Registered Education Savings Plans (RESPS)
Globe and Mail business columnist Rob Carrick published his estimate for the cost of a four-year undergraduate degree at an out-of-town school in 15 to 18 years: $92,292! An RESP is the only vehicle that will allow your clients to save for a child’s post secondary education on a tax-deferred basis. RESP rules are complex, so the table below summarizes some of the more important restrictions on this type of plan only.
Canada Pension Information
The Canada Pension Plan is a contributory, earnings-related social insurance program. It ensures a measure of protection to a contributor and his or her family against the loss of income due to retirement, disability and death.
There are three kinds of Canada Pension Plan benefits:
- disability benefits (which include benefits for disabled contributors and benefits for their dependent children);
- retirement pension; and
- survivor benefits (which include the death benefit, the survivor’s pension and the children’s benefit).
The Canada Pension Plan operates throughout Canada, although the province of Quebec has its own similar program, the Quebec Pension Plan. The Canada Pension Plan and the Quebec Pension Plan work together to ensure that all contributors are protected.
Old Age Security Pension (OAS)
The Old Age Security pension is a monthly benefit available, if applied for, to most Canadians 65 years of age or over. Old Age Security residence requirements must also be met. An applicant’s employment history is not a factor in determining eligibility, nor does the applicant need to be retired. Old Age Security pensioners pay federal and provincial income tax. Higher income pensioners also repay part or all of their benefit through the tax system. For more information please click on the link below.
Guaranteed Income Supplement (GIS)
The Guaranteed Income Supplement is a monthly benefit paid to residents of Canada who receive a basic, full or partial Old Age Security pension and who have little or no other income. Guaranteed Income Supplement payments may begin in the same month as Old Age Security pension payments. Recipients must re-apply annually for the Guaranteed Income Supplement benefit by filing an income statement or by completing an income tax return by April 30. Thus, the amount of monthly payments determined for the year may increase or decrease according to reported changes in a recipient’s yearly income. Unlike the basic Old Age Security pension, the Guaranteed Income Supplement is not subject to income tax. The Guaranteed Income Supplement is not payable outside Canada beyond a period of six months, regardless of how long the person has lived in Canada. For more details click on link below.
Allowance and Allowance for the survivor
The Allowance, which also includes an allowance for persons whose spouse or common-law partner has died, is paid monthly. It is designed to recognize the difficult circumstances faced by many surviving persons and by couples living on the pension of only one spouse or common-law partner.
Recipients must re-apply annually. These benefits are not considered as income for income tax purposes. The Allowance is not payable outside Canada beyond a period of six months, regardless of how long the person lived in Canada. Please click on link below for more information.
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We are obligated to inform you that the product descriptions and information that follow are intended for educational purposes only and are not to be considered as a solicitation to purchase any security.
Commissions, trailing commission, management fees, and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. To obtain a prospectus, or further information, please contact our office. Offers to purchase securities must be made through a registered mutual funds representative. Our Web Pages are under constant revision and subject to change without notice. Due to the dynamic nature of the mutual fund industry, we can make no guarantee as to the accuracy of the information presented.
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