When you retire, will you have saved up enough for retirement to do the things you want to do?
Are you going to travel? Start a small business? Take up hobbies you never had time for when you were working full time?
Whatever you end up doing, it's probably going to cost some money. And yes, it is possible that you'll have a pension, but it will be a big drop compared to what you're used to making. Until CPP and Old Age Security kick in, the ballpark amount will be about half of what you made while you were working full time. So how do you pay for all the things you'll finally get to do? With the Capital Group RRSP!
The Capital Group RRSP gives you access to one of the best investment plans on the market today.
How is it better?
1. The Capital Group RRSP is available via Payroll Deduction. This means that your employer can deduct your RRSP Contribution from pre-tax income and you get your tax savings back on every paycheque! See the Payroll Deduction chart below for more details!
2. It has none of the transaction fees you'd normally see at the bank or other financial services companies. This means that there are no front-end, annual service, set-up, withdrawal or redemption fees. Or put another way, no cost to start investing, make changes or take money out. You get all the benefits of a self-directed plan without any of the usual costs!
3. Unlike the Deferred Sales Charges (DSC) that you'd commonly see through the bank, your money is not locked in -- you can make changes or pull it out with no cost or penalty.
4. You get access to some incredible investment options, including the investment arms of every major bank, wholesale money managers and private fund managers who you would never be able to access on your own.
How Payroll Deduction Works:
Basically, you get your tax savings back on every paycheque -- or put another way, you pay less money at the time that you contribute! For example:
How to invest in the Capital Group RRSP
Investing is not always the simplest concept. For some folks it comes easy and for others it may feel a little overwhelming. Or you may fall somewhere in between!
Over the years we have worked with world class investment managers and with that we have brought a fund into our Capital Group RRSP that makes investing easy and approachable. This is the fund for the investors who feel like they want to leave the big investment decisions up to the professionals.
We consider the Fidelity ClearPath fund our “default fund”, this is a portfolio of investments that you invest in and sit back and let your money grow and ride the markets.
Sounds pretty good? Here’s how it works.
Fidelity Clearpath have complex investment vehicles in the back end that are incredibly simple to access for you as an investor with the Capital Group RRSP. They simply look at your age and the year you plan to retire and build a plan around that. When you have a lot of time before retirement, they create a product mix that's more aggressive so that you can grow as the markets shift. But every five years, they automatically become a little more conservative, so that by the time you get closer to retirement, they're more focused on protection.
- Early in your career = focused on growth with more aggressive funds (higher risk investments)
- Later in your career = focused on protection with more conservative funds (lower risk investments)
These adjustments will automatically happen behind the scenes. You could think of it as the slow cooker of investing. Set it up and let it go!
This portfolio is made up of a mix of investments that provide balance, ex: short term investments, bonds, and equities. The chart below is a sample of the investment mix that your RRSP would have throughout your career.
Having diversification in your investments is something that we talk to many of our clients about.
You can achieve diversification with the Fidelity ClearPath fund. Investments at every stage are made up of a mix of different categories, in order to capitalize on the upside of growing markets, but also to protect you when one kind of investment goes down as part of its normal cycles – essentially “spreading out the risk”. The pie chart below shows an example of this mix of different categories.
Do you consider yourself a savvy investor?
We get that there are many different types of investors out there and the default fund may be not quite right for some. If you are interested in hand picking some or all of your funds – we can do that with you. As an investor looking to make the decisions you have the choice of 44 different investments inside the ATA Group RRSP, selecting them in whatever percentage you choose. We have financial advisors here to work with you to build your portfolio.
Feel like you fall somewhere in between these two types of investors?
Yes, we are happy to work with you to make a few key decisions but with a bit more guidance. The Portfolio Fund is a Balanced Fund that gives you the choice of 16 different investments and to help you determine which funds to choose there is the Investment Personality Questionaire. This is a resource available to you that can help determine your investment risk level, you can find it here.
The sooner you start investing the more your money will grow in the background. Contact us today to take advantage of this incredible plan!
Capital Group Registered Retirement Income Fund (RRIF)
When retirement hits and it's time to start drawing an income from your RRSPs, how do you do that?
Capital Group Tax Free Savings Account (TFSA)
Do you have a place to grow your money tax free? That's what the Capital Group Tax Free Savings account was built for.