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Registered plans

Take advantage of registered plans with special tax benefits to save faster for your goals. 

 

What are you saving for?

 

Take advantage of the new First Home Savings Account (FHSA)

The FHSA is the latest government registered plan, introduced in 2023. It helps you save up to $40,000 for your first home – tax-free. Plus, any contributions you make can be used to reduce your tax bill each year.
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Tax Free Savings Account (TFSA)

What is a TFSA?

A Tax Free Savings Account (TFSA) is a flexible registered plan that helps you save for any goal or purchase – retirement, a car, a dream vacation – completely tax free.

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How does a TFSA work?

If you’re over 18, live in Canada and have a valid social insurance number (SIN), you can save up to a set limit each year in your TFSA and pay no tax on the interest you earn.

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Why invest in a TFSA?

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Accelerate savings

Any savings interest you earn inside a TFSA is tax free and stays that way even when it’s withdrawn.

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Save for any goal

Your TFSA isn’t tied to a specific goal, so you can use it to save for any purpose. The choice is yours.

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Withdraw anytime

There are no restrictions on when you can withdraw TFSA funds, so you can take money out whenever you need.

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Build contribution room

TFSA contribution room is never lost. Unused amounts and withdrawals just add more savings room the following year.

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Contribute indefinitely

Unlike other registered plans, you can keep contributing to your TFSA as long as you like. There’s no age limit.

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Invest your way

You can customize your TFSA with many kinds of investments – mutual funds*, term deposits, even savings accounts.

 
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Is this registered plan right for me?

A Tax Free Savings Account is a powerful tool for any type of savings but it’s particularly helpful in certain situations:

  • All-purpose saving – if you want the flexibility to save for many goals in one place.

  • Easy access – if you want to be able to withdraw your savings at any time without penalty.

  • Medium to long-term goals – If you don’t need your savings for a while. This maximizes how long they can grow tax-free.

Ready to get set up?

 
 

Boost your TFSA know-how

Try our TFSA calculator

Our handy calculator helps you visualize the benefits of investing in a TFSA over a regular, taxable account.

 

Your TFSA questions answered

The TFSA contribution limit in 2023 is $6,500. Since the TFSA was first introduced in 2009, this contribution limit has steadily increased:

Year
TFSA contribution limit
2009-2012 $5,000
2013-2014 $5,500
2015 $10,000
2016-2018 $5,500
2019-2022 $6,000
2023 $6,500

Any Tax Free Savings Account contributions or withdrawals you make are reported to the Canada Revenue Agency (CRA). That way they can keep track of how much TFSA contribution room you’ve used and how much you have left. You can see this amount in your “My Account” on the CRA website.

If you go over your TFSA contribution limit, the Canada Revenue Agency (CRA) will impose a tax of 1% per month on the excess amount. This will continue until you either:

  • Withdraw all of it; or

  • It’s absorbed by an increase in your contribution room

How to withdraw from a TFSA will vary depending on your financial institution and the type of investments you hold in the account. If you’re unsure of the steps at Gulf & Fraser, don’t hesitate to reach out. Our advisors are just a live chat, video, or phone call away to help.

Get in touch

TFSA withdrawal rules are very flexible. You can withdraw money from your account at any time for any purpose tax free (though you’ll need to bear in mind restrictions for investments you hold in it). There’s also no limit on the amount you can take out.

However, there is one key TFSA withdrawal rule to be aware of – you must have unused TFSA contribution room if you want to re-contribute a withdrawal in the year it was made. This is because the amount you withdraw will only get added back to your contribution room at the beginning of the following year. So, if you’ve maxed out your TFSA, re-contributing will cause you to go over your TFSA contribution limit.

Example

If you’ve maxed out your TFSA and withdraw $1,000 from it in 2023, you won’t be able to re-contribute that $1,000 until January 2024 without exceeding your TFSA contribution limit.

This is a great question, and the answer will vary for each person. To help you figure it out, here’s a breakdown of the key differences between the RRSP vs. TFSA:

TFSA
RRSP

Can be used to save for any goal

Can be used to save for retirement, education or your first home

You don’t need taxable income to accumulate contribution room

You do need taxable income to accumulate contribution room

Contributions aren’t tax deductible

Contributions are tax deductible

Withdrawals are tax free

Withdrawals are taxed in the year they’re made1

You can contribute at any age

You can contribute up until the end of year you turn 71

Still not sure which registered plan is right for you? Don’t hesitate to reach out! Our advisors are just a live chat, video, or phone call away to help.

Get in touch

1 Except if the withdrawal is made as part of the Home Buyer’s Plan (HBP) and Lifelong Learning Plan (LLP) which are not taxed provided they are repaid within the required time.

 
 

Registered Retirement Savings Plan (RRSP)

What is an RRSP?

A Registered Retirement Savings Plan (RRSP) is a powerful registered plan that helps you accelerate your retirement savings, while also reducing the income tax you pay.

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How does an RRSP work?

If you have taxable income in Canada, you can save up to a set limit each year in your RRSP and defer tax on the interest it earns to help your money grow faster.

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Why invest in an RRSP?

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Reduce your tax today

Your annual RRSP contributions are tax deductible. This means that the more you put into your RRSP the more you save on your tax bill each year.

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Defer tax on savings growth

Interest earned in your RRSP isn’t taxed until its withdrawn in retirement. At which point, you’ll likely be in a lower tax bracket and owe less.

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Accelerate other savings

You can borrow a portion of your RRSP savings to pay for further education or buy your first home, as long as you repay it within the required time.

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Invest your way

You can customize your RRSP with many kinds of investments – mutual funds*, term deposits, stocks, bonds and more – to match your needs.

 
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Is this registered plan right for me?

A Registered Retirement Savings Plan is an important retirement savings tool, particularly in certain situations:

  • Higher taxable income – if you’re in a higher tax bracket and want to reduce the amount you owe.

  • Minimal or no pension – if you don’t have other sources of retirement income.

  • Longer savings horizon – if you aren’t going to need to access the funds before retirement.


Ready to get set up?

 
 

Boost your RRSP know-how

Try our retirement planning calculator

Our handy calculator helps you determine how much you’ll need to set aside for your dream retirement.

 

Your RRSP questions answered

The current RRSP contribution limit (also known as the RRSP deduction limit) is $30,780 or 18% of the income you earned last year – whichever is less.

However, your personal RRSP contribution limit may be higher. This is because any contribution room you didn’t use in previous years is added to this amount. You’ll find your personal RRSP contribution limit on your last Notice of Assessment or by logging into your “My Account” on the Canada Revenue Agency website.

 

The RRSP deduction limit is another name for the RRSP contribution limit. It is $30,780 or 18% of the income you earned last year – whichever is less.

However, your personal RRSP deduction limit may be higher. This is because any contribution room you didn’t use in previous years is added to this amount. You’ll find your personal RRSP deduction limit on your last Notice of Assessment or by logging into your "My Account” on the Canada Revenue Agency website.

Accidental overcontributions can happen and The Canada Revenue Agency (CRA) is prepared for them. If you go over your contribution limit by $2,000 or less, you won’t be charged a penalty (note: this is a lifetime overcontribution allowance, not yearly).

However, if you overcontribute more than that $2,000 allowance, the CRA will impose a tax of 1% per month on the excess amount. This will continue until you either:

  • Withdraw all of it; or

  • It’s absorbed by an increase in your contribution room

This is a great question, and the answer will vary for each person. To help you figure it out, here’s a breakdown of the key differences between the RRSP vs. TFSA:

TFSA
RRSP

Can be used to save for any goal

Can be used to save for retirement, education or your first home

You don’t need taxable income to accumulate contribution room

You do need taxable income to accumulate contribution room

Contributions aren’t tax deductible

Contributions are tax deductible

Withdrawals are tax free

Withdrawals are taxed in the year they’re made1

You can contribute at any age

You can contribute up until the end of year you turn 71

Still not sure which registered plan is right for you? Don’t hesitate to reach out! Our advisors are just a live chat, video, or phone call away to help.

Get in touch

1 Except if the withdrawal is made as part of the Home Buyer’s Plan (HBP) and Lifelong Learning Plan (LLP) which are not taxed provided they are repaid within the required time.

Under the federal Home Buyer’s Plan (HBP), you can withdraw up to $35,000 from your RRSP to buy or build your first home. This amount will not be taxed as long as you pay it back in full within 15 years of the withdrawal.

To learn more about the HBP and its requirements, book a chat with one of our advisors.

The Pooled Registered Pension Plan (PRPP) is designed to provide retirement income for those who don’t have access to a workplace pension.

It’s similar in many ways to the Registered Retirement Savings Plan (RRSP) – contributions are tax deductible, and it has the same deduction limits as the RRSP. However, because the investments are pooled, the PRPP usually has lower administrative costs.

Want to learn more? Book a chat with one of our advisors.

 
 

Registered Retirement Income Fund (RRIF)

What is an RRIF?

A Registered Retirement Income Fund (RRIF) is a registered plan that helps you manage your retirement income. In simple terms, it’s what your Registered Retirement Savings Plan (RRSP) can become once you retire. 

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How does an RRIF work?

When you retire or turn 71, your RRSP can be converted into an RRIF. At which point, instead of contributing savings to it, you can begin withdrawing money from it for all those retirement adventures you have planned.

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Why invest in an RRIF?

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Shelter your savings

Just like the RRSP, savings in your RRIF aren’t taxed until they’re withdrawn, so they can keep growing faster for you.

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Control withdrawals

You can withdraw as much or as little as you want, as long as you take the minimum yearly requirement.

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Invest your way

You can customize your RRIF with many kinds of investments – mutual funds*, term deposits, stocks, bonds and more.

 
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When should I convert my RRSP into an RRIF?

You can convert your RRSP into an RRIF any time before the end of the year you turn 71, but there are some important factors to consider:

  • Do you want to keep saving? Once you’ve converted to an RRIF, you can’t make any more savings contributions.

  • Do you need the income? If not, it may be worth waiting and continuing to save tax-sheltered.

  • Will withdrawals affect your taxes? RRIF withdrawals are taxable, so they can bump you into a higher tax bracket.

If you’re not sure what’s right for you, we’re here to help!

 
 

Boost your RRIF know-how

Try our RRIF calculator

Our handy calculator helps you estimate the payments you can expect from your RRIF each year.

 

Your RRIF questions answered

No, you have three options for your RRSP savings:

  • Transfer them to an RRIF

  • Buy an annuity with them

  • Withdraw them

However, the final option is not generally recommended. This is because the withdrawn savings will be considered taxable income in the year you take them out, potentially increasing your tax bill significantly.

You’ll need to decide on an option by the end of the year you turn 71. If you’re not sure which is right for you, book a chat with one of our advisors. They’ll be happy to help you figure it out.

You don’t have to make any withdrawals in the year you set up your RRIF. After that, however, you must take out a minimum amount annually. This is based on your age as of January 1 each year. For example, if you’re 65 on January 1, you’ll need to withdraw 4% of your RRIF balance that year. If you’re 75, it will be 5.82%.

For a full breakdown of withdrawal minimums and advice on how to manage them, book a chat with one of our advisors.

Yes, any RRIF withdrawals are taxed as income. If you take out more than the required annual minimum, you’ll also need to pay withholding tax:

Amount above the minimum
Withholding tax rate

Up to $5,000

10%

$5,001 to $15,000

20%

More than $15,000

30%

For help minimizing tax on your RRIF withdrawals, book a chat with one of our advisors. They’ll be happy to help you build a personalized plan.

Yes, it’s up to you when and how often you make withdrawals from your RRIF. You’ll just need to bear in mind your annual withdrawal minimum and the withholding tax charged on any amounts over that minimum. 

Yes, you can choose to convert your RRSP into a single RRIF or multiple. However, if you choose the latter, you’ll need to take out the minimum withdrawal amount from each plan. So it’s often easier and more convenient to consolidate your RRSPs into one RRIF. 

 
 

Registered Education Savings Plan (RESP)

What is an RESP?

A Registered Education Savings Plan (RESP) is a registered plan that helps you and your loved ones save up to $50,000 for your child’s post-secondary education, tax-sheltered.

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How does an RESP work?

As long as your child lives in Canada and has a Social Insurance Number (SIN), you can open an RESP and contribute savings, boosted by government grants.

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Why invest in an RESP?

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Accelerate savings

Interest earned in an RESP grows untaxed until its withdrawn. At which point, it’ll be taxed to your child – who’ll likely owe little to nothing as a student.

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Benefit from grants

Your savings may be eligible for over $10,000 in RESP government grants. That’s a huge boost to your child’s education savings.

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Let anyone contribute

Parents aren’t the only ones who can contribute to an RESP. Family and friends can also add to your child’s savings for school.

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Make flexible withdrawal

Your child can use the savings for more than just tuition. Anything related to their education counts, including living expenses and transport.

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Invest your way

You can customize your RESP with many kinds of investments – mutual funds*, term deposits, stocks, bonds and even savings accounts.

 
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Is this registered plan right for me?

A Registered Education Savings Plan is a great tool for helping children get ahead in life. It’s particularly useful when you have young children. There’s no age limit on opening an RESP, but saving early ensures you can maximize provincial and federal government grants.


Ready to get set up?

 
 

Boost your RESP know-how

Try our RESP calculator

Our handy calculator helps you plan how much to save for your child’s education costs.

Give it a go

 

Your RESP questions answered

There’s no annual RESP contribution limit. You can contribute as much as you like to your plan, up to a maximum of $50,000 per child. But, to maximize the Canada Education Savings Grant (CESG), we recommend putting in at least $2,500 a year.

Note: You can make contributions into an RESP until 31 years after it was opened.

Once your child is enrolled at a qualifying school, you can begin withdrawing money to pay for their expenses. These are called Education Assistance Payments (EAPs). They can be used for tuition, course materials and textbooks, living expenses, transportation and more – anything related to your child’s education.

There’s an $8,000 RESP withdrawal limit in the first 13 weeks of schooling. After that you can withdraw any amount your child needs. Just bear in mind that they’ll be taxed on withdrawals. But, since they’re students, they’ll likely owe very little if anything.

Universities aren’t the only institutions eligible for RESP withdrawals. Your child can use RESP savings for a wide range of educational programs – trade schools, apprenticeship programs, colleges, even international institutions can qualify.

For a full list of qualifying Canadian schools, take a look at the Government of Canada’s website:

To qualify for international study, your child must have been enrolled in the course for at least 13 consecutive weeks (3 weeks for university programs).

There are a number of RESP government grants you may be eligible for:

Federal RESP government grants
  • Canada Education Savings Grant (CESG)
    • Who qualifies? Children under 18, who live in Canada and have a Social Insurance Number (SIN).

    • How much is it? The government matches 20% of your RESP contributions up to a maximum of $500 a year and $7,200 in total. Modest income families qualify for more grant funds.

  • Canada Learning Bond
    • Who qualifies? Children under 15 from modest income families.

    • How much is it? The government contributes $500 to your RESP in the first year you qualify and $100 each year after that.

Provincial RESP government grants
  • BC Training & Education Savings Grant (BCTESG)
    • Who qualifies? Children between six and nine years old, who live in British Columbia.

    • How much is it? The government will provide a one-time $1,200 contribution to your RESP, whether you make RESP contributions or not.

Want to make sure you maximize these RESP government grants? Book a chat with one of our advisors. They’ll be happy to help ensure your child gets all the extra incentives they qualify for.

No, sadly RESP contributions are not tax deductible.

In this situation, you’ll need to return any remaining RESP grant money to the government. But there are several things you can do with your unused RESP contributions:

  • Contribute to your RRSP – If you have contribution room, you can transfer up to $50,000 from your RESP into your RRSP without being taxed. To do this, your child must be over 21 and the plan must have been open for at least 10 years.

  • Change the beneficiary – If there’s another child you want to support, you can transfer the RESP over to them. How this is done depends on the type of plan you have (individual RESP, Family RESP, or Group RESP).

  • Close the RESP – This option comes with some tax implications. While your contributions can be withdrawn tax-free, any interest earned on them will be taxed at your current rate with a 20% penalty on top. To be eligible for this option, your child must be over 21 and the plan must have been open for at least 10 years.

Not sure what you want to do? Book a chat with one of our advisors. They’ll be happy to help determine the best option for you. And don’t forget, you have time to decide – the RESP can stay open for up to 35 years before it expires (or 40 years for certain specified plans).

 
 

Registered Disability Savings Plan (RDSP)

What is an RDSP?

A Registered Disability Savings Plan (RDSP) is a registered plan that helps those with disabilities and their loved ones save for long-term financial needs, tax sheltered.

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How does an RDSP work?

If you or a family member are under 60 and qualify for the Disability Tax Credit (DTC), you can open an RDSP and save up to $200,000, boosted by government grants.

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Why invest in an RDSP?

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Accelerate savings

Interest and capital gains earned in an RDSP aren’t taxed until they’re withdrawn, helping your savings grow faster. 

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Benefit from grants

Your savings may qualify for government grants, including the Canada Disability Savings Grant and Bond. 

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No benefits impact

RDSP withdrawals don’t factor into eligibility for BC Disability Benefits. So they won’t affect government assistance.

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Withdraw for any need

There are no restrictions on how RDSP savings are spent. They can be used for any need the person has.

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Let anyone contribute

Family members aren’t the only ones who can contribute to the RDSP. Friends can also add to the savings.

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Invest your way

You can customize the RDSP with many kinds of investments – mutual funds*, term deposits, stocks, bonds and more.

 
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Is this registered plan right for me?

Setting up a Registered Disability Savings Plan is a great way to ensure long-term financial security for a person with disabilities. It’s particularly beneficial for those who can start saving early to maximize the benefits of government grants. 

Ready to get set up?

 
 

Boost your RDSP know-how

Try our investment calculators

Our handy calculators help you figure out which solutions make the most sense for your goals.

 

Your RDSP questions answered

No, there’s no limit on how much you can contribute to an RDSP each year. But there is a maximum total limit of $200,000.

No, sadly RDSP contributions aren’t tax deductible.

There are two federal RDSP government grants you may be eligible for. They both depend on your household income:

  • Canada Disability Savings Grant – If you qualify, the government will add up to $3,500 a year to your RDSP and $70,000 total.

  • Canada Disability Savings Bond – If you qualify, the government will contribute up to $1,000 a year to your RDSP and $20,000 total, whether you contribute or not.

Want to find out more? Book a chat with one of our advisors. They’ll be happy to help ensure you access all the extra government incentives you can.

You can contribute to an RDSP up until the end of the year in which the plan’s beneficiary turns 50. 

The plan’s beneficiary can withdraw funds in two ways:

  • Annual withdrawals – These are known as Lifetime Disability Assistance Payments (LDAPs). They begin by the end of the year in which the beneficiary turns 60 and continue for the rest of their life.

  • One-time withdrawals – These are known as Disability Assistance Payments (DAPs). They can be made any time after the RDSP is set up.

However, there are a few rules around RDSP withdrawals, so it’s best to chat with an advisor before taking money out.

Have more questions?

Don’t hesitate to reach out. We’re just a live chat, video, or phone call away when you need us.

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Ready to set up your registered plan?

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Life gets busy, but don't let that stop you achieving your goals. Whether you’ve got $50 or $50,000, we want to help power your possible – and we'll come to you to do it.

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*Mutual funds are offered through Credential Asset Management Inc. Mutual funds and other securities are offered through Credential Securities, a division of Credential Qtrade Securities Inc. Credential Securities is a registered mark owned by Aviso Wealth Inc.