Retirement Savings Plans
Registered Retirement Savings Plan (RRSP)
One of the best ways to ensure that you have the money you need to enjoy your retirement is to stick to a simple consistent investment plan. That’s where Fisgard’s All Canadian Registered Retirement Savings Plan ( RRSP ) comes in. Our clients have experienced steady dependable growth – building a retirement nest egg that is ready when you are.
Spousal Registered Retirement Savings Plan (SRRSP)
A Spousal Registered Retirement Savings Plan ( SPRRSP ) is a retirement savings strategy where one spouse makes the contributions but the other spouse ‘owns’ the plan. The contributing spouse receives a deduction from his or her taxable income, whereas funds received out of the plan are usually included in the receiving spouse’s income.
A spousal RRSP is advantageous if the contributing spouse is likely to have the higher income at retirement, giving rise to an income-splitting benefit. If a retirement allowance has been received, it is not possible to make an additional contribution to a spousal RRSP. Another advantage of a spousal RRSP is that the RRSP maturity deadline is based on the age of the spouse.
Contributions are not allowed after the end of the year in which a Plan owner reaches age 71. Therefore, if an individual is too old to contribute to his or her own RRSP it may be possible to continue to contribute to a spouse’s RRSP. A further benefit is that of creditor protection from a spousal contribution. Because the spouse owns the RRSP, funds deposited by the contributor are shielded from actions taken against the contributor.
Individual Pension Plan (IPP)
An Individual Pension Plan (IPP) is a one-person Defined Benefit Pension Plan (DB Plan) which allows the plan member to build a retirement fund on a tax-deferred basis. With the IPP your employer (most often the company you own) contracts to pay you a certain amount each month after you retire. The company puts money into a pension fund to cover its promise to you. The money is held ‘in trust’ by a financial institution, not by your employer.
It is up to your employer to make sure that there is enough in the pension fund to make payments to you after you retire. The trustees of the pension fund manage the investment, so an IPP must conform to the Canadian Income Tax Act and regulations as well as the requirements of the Canada Revenue Agency (CRA) with respect to Defined Benefit pension plans.