South Coast Financial Services
We care about your financial self defence ... shouldn't you?
Dear Visitor,Well we are at the start of a new year, may 2022 be a year where you stay safe and healthy.
At this time of the year it seems that Financial Advisors are all out there talking about the “RRSP season”. Truthfully I don’t think there is such a thing. Sure any contributions you make in January and February will reduce your taxable income but so do contributions made all throughout 2021.
So the question is: is it better to make one big contribution during this so called “RRSP season” or make smaller contributions throughout the year?
Take a look at the growth of the stock market in 2021. By making smaller contributions monthly you take advantage of the monthly growth (this is called dollar cost averaging). By waiting until January / February you didn’t get the advantage of any of 2021’s growth.
Now the “RRSP season” does have its place, if you want to take extra funds and put them in your RRSP at the beginning of the year it is nice to be able to do so and reduce your 2021 taxable income.
So next what do you do with the money you may get back as an income tax return?
Many advisors would say put it in your RRSP to build for your retirement. But an alternative may be to put it into a TFSA investment. Why? Well any growth in a TFSA is income tax free so why not use this fund along with your RRSP at retirement time. It also can provide you an emergency fund in case something unexpected should arise.
By doing this you are again reducing your taxable income since RRSP withdrawals are considered taxable income due to your tax relief when you initially contributed to it.
By following strategies like this you may find yourself in a better position at retirement time.
If you would like to start contributing to your retirement / emergency fund contact me and we can setup a time to meet and complete any paperwork either in person or through a virtual meeting.
We provide services in all these areas: Income Protection
Investing for the Future
Wills & Powers of Attorney
Should you desire more information in any of these areas contact us, our contact information is below and we would be glad to setup a time where we can sit down and discuss things with you.
Also make sure you book your appointment for your complimentary, comprehensive and confidential Financial Goals Analysis. The analysis can lead you and your family to your financial goals and dreams!