You’ve opened an RRSP! Now what?

You’ve opened an RRSP! Now what?

YOU’VE OPENED AN RRSP! NOW WHAT?

March 1, 2024

Congratulations on taking a fantastic leap forward by opening a Registered Retirement Savings Plan (RRSP)! This trusty vessel is set to guide you toward the tranquil shores of retirement, but it won’t sail itself. How do you ensure your journey is smooth sailing and not adrift in the open seas?

Imagine your RRSP as a garden you’ve just begun to sow. To flourish, it requires attention, strategy, and regular nurturing. But rest assured, you don’t need a green thumb to grow your retirement savings—you need savvy management skills.

Managing Your RRSP

Getting Acquainted with your Investments

First things first, understand what’s in your portfolio. Are you heavy on stocks, bonds, or mutual funds? Your choice should reflect your risk tolerance and the time you have until retirement.

  • For those who can take on the possibility of risk, stocks might be your mainstay.
  • If you prefer to be on the safer side, consider Guaranteed Investment Certificates (GICs)
  • And for those who like a bit of both, mutual funds or ETFs could provide the balanced diet your RRSP craves.

Regular Contributions: Keeping the Wind in Your Sails

Once you’ve charted your investment course, consistent contributions are key. Whether you opt for an auto deposit or an annual lump sum, remember that even small additions can compound into a hefty nest egg over time. It’s wise to review your RRSP investments at least once a year. However, there’s no harm in checking in semi-annually, especially if market tides turn swiftly. Contribute to your RRSP often and contributing to your RRSP early in the tax year gives your money more time to grow, while systematic contributions can take advantage of dollar-cost averaging.

Weatherproofing Against Taxes

Your RRSP is a tax-deferred haven. You won’t pay taxes on contributions or growth within the account until you make withdrawals. Be mindful of when you are withdrawing from your RRSP and for what reason. You can withdraw from your RRSP any time if your funds are not in a locked-in plan. The withdrawal, however, is subject to withholding tax and the amount also needs to be included as income when filing your taxes.

There are situations in which tax-deferred withdrawals can be made from your RRSP. For instance: If the funds are used for the purchase of a home for the first time through the Home Buyers’ Plan or for funding education through the Lifelong Learning Plan. In Canada, the current withholding tax rates for withdrawing funds from an RRSP are as follows: 10% on amounts up-to $5,000; 20% on amounts over $5,000 up-to and including $15,000; and. 30% on amounts over $15,000. Your taxable income at retirement is likely to be lower than the taxable income you had during your working life; you’ll pay less tax by withdrawing from your RRSP once you retire. It’s therefore more tax-efficient to wait before making a withdrawal.

Rebalancing: Navigating Market Storms

Essentially, rebalancing means selling some assets in your portfolio and buying others to help maintain your target asset allocation. This is especially important during times of significant market volatility. As market conditions shift, so too should your portfolio. We recommend that you consider if you need to rebalance whenever you review your portfolio, or at least annually.

Life After RRSP Contribution

The thrill of starting your RRSP is one thing, but the steady journey of managing it toward a comfortable retirement is another. Over time, you will see the landscape change—it’s inevitable as the markets ebb and flow. 

In the end, managing your RRSP effectively is about staying informed, adjusting as needed, and keeping a long-term perspective. With these navigational skills, your retirement prospects look bright as daybreak on the horizon.

Haven’t opened your RRSP yet? YNCU has more than one RRSP investment option for you. Check out which option would work best for you.

With research and dedication, self-management is totally doable. That said, the more you know, the better. YNCUniversity is here for all your financial literacy needs. Need one-on-one help? We got you! Reach out to our advisors HERE.

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ON THE WAY TO WEALTH WITH ASSETS

ON THE WAY TO WEALTH WITH ASSETS

ON THE WAY TO WEALTH WITH ASSETS
How to Build Your Financial Portfolio

Thursday, July 27, 2023

Interested in building wealth? Curious about investments and assets? You’ve come to the right place. If you’re looking to secure your financial future, building a solid portfolio is a crucial step in achieving your goals. An investment asset is a financial instrument that individuals obtain with the intention of generating income, capital appreciation, or both over time. In this blog post, we will provide you with valuable insights and actionable steps to help you create a successful financial portfolio.

Step 1: Start with Clear Goals

Examples of fixed assets are your home, your cottage, or any vehicles, while examples of liquid assets are cash, or investments. Before diving into the world of investing, it’s essential to define your objectives. Ask yourself questions like, “What do I want to achieve financially?” and “What is my timeframe for reaching these goals?” Setting clear and achievable targets will guide your investment decisions.

Step 2: Assess Your Risk Tolerance

Investing comes with risks, and understanding your risk tolerance is essential for long-term success. Take the time to evaluate how comfortable you are with potential fluctuations in your portfolio’s value. This assessment will influence the asset allocation that best suits your risk appetite.

Step 3: Explore Tax-Advantaged Accounts

In Canada, there are tax-advantaged accounts such as Registered Retirement Savings Plans (RRSPs) and Tax-Free Savings Accounts (TFSAs). These accounts offer unique benefits and can be powerful tools for building your financial portfolio. Understand the contribution limits, withdrawal rules, and tax implications associated with each account to maximize their potential.

Step 4: Research Potential Investments

Stay informed and keep learning about not only the Canadian market but investing outside of Canada as well – the biggest market in the world is American. A well-informed investor is better equipped to make sound investment choices. Research different companies, sectors, and investment opportunities that align with your goals and risk tolerance. Stay updated on economic indicators, government policies, and industry trends to make informed decisions.

Step 5: Consider Professional Advice

Seeking the guidance of an advisor can provide you with expert advice tailored to your specific circumstances. An experienced professional can help you navigate the intricacies of the markets, help you understand your risk tolerance, identify suitable opportunities, and suggest appropriate portfolio adjustments as needed. They can also guide you on how to take advantage of Canadian tax strategies and investment vehicles.


No need to memorize all this information. YNCU is here to help. YNCU offers registered products such as TFSA, RRSP, RESPs, and non-registered accounts as well. Within these products you can be invested in an array of different types of investments such as savings accounts, term products, and mutual funds through Credential Securities or Credential Asset Management Inc. Click HERE for more information.

Regardless of what you decide to do with your money, assets are important to long term financial stability. Assets build your net worth whether that means for future goals or current lifestyle. Building a financial portfolio as an investor requires careful planning and continuous effort. By setting clear goals, diversifying and staying informed about the investment markets, you can lay a solid foundation for your financial future.

For all your general financial inquiries and how you can plan out your financial goals, come talk with an advisor at your YNCU branch!

INVESTING IN A GIC

INVESTING IN A GIC

INVESTING IN A GIC

Monday, May 15, 2023

Invest with no risk! A Guaranteed Investment Certificate (GIC) is a great option for every type of investor. Available in short and long terms, your original investment is 100% protected from the fluctuations of the market – so you have nothing to lose and everything to gain.

HOW DOES A GIC WORK?

Think of it like a savings account – the money you hold in your account earns interest over time. The difference between a savings account and a GIC is that you need to leave your money in a GIC account for a specified period of time. When you purchase a GIC, you are agreeing to lend the financial institution your money for a specified term, ranging anywhere from 30 days up to 5 years, in exchange for earned interest. Typically with GICs, the longer the term, the better your rate of return, and the more interest you earn. At the end of the term, you can choose to either cashout your investment with the interest earned, or reinvest into a new GIC.

WHEN IS A GIC A GOOD FIT?

Since GICs have a fixed rate and are not influenced by the stock market, they are considered one of the safest investment options for Canadians. Here’s when investing in a GIC may be beneficial for you:

  • You’re new to investing or feel uneasy about investing in a volatile market.
  • You’re saving for a specific short-term goal and want to earn a bit of interest until you’re ready to use your savings.
  • You’re retired or nearing retirement and will need access to your money soon.
  • You struggle with meeting your financial goals and want to remove the temptation to dip into your savings.
  • Your child will be pursuing post-secondary education soon and you’re looking for a low-risk investment option.
  • You’re beginning to teach your children about investing and looking to show them savings growth over time without the risk.

HERE’S WHAT YOU NEED TO KNOW

  • Most GICs pay a fixed rate of interest for a set term (6 months, 1 year, 2 years or up to 5 years).
  • Interest on your GIC can be paid monthly, once a year or on the maturity date, depending on the product.
  • You can hold your GICs in registered investment accounts (RRSPs, RRIFs and TFSAs).
  • Unlike other investment products, GICs have no direct fees associated with them. Times where you may face a fee would be if you withdraw your investment from a non-redeemable GIC prior to the maturity date or if you transfer a GIC from a registered account (TFSA, RSP, RIF) to another financial institution.
  • Redeemable GICs give you the option to withdraw your money prior to the maturity date, but typically pay a lower interest rate than originally offered if you choose to do so.
  • Cashable GICs are similar to redeemable GICs in that you can withdraw your money prior to the maturity date, but only once a predetermined “locked-in” period (30 days to 90 days) has passed.
  • Your deposits are insured through the Financial Services Regulatory Authority (FSRA).

Ready to be proactive about your financial future?

Grow your investments, without the risk. Whether you’re saving for your dream vacation, planning for retirement, or just looking to diversify your portfolio, YNCU is ready to help you grow your money with a variety of terms and products to suit your unique investment goals.

Choose a GIC with YNCU to benefit from our:

  • Competitive Rates – Higher rates than redeemable investments and savings account options.
  • Tax Benefits – Take advantage of tax benefits when you invest a GIC into your TSFA, RSP, or RIF account.

For all your general financial inquiries and how you can plan out your financial goals, come talk with someone at your YNCU branch!

WHY YOU NEED TO START AN RRSP TODAY

WHY YOU NEED TO START AN RRSP TODAY

WHY YOU NEED TO START AN RRSP TODAY

Tuesday, January 17, 2023

Retirement is something we should all be thinking about, regardless of your age or where you are in life. A Registered Retirement Savings Plan (RRSP) is a government approved plan created to help you financially prepare for retirement. Your allowable contributions, which change annually, are tax deductible, and the investment gains will be tax-deferred until you begin withdrawing. So, what does that mean? We’ve compiled everything you need to know about RRSPs and why you need to start one today.

What are the benefits of an RRSP

An RRSP allows you to invest money when you can most afford it – during your peak earning years – to build up a comfortable tax-sheltered retirement fund. Since 100% of these earnings can be reinvested and compounded, the growth of your RRSP can increase rapidly over time. Your retirement savings will also increase significantly if you make each RRSP contribution as soon as allowed, for example, early in the year.

Making an RRSP contribution can potentially reduce the amount of tax you will be subject to pay on your income tax return. The CRA will use your RRSP contribution amount to reduce your taxable income for that year. You can also choose to defer claiming your deductions and use them on a future tax return if you suspect an increase in income that will put you into a higher tax bracket. 

Another benefit is that all of your RRSP investment growth is tax-deferred, meaning your investments will compound much faster without the drag of annual taxes, which can be quite significant. The average Canadian family would experience a 15% drag due to capital gains tax and a 30% drag due to the tax on interest payments. Over 40 years this can cut $300,000+ off of your retirement savings. This can easily be avoided by using an RRSP.

Relax, your money won’t be locked in with an RRSP. Withdrawals are permitted before retirement but will be subject to a withholding tax unless being used to fund certain life expenses, such as purchasing your first home through the Home Buyers’ Plan or funding continued education through the Lifelong Learning Plan. These types of withdrawals won’t be taxed as long as you pay them back to your RRSP within the set time period.

Your RRSP account is also protected from creditors. Your RRSP can’t be used to cover liabilities from either a lawsuit or bankruptcy, similarly to a pension. This is what sets RRSPs apart from Tax-Free Savings Accounts and Registered Education Savings Plans, both of which can be seized to cover personal liabilities.

Is an RRSP right for you?

Once you have taxable Canadian “earned income”, even if you’re a non-resident, we suggest contributing regularly to an RRSP. Contributions can be made until the end of the year in which you turn 71 years old. Don’t worry if your income is below the taxable threshold, you should still file a tax return to report your earned income and create RRSP deduction room. The earlier you start, the better – compound interest and upward market trends will be on your side over time. Plus, who doesn’t want their savings to grow faster and tax free?

Ready to be proactive about your financial future?

If setting up an RRSP with YNCU is something on your mind, we have a number of investment options and offer spousal RRSPs. We also offer flexible RRSP loan options to assist you in making your maximum RRSP contribution. Our RRSP loan options include a quick approval process with a flexible repayment plan.

Start looking into a RRSP today! Your future self will thank you.

For all your general financial inquiries and how you can plan out your financial goals, come talk with someone at your YNCU branch!