Between now and retirement, life happens. Let’s look at some things you might want to consider.
Home Buyers’ Plan (HBP)
Buying a home is a significant investment that is bound to change your priorities about saving – especially saving for retirement.
But what if your retirement savings plan could actually help you buy a home… today?
And you would still be saving for the future and paying less taxes.
Here’s how
The key to the successful purchase of your new home is a solid foundation – both structurally and financially. The Home Buyers’ Plan is a federal program which allows you to borrow money from your RRSP, tax-free, to buy or build a home.
Here's how it works
For more information on the Home Buyers’ Plan, including rules and eligibility,
Visit the Home Buyers’ Plan section in the Canada Revenue Agency website.
Lifelong Learning Plan (LLP)
The Lifelong Learning Plan is a federal government program that allows you to take an interest-free loan from your RRSP to continue your own or your partner’s education.
You can:
- Finance full-time training or education for you or your spouse or common-law partner.
- Withdraw up to $20,000 from your RRSP over a four-year period– tax and interest-free (Note: you cannot withdraw more than $10,000 in a single calendar year. Your spouse or common-law partner can also withdraw up to $10,000 from his/her RRSP per calendar year, for a combined maximum of $20,000 in a calendar year.)
- Take up to 10 years to pay it back into your RRSP.
For more information on the Lifelong Learning Plan, including rules and eligibility, visit the
Lifelong Learning Plan section in the Canada Revenue Agency website, or www.canlearn.ca.
Here’s a way to save for your child’s education, and maybe get some help along the way from the Government.
An RESP is an education savings account that helps you, your family or friends put aside money for your child’s post-secondary education. The savings in an RESP grow tax-free.
You could also gain government money through the Canada Education Savings Grant and the Canada Learning Bond, if you qualify.
For more information on the Registered Education Savings Plan, including rules and eligibility, visit the Registered Education Savings Plan section in the Canada Revenue Agency website, or www.canlearn.ca.
Reviewing your insurance
Any major event in your life will affect your planning and your finances in some way.
Consider:
- You get married
- You have children
- You get divorced
- You retire
- You get a mortgage, or make another major financial commitment
Getting married or divorced can affect your group medical and dental insurance coverage, if you are on your spouse’s workplace plan or vice-versa.
Having children will make you want extra peace of mind, to make sure your family is taken care of in case of your death, illness or disability.
These are the times to review your insurance policies, and see where you might need to change your coverage, add to your coverage, or buy extra insurance, such as:
- Life insurance
- Health insurance
- Disability insurance
- Critical illness insurance
Of wills and beneficiaries
Nobody likes to think of “what if”. But as you build your plan and start accumulating assets it will become more and more important to make sure they go to the right people if you die.
There are two ways to do that without placing an extra burden on the people you want to take care of:
1. Make a will
- Making a will ensures that your estate is dealt with quickly, smoothly, and according to your wishes.
- It can indicate your preferences for the care and education of any children you may have.
- Leaving no will places a burden on your closest relatives, as it can delay the settlement of your estate and cause financial hardship to those left behind.
2. Designate beneficiaries
Think about designating one or more beneficiaries for:
- Any insurance policies for which you can designate a beneficiary
- You group retirement plan when allowed (e.g.: RPP)
- Any financial product you purchased through an insurance company (annuity, segregated funds, etc…)
- Any other financial product where the law allows for the designation of beneficiary
Why is this important?
When you designate beneficiaries the benefit goes directly to them, your estate can generally avoid probate fees, and it speeds up the payment of death benefit. If you do not designate a beneficiary, any benefit goes to your estate. Designating a beneficiary can also offer a measure of protection against creditors to the extent provided for under applicable legislation.
And, of course, wills and insurance policies should be reviewed and amended periodically. Because life happens.
We hope you’ve found the Learning centre instructive so far. You can now continue on to the next section and start building your Plan for life.
We also encourage you to consult the materials in Glossaries and other references.
