Wealth Management

There’s more to building wealth than investing money. You also need to establish a thorough and realistic plan to carry out your projects through the years.


Tax Planning

  1. RRSP and LIRA
  2. TFSA
  3. RESP
  4. RDSP
  5. RRIF / LIF

Taxes are one of life’s certainties, but there are ways to minimize your tax burden, at the time of the initial investment and upon its disbursement.

Imagine having the chance to receive an income without having to pay taxes.

While having to pay taxes is a certainty, there are several investment strategies that can help you minimize your tax burden, whether at the time of the investment or upon its disbursement.

Capital gains and investment income are taxed differently depending on the investment product you use. With good planning, you can ensure you choose investment vehicles that reflect your tax situation so that you can grow your wealth more efficiently.

We will help you analyze your portfolio and identify ways to reduce your tax burden.

For instance, we may advise you on income splitting – with your spouse or children – or suggest you invest in a registered plan.

1. RRSP and LIRA


With a registered retirement savings plan, you can defer paying taxes on invested money until you retire.

The income and capital gains generated by your investments grow tax-free until you start making withdrawals.

Since your retirement tax rate is likely to be lower than you're working tax rate, you have more freedom to maintain your lifestyle.

Who can contribute to an RRSP?

Anyone aged 71 years or younger with earned income in Canada:

  • net employment income
  • net rental income (real estate or other property)
  • net business income
  • taxable support payments, etc.

Tips and strategies

  • Transfer the shares already held outside an RRSP to an RRSP if the capital gains are low
  • Maximize your RRSP contribution in years where your income is high
  • Contribute to your RRSP as soon as possible during the year
  • It could be beneficial to contribute to your spouse’s RRSP: income splitting
  • If necessary, use the HBP (House Buyers’ Plan)
  • If necessary, use the LLP (Lifelong Learning Plan)

Locked-in Retirement Account (LIRA) & Locked-in RRSP

If you have a Registered Pension Plan (RPP) under provincial jurisdiction, you can transfer that money into a LIRA.

If you have an RPP under federal jurisdiction, you can transfer that money into a Locked-in RRSP.

Unlike a regular RRSP, and except under specific situations (death, reduced life expectancy, non-residency for two years), money cannot be directly withdrawn from a LIRA/Locked-in RRSP.

Instead, you have to convert the plan into a Life Income Fund (LIF) or life annuity before you can start withdrawing funds.

The deadline for converting a LIRA/Locked-in RRSP is December 31st of the year in which you turn 71.


The Tax Free Savings Account (TFSA) is an investment vehicle that enables you to build up your savings in a tax-free environment, regardless of your annual income level.

Main Advantages

Tax-free savings

The investment income you earn in your TFSA is not taxable, even when you make withdrawals.

The income earned in the TFSA and the withdrawals made from the TFSA do not affect your eligibility for government benefits and credits (e.g. Guaranteed Income Supplement, Old Age Security Pension).

Flexible savings

The TFSA helps you meet your savings needs throughout your life (not only after retirement). You can withdraw funds from your TFSA at any time for any purpose. If you do not make the maximum annual contribution, your unused contribution room is carried forward to subsequent years.

Who qualifies for a TFSA?

All individuals aged 18 and over who are Canadian residents qualify for a TFSA, and regardless of your current situation the TFSA provides many advantages.

Contribute to your TFSA or RRSP?

The answer is in your current tax rate and your tax rate at retirement.

TFSA vs. RRSP table

Main purpose Meets your savings needs throughout your life (not only after retirement) Mainly meets retirement needs
Tax treatment Both savings vehicles offer tax advantages but there are some minor differences between them
Eligibility TFSA RRSP
Minimum age 18 None
Maximum age None 71
Maturity date (termination) None December 31 of the year in which you turn 71 years of age
Contribution Room TFSA RRSP
Annual contribution limit $5,000 (2011)
$5,000 (2012)
$5,500 (2013)
$5,500 (2014)
$10 000 (2015)
$5 500 (2016)
$22,450 (2011)
$22,970 (2012)
$23,820 (2013)
$24,270 (2014)
$24 930 (2015)
$25 370 (2016)
Contribution limit as a % of earned income No matter how much you earn, the contribution limit is $5,000 18% of earned income (Subject to the annual contribution limit)
Excess contributions Penalty of 1% per month Penalty of 1% per month (Up to $2,000 in excess contributions are allowed without penalty)
Unused contribution room carried forward From year to year From year to year
Contribution room restored after withdrawals Starting the following year  
Contribution limit indexed? According to the Consumer Price index (CPI), rounded to the nearest $500 Based on the increase in the Average Industrial Wage (AIW)
Spousal contributions? No, but one spouse can give the other spouse the funds needed for his/her contribution without being subject to income attribution rules  
Transfer to spouse in the event of relationship breakdown / death? Without affecting contribution room Without affecting contribution room
Tax rules TFSA RRSP
Tax deductible contributions? TFSA contributions cannot be deducted from income.  
Taxable income    
Withdrawals taxable? You can withdraw funds from your TFSA at any time for any purpose without having to pay tax on the withdrawals. You can withdraw funds from your RRSP at any time for any purpose but you have to pay tax on the withdrawals.
Minimum withdrawal   After you convert your RRSP into a RRIF
Impact on income-tested government retirement benefits and tax credits (claw back of Old Age Security and Guaranteed Income Supplement) Does not reduce benefits or tax credits. May reduce benefits and tax credits
Tax impact in the event of death If transferred to the spouse. The value of the TFSA is never taxable.
  • If the TFSA is left to a person other than your spouse, the TFSA will be terminated and the investments will become non-registered assets.
  • The income generated by those non-registered assets will be taxable.
If rolled over to the spouse


Plan for your children's future

With a Registered Education Savings Plan (RESP), you can set money aside for your children, money that will grow in a tax-sheltered environment until your children need it for post-secondary studies. Once they enter a post-secondary institution, that money will allow them to focus more on studies and less on part-time jobs.

RESP Features

  • Funds may be invested for the post-secondary education of the beneficiary or beneficiaries.
  • Capital and income are tax-sheltered.
  • Maximum of $50,000 per beneficiary for the duration of the plan.
  • Available government grants:
    • Basic Canadian Education Savings Grant (Basic CESG)
    • Additional Canadian Education Savings Grant (Additional CESG)
    • Canada Learning Bond (CLB)
    • Alberta Centennial Education Savings Grant (ACES)
    • Quebec Education Savings Incentive (QESI)

Available Plans

Individual RESP Family RESP
Beneficiaries A single beneficiary regardless of relation to subscriber. One or more beneficiaries, who must be related to the subscriber by blood or adoption.
Age limit No age limit. The beneficiaries must be under 31 years of age.
Breakdown among beneficiaries Contributions, withdrawals and Educational Assistance Payments apply to a single beneficiary. Contributions are split by the subscriber among the beneficiaries.
If the child does not pursue post-secondary education A new beneficiary may be designated. The other beneficiaries can split the contributions.

Start Saving Today - An Example

It's best to start investing in the years immediately following a child's birth to be able to take full advantage of government grants and to establish a solid investment strategy.

* The figures in this graph are assumptions only and are provided to illustrate the potential advantages of this product under identical conditions.

Open an RESP Account

Step 1: Obtain a Social Insurance Number (SIN) for your child

  • Contact the nearest Service Canada Centre to apply for a SIN for your child.
  • The forms are on the Service Canada Web site.

Step 2: Contact us


A registered disability savings plan (RDSP) is a savings plan that is intended to help parents and others save for the long term financial security of a person who is eligible for the disability tax credit.

Contributions to an RDSP are not tax deductible and can be made until the end of the year in which the beneficiary turns 59. Contributions that are withdrawn are not included in income for the beneficiary when they are paid out of an RDSP. However, the Canada disability savings grant, the Canada disability savings bond, investment income earned in the plan, and rollover amounts are included in the beneficiary's income for tax purposes when they are paid out of the RDSP.


Who can become a beneficiary of an RDSP?

You can designate an individual as beneficiary if the individual:

  • is eligible for the disability tax credit (DTC);
  • has a valid social insurance number (SIN);
  • is a resident in Canada when the plan is entered into;
  • is under the age of 60 (a plan can be opened for an individual until the end of the year in which they turn 59).The age limit does not apply when a beneficiary's RDSP is opened as a result of a transfer from the beneficiary's former RDSP.

A beneficiary can only have one RDSP at any given time, although this RDSP can have several plan holders throughout its existence, and it can have more than one plan holder at any given time.

For more information, please refer to CRA web site: http://www.cra-arc.gc.ca/gncy/bdgt/2012/qa08-eng.html


When I'm ready to retire...

What will happen to my RRSP?

If you have a Registered Retirement Savings Plan (RRSP), you are required to collapse it no later than December 31 of the year in which you turn 71.


A RRIF is an extension of your RRSP

RRIFs are designed to provide retirement income while allowing income taxes to be deferred. Like an RRSP, a RRIF lets you invest your savings as you wish by choosing from our wide range of investment solutions.

Advantages of a RRIF

  • You are not redeeming your RRSP, but simply converting it into a RRIF;
  • You are free to choose the eligible investments that are best for you from among a wide selection of options (e.g., GICs, mutual funds);
  • In addition to the minimum annual withdrawal, you can withdraw additional monies or even the entire amount, at any time;
  • On your death, the RRIF can be transferred to your spouse tax-free.


For all RRIFs opened after 1992, the following formulas are used to calculate that required minimum withdrawal:

Up to age 70:

Minimum withdrawal = Market value of the RRIF at January 1
90 minus your age at January 1


If, on January 1 of this year, you were 65 and had a RRIF worth $200,000, your minimum withdrawal for this year would be:

= $8,000

As of age 71:

Your age at January 1 Min. Annual Withdrawal (% of RRIF assets) Your age at January 1 Min. Annual Withdrawal (% of RRIF assets)
71 5,28% 83 7,71%
72 5,40% 84 8,08%
73 5,53% 85 8,51%
74 5,67% 86 8,99%
75 5,82% 87 9,55%
76 5,98% 88 10,21%
77 6,17% 89 10,99%
78 6,36% 90 11,92%
79 6,58% 91 13,06%
80 6,82% 92 14,49%
81 7,08% 93 16,34%
82 7,38% 94 18,79%
95+ 20,00%

Life Income Fund (LIF)

You have to convert your LIRA/Locked-in RRSP into a LIF

LIFs share many of the features of RRIFs except that LIFs are subject to a maximum annual payment.

Advantages of a LIF

  • You can continue to defer income taxes on your LIRA/Locked-in RRSP by converting it to a LIF.
  • You are free to choose investments from among a wide selection of options (e.g., GICs, mutual funds).

LIF/RRIF Tax Impact

Income taxes on payments exceeding the minimum

Payments from your RRIF or LIF that exceed the minimum annual payment are subject to withholding tax. Any amount you receive from either type of plan must be reported on your income tax return for the year in which the payment was made. You could be entitled to a refund, or you could end up paying additional tax.

If you receive only the minimum annual payment, the money in your RRIF or LIF can continue to grow tax-free. If however, you rely on your RRIF or LIF as your main source of income, you may need larger payments (subject to a maximum annual payment for LIFs).

Spousal Age

You can establish your minimum annual payment from your RRIF or LIF based on your spouse’s age if he/she is younger than you are. If this is the case, your minimum payment rate will be lower, which means you can defer taxes for longer. However, you will have to make your decision before you start receiving your benefits and you will not be able to revoke that decision.

Important Dates

There is no minimum age for opening a RRIF or LIF but you have to convert your RRSP into a RRIF or convert your LIRA/Locked-in RRSP into a LIF no later than December 31 of the year you turn 71.

Bear in mind that you must receive your first payment no later than December 31 of the year you turn 72.

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