Yes, that old thing. With the popularity of the Tax-Free Savings Account, the Retirement Savings Plan (RSP) does not seem to evoke the same wow factor it once did. The truth is, depending on what you want to save for should determine the way you should go about saving for it.
An RSP from Equitable Life can support your goal of homeownership, further education, and retirement. An RSP can even force you to save money; and an Equitable RSP can offer built-in guarantees but more on that later.
Home Buyers’ Plan: This feature allows you, a first-time home buyer, to withdraw up to $35,000 tax-free in a calendar year to buy or build your first home. The repayment period begins the second year after you withdraw the funds and you have up to 15 years to pay the money back. With home prices on the rise, why not tap into additional resources to increase your down payment.
Lifelong Learning Plan: This feature allows you to go to school or go back to school. Whether for you or your spouse, you can withdraw up to $20,000 tax-free to cover tuition and education expenses. The repayment period gives you 10 years to repay the money you borrowed.
Retirement: Even though it may seem like a million years away, the reality is, contributing to your RSP now gives your money time to grow. While RSP contributions provide tax deductions which can help later in life, RSP contributions can also offer up an immediate tax refund. A refund you can use to contribute back into your RSP or a refund you can use as a reward for being such a good saver!
Remember when I mentioned that an RSP can force you to save? Withdrawing money from your RSP when it does not relate to homeownership or education will cost you. The money becomes taxable and is added to your annual income. Think of it as a security system for when you have a moment of weakness to spend your savings.
Oh, and those built-in guarantees? Equitable Life offers an investment product that provides guarantee classes that allow you to choose the level of protection that is right for you. The guarantee protects part of the money you invest (75% to 100%). So even if the underlying investment loses money, you are guaranteed to get back some or all your principal investment. Pretty cool huh!
Learn how to build an Equitable Life RSP into your overall financial plan. Talk to your financial advisor today.