Standing out from the crowd this RRSP season
Introduced almost 60 years ago to encourage retirement savings by employees and self-employed people, RRSPs remain a reliable creator of wealth and the benefits accrue throughout a lifetime. With this year’s RRSP season about to hit its peak, now is a good time to look at how you can stand out from the crowd and go the extra mile to make sure your clients are getting the best out of their RRSP.
Contributions to RRSPs are deductible from total income, reducing income tax payable for the year in which the contributions are claimed. In some cases, an RRSP allows the Canadian government to foot the bill for 40% of all the money you invest and all growth from these investments is tax free.
Does that sound almost impossible to resist? Yet many Canadians do.
Going back to basics
While the formula for getting the most out of an RRSP is hardly complex, many people simply fail to pay attention to the basics and this can be to the detriment of their future financial wellbeing.
Clients should be made aware that whatever amount they choose to contribute to an RRSP on an annual basis is fully deductible come tax season. This can result in one of the largest tax breaks available to Canadians, particularly for those in the highest tax brackets.
While primarily a retirement vehicle, RRSPs are also highly useful tools for funding certain major life events, including buying a home and funding an education.
Identifying opportunities for your clients
If a client appears to be considering buying a home for the first time, alert them to the benefits of the Home Buyer’s Plan, which will allow your client to withdraw up to $25,000 from their RRSP to fund the purchase of a new home (or $50,000 in the case of two eligible partners who both have RRSPs).
By leveraging your existing CRM data, you can easily identify opportunities for your clients that would otherwise go ignored.
To summarize, here are the 5 things your clients need to know about RRSPs:
- While an RRSP is a retirement account, its financial benefits accrue through a lifetime.
- RRSPs are highly useful tools for funding major life events
- There are a few easy ways to maximize your RRSP potential
- The right RRSP guidance, at the right time, can make all the difference.
- There is no better retirement program available to Canadians than the RRSP.
Find out how you can make the most of this time of year by registering for our complimentary webinar on Tuesday November 22nd at 11AM PT/2PM ET.