the Canadians opt for this retirement plan. This plan permits you to save money in the RRSP account for your retirement years by making tax deductible contributions. However, you should remember that you have to pay tax on withdrawing money from the RRSP account.
2. Registered retirement income fund: This plan is quite similar to that of RRSP. The only difference is that you are required to take out a minimum tax-payable amount every year, according to your age. The remaining amount of money in the account becomes tax-free.
3. Registered pension plans: This is one of the most popular Canadian retirement plans. This is basically an employer-sponsored retirement savings plan. This plan offers a regular source of income to the employees of a company after retirement. However, in order to take advantage of this plan, both employees and employers are required to contribute to the plan.
4. Locked-in retirement account: If you have decided to leave your present company and to take out your retirement funds out of the company, then you have to transfer the funds into a locked-in RRSP, also known as locked-in retirement account or LIRA. As the name suggests, you can access the fund only after retirement.
5. Life income fund: This plan is just like a RRIF (registered retirement income fund), meaning you have to take out a certain amount of money each year. However, there is an annual limit on the amount of money you can withdraw. The amount of money that you can withdraw from this account depends your age and interest rates. The remaining amount stays locked so as to make certain that the fund is utilized for retirement purpose only. However, in case of emergency situations, certain provincial legislations permit you to withdraw a certain amount of money. You can set up a LIF account only when you are 55 years old.
Finally, you should choose a retirement plan according to your suitability. You should analyze the features of each Canadian retirement plan in order to determine which one will suit you best.
Hope you enjoyed the guest post! He wanted to remain anonymous.
