Registered Retirement Savings
A Registered Retirement Savings Plan (RRSP) is one of the best investments that can be made in saving for retirement. They are tax deductible deposits made in a registered investment plan. Most common plans are GIC, Bonds, Mutual Funds and Segregated Funds.
Some advantages of RRSPs include :
- Tax Deductability
- Tax Sheltered and compounding growth.
Although mutual funds are a very popular form of investment, they may not be appropriate for every client. Other options available may be of particular interest to clients who are very risk shy and are conservative investors.
For those clients who desire some form of guarantees on their investments, there are choices aside from mutual funds and GICs! That choice is SEGREGATED FUNDS (often called Seg. Funds )
If you buy RRSPs from a bank or a mutual fund company, you might end up losing your money in a market downturn because the bank or mutual fund companies do not provide guarantees on their RRSPs.
RRSPs from Insurance companies are called Seg Funds. They come with important guarantees on your deposit at maturity and at death regardless of what happens in the markets and the funds.
Segregated Funds
Segregated funds, often referred to as “Seg” funds, offer a similar range of pooled investment options (conservative, balanced, modest growth, aggressive growth etc.), but within what is technically an insurance product.
Segregated funds take the advantages of mutual funds and combine them with insurance features, guaranteeing minimum 75% to 100% of your investment at maturity and at death before maturity.
The bypass of probate fees, executor fees and legal fees are also very attractive features of a Seg. Fund. This means that the investor will not have to worry about their heirs having to endure delays at the death of the investor or suffer losses due to a down market.
Seg Funds may also offer potential creditor protection. For the risk shy investor, the deposit and death benefit guarantee as well as the maturity guarantee are very attractive and powerful features of a segregated fund contract. They can provide protection from market volatility upon maturity or upon death. This also means that the investors may not worry about their heirs having to endure delays or suffer losses due to a down market.
As at this moment, only insurance-licensed advisors are approved by law to sell segregated funds. If you would like more information about Seg.Funds and how they can complement your financial planning process, please contact one of our advisors, agents or brokers.
