Retirement planning

A Registered Retirement Savings Plan (RRSP) is a type of investment vehicle that helps you grow your retirement savings. One of the main benefits of an RRSP is that you defer paying taxes on the money you contribute today and any investment income earned, until years later when you withdraw your money in retirement.

RRSPs allow you to make tax-deductible contributions each year, either in a lump sum or through regular Pre-Authorized Contributions (PACs). The maximum you can contribute each year is set by the Canadian government and depends on your income.

A Tax-Free Savings Account (TFSA) is an all-purpose savings account that offers the flexibility to save for many goals in one account. Your savings grow over time tax-free, and you can withdraw your money whenever you need it.

Your TFSA is a registered account that can hold a variety of savings and investment products within that account, such as cash, GICs, mutual funds, and even stocks and bonds.

Every year you gain contribution room in your TFSA. As of January 2024, you can contribute $7,000 annually in your TFSA, plus any unused contribution amount you may have accumulated. 

A Guaranteed Investment Certificate (GIC) is a secure, low risk investment that guarantees 100% of your original principle, while earning annual interest at a fixed or variable rate based on a specific formula. Like savings accounts, GICs are CDIC eligible at most financial institutions.

A mutual fund is a professionally-managed investment that pools money from different investors to invest in stocks, bonds, short-term money market instruments or other securities. They’re managed by experienced portfolio managers, who decide which investments to hold and when to buy and sell those investments. Mutual funds help diversify risk by investing in a range of different securities, which is really another way of saying that you won’t be putting all your eggs in one basket. If one investment is down, those losses can potentially be offset by another of the fund’s holdings.

By investing in a mutual fund, you get access to a large number of securities, which might be otherwise difficult or too expensive to access or manage on your own. Mutual funds can also be bought and sold daily on a business-day basis, giving you easy access to your money. All in the convenience of a single-ticket investment. You can get started with an initial investment as little as $500 – or even less in many cases.

The amount of money you decide to put into your investment products will depend on your personal income, timeline, and goals. Please speak with our Scotiabank financial advisors for advice on financial planning. With a simple conversation, we’ll get you on track to accomplish your financial goals.

The short answer is that much depends on your unique investment goals and preferences.

A Scotiabank advisor can work with you to create a customized financial plan complete with investment recommendations that may include mutual funds that align with your goals, time horizon and risk tolerance