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MAXIMIZING YOUR GROWTH:
Investment strategies not offered through your bank!
LEVERAGING INTO SEGREGATED FUND CAN PROVIDE RRSP EQUIVALENT TAX DEDUCTIONS, BETTER TAXATION CONSIDERATIONS, AND SUPERIOR GROWTH!
Maximize growth with retirement savings outside an RRSP! The only vehicle known to most for retirement saving is the RRSP. The recent growing popularity of a Guaranteed Income Fund (GIF) or Segregated Fund, is now changing the way we view saving for retirement. Imagine obtaining the following benefits outside an RRSP:
Tax deductions: Contributions or payments are 100% deductible from your taxable income.
Preferred taxation on growth: Growth inside your portfolio are taxed as capital gains (currently 50%) as oppose to an RRSP which are fully taxable as income (100%).
Potential for accelerated growth: Growth is accelerated or magnified when compared to an RRSP with identical funds and returns!
RESPONSIBLE LEVERAGING: When you buy a home and obtain a mortgage you are leveraging. In simple terms, you are borrowing to invest. Most people do this because they feel it’s an acceptable risk with safety nets in place. Banks provide mortgages because they use your home as collateral, since they too avoid risk. This is responsible leveraging.
Some major Canadian banks, as conservative as they are, now view borrowing to invest into Guaranteed Income Fund or Segregated Funds as responsible leveraging. Some benefits include:
- Interest payments only
- Interest on loans as low as prime
- No margin calls
- No collateral required (money invested is collateral itself)
- Segregated Funds or (GIF’s) provide maturity and death guarantees
These protective features are only available through an insurance company.
EXAMPLE: Long term retirement planning
Mary, age 40, can contribute quite comfortably $400 a month into an RRSP.
Instead, with a simple credit check, she is approved for a loan of $75,000 (at prime + 0.50) and deposits it into a Segregated Fund or GIF portfolio.
As an immediate benefit, each year she receives about $4,900 in tax deductions.
Results after 25 years
The portfolio grows at a modest average rate of 8% per year.
After paying back the loan and all taxes, she takes home a net $359,000.
An equivalent RRSP would net $263,000.
Is this strategy appropriate for you?
While the masses rush to make their contributions during RRSP season, we encourage you to explore this unique, government approved strategy.
At F1RST CHO1CE Investment Solutions were passionate about sharing our knowledge, experience and unbiased opinions with families and individuals that are looking for a trusted advisor to help them with their Investment Planning options.
ANY QUESTIONS?…Contact a Licensed Investment Advisor today!