A Smart Investor Retires Early, Are You One?
An RRSP is simply a savings strategy for your retirement which allows you to invest on a tax-deferred basis. Your contributions to the plan are allowed to accumulate, along with investment income on this tax-free basis until the funds are withdrawn during your retirement years. Although the funds will be fully taxable at that time, this will be during a period of lower income and your tax rate will likely be lower.
Within your plan, all income generated by your savings are tax free as long as the profit is directed back into your account. Imagine, if your hard earned money is sheltered from paying tax AND earning you profit. Can it get any better than this?
One investment strategy is to contribute as much as you can to your RRSP each year. Check your latest income tax notice of assessment (issued by Revenue Canada) to find out your maximum contribution for the year or the previous years if you have not used the maximum.
The Benefits of a Self-Directed RRSP Account
You will be in control, and we think that alone is a good enough reason. There is no one better than yourself to take care of your hard-earned money – don’t let anybody tell you different.
There are a number of products/investments that qualify for a Self-Directed RRSP. You can choose from conventional investments like GICs, bonds, mutual funds and stocks. Self-directed RRSPs also allow you to invest in mortgages, small business corporations, and other non-conventional investments. Self-directed RRSPs do give you choice and control over product selection.
We have found that every financial company has good products and bad products. If you have all your investments with one company, you are likely to have good products and bad ones. One of the goals of having a self-directed RRSP is to try to determine the strengths of different companies (what are they really good at?) and try to select products that play to their strengths. Diversification by company is best done by self-directing your RRSP investments.
For further information on high return investment opportunities, visit Private Lender Inc. or contact our office at 403-253-2022.