Are you on track?
Find out how much you need to contribute to live the retirement you want.
While each person is unique, he or she undoubtedly shares some characteristics with others.
When you're just years from retirement, focus at this point should continue to be on maximizing contributions and maximizing growth – but now is the time to be even more conscious about protecting on the downside as you can’t afford to have a major setback. Setbacks can be costly as they require time to recover from.
If you’ve maxed out your RRSP contribution, talk to your financial advisor about a TFSA. With this registered account, your money grows tax-free. But what if you’ve maxed out your TFSA contribution as well?
Another tax-deferred option is a corporate class mutual fund. Each unit of a corporate class mutual fund represents a ‘share’ in the corporation. As an investor, you can purchase one fund and switch to another in the corporation at any time, without triggering any immediate tax consequences. In other words, you can effectively defer tax. Let’s look at two investors who both invested $100,000 and decided every three years that their investment needed to be adjusted. For simplicity, let’s assume they make the same switches each time:
Equity markets experience greater than 10% drops more frequently than 10%+ gains. This makes it even more important to focus on minimizing extreme losses than chasing extreme gains. Losing less can mean winning more.
The 2015 AGF Investor Study was conducted online among a sample of 1,238 Canadians ages 18 and older with some amount of investible assets (excluding real estate) and currently involved in mutual funds/stocks/bonds investments/RRSP/TFSA. The survey was administered from August 10 to August 23, 2015 by Harris Poll. As the study was completed using Harris Poll's proprietary online panel, it is precluded from reporting a margin of error. The margin of error for a representative sample of this size (n=1,238) would be ± 2.8 per cent, within a 95% confidence interval.
The information contained in this material is designed to provide you with general information related to investment alternatives and strategies and is not intended to be comprehensive investment advice applicable to the circumstances of the individual. We strongly recommend you to consult with a financial advisor prior to making any investment decisions.
This is not intended to provide tax advice. AGF Investments Inc. strongly urges investors to consult with a tax advisor to discuss their particular circumstances.
Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. The indicated rates of return are the historical annual compounded total returns including changes in share and/or unit value and reinvestment of all dividends and/or distributions and do not take into account sales, redemption, distribution or optional charges or income taxes payable by any securityholder that would have reduced returns. Mutual funds are not guaranteed; their values change frequently and past performance may not be repeated.
The All World Tax Advantage Group is a mutual fund corporation that currently offers approximately 20 different classes of securities. Investing in any of the classes within the group offers the following potential benefits and features: deferral of capital gains tax on transfers between classes, potential capital tax savings for corporate investors and fund diversification by investment style, geography and market capitalization. For a more detailed explanation, please see AGF.com/disclaimers.
Publication date: 26 November 2015