Important Facts about Registered Retirement Savings Plans

The constant need for financial security in today’s world encourages us to be on the look-out for savings plans that could benefit us the most. A popular choice among investment-savvy Canadians is the Registered Retirement Savings Plan, otherwise known as an RRSP. Here are some important facts you need to know about this plan to help you out:

1. Savings on tax – The contributions you make to your Registered Retirement Savings Plan is tax deductible. This means that this plan allows you to make a significant amount of savings on taxes. For example, if you make a contribution of $5000 from your taxable income of $60,000, you should be able to save approximately $1,500 depending on the province in which you’re residing.
   
   
2. Varieties of plans – One of the best features of the RRSP is that you’re not just limited to contributing to your own account. You have options to set up an account wherein contributions are made by your employer and deducted from your paycheck. You can even go for the spousal RRSP, which lets a spouse with higher income make contributions to the account of the other spouse.
   
   
3. Self-directed RRSP – You can opt to set up a self-directed RRSP that can bundle up a wide variety of plans together. Through this option, you get to make investments such as mutual funds, guaranteed investment certificates, stocks, gold and/or silver bullions, and many more.
   
   
4. Starting early – Since RRSPs do not have a minimum age limit, it is recommended that you start early for higher returns. You can continue making contributions up to the age of 71 if you’re still earning then. After you’ve reached the age limit, you have the option to buy annuity, switch to a different kind of savings plan, or withdraw the amount in cash.

Whether or not you wish to start a Registered Retirement Savings Plan, make sure you do a thorough research about the plan. This can guide you in reaching a decision that will benefit you in the future.

What You Need to Know about Registered Education Savings Plan (RESP)

The Registered Education Savings Plan or RESP can be defined as a contract or an agreement between two parties in which an individual (subscriber) can declare one or more beneficiaries, agreeing to make financial contributions for them. The agreement requires the other party (promoter) to pay EAPs or educational assistance payments to the beneficiaries. Let's take a quick look at some important facts you need to know about this savings plan:

• Normally, you can make contributions to family plans in the case of beneficiaries who are below the age of 31 at the time of contribution. You can, however, make transfers from one family plan to the other even for beneficiaries over the age of 31.

• Since 2007, there has been no limit on the annual contributions you make to RESP and the lifetime limit of contributions that can be made for one beneficiary is $50,000. 

• However, any payment you make under a designated provincial program or the Canada Education Savings Act will not be considered when determining whether or not the lifetime limit has been exceeded.

• When excess contributions are made, subscribers have to pay taxes of 1% per month on their share if the excess has not been withdrawn by a certain deadline. So, you can easily cut down on the liable tax amount by withdrawing any excess contribution.

• If, for some reason, the promoter does not pay out the contributions you have made to the beneficiary, you will receive the accumulated sum by the end of the contract. You would not need to declare this amount as your income.

These are just some of the basic facts you need to know about the Registered Education Savings Plan, so you can get a rough idea of the agreement before making your contributions. Whether you wish to contribute to the RESP for your children, spouse, or any other beneficiary, you can learn more about the plan to help you make the right decision.

                                                                                                 

                                                                                                                                            

Enjoy Your Holidays to the Fullest

The schools are off and families are in the midst of summer holidays. It is travel time for most families. An estimated 29 million Canadians are likely to travel within and outside Canada this summer, making travel insurance an important subject that needs to be tackled right away. Here are some essential travel insurance tips to help you enjoy your holidays to the fullest.

Go for coverage not the price

When it comes to travel or any other form of insurance, it is always a good idea to go for a plan that provides greater coverage even if it means a higher premium. It is okay to compare policies and ask your insurance provider to match the rates a competitor may be providing. However, always remember that coverage is what you need most and make it your first priority

Learn as much as possible

It is not just enough to simply go through the insurance documents before signing them. You must first try to learn from your insurance provider about the exact details covered by your policy, ask about anything you don't understand and sign only after you are satisfied in every possible way.

Disclose your travel plans

It is very important to disclose your travel plans in full detail to your insurance provider. You can get a better service and the best insurance package only if you disclose all of your travel plans to your insurance provider. Insurance may not be covered for certain activities or in certain places under certain circumstances. An insurer can only guide you if he is fully aware of your plans.

Get referrals

Finally, you must know that no one can guide you better than someone you are familiar with. So, if you know anyone who travels frequently because of business or any other reason, ask them about their travel insurance arrangements. These travelers will often be familiar with insurance policies, who provides the best service and so on.

Every person may need a unique insurance coverage depending on their travel needs and we have something for everybody. From business travelers to backpackers, rest assured that you are insured when you go outside Canada.

5 Travel Tips

Vacations are more than a luxury today – they are a well-needed break for families caught up in the hustle and bustle of everyday life. Here are 5 travel tips to help you jumpstart your best vacation yet:

1. Keep everyone entertained. The ride to your travel destination is what is usually the most boring part, have some activities ready for your kids and you to make this time as a family fun time. Pack whatever you need – magazines, ipods, and games to keep the family entertained.
2. Have important documents handy. This includes your passport, records of travel insurance, and list of medications you take. In fact, a good tip is to take a photo of your travel insurance so that you have the contact information if needed.  Also, reading what your travel insurance covers beforehand can help you make informed decisions when you partake in risky activities during your trip. Having travel insurance not only gives you peace of mind, but gives your loved ones peace of mind to let you travel.
3. Give a copy of your contact information to someone you trust in Canada if they need to contact you – including numbers and addresses of where you are staying and your ticket details. It’s also a good idea to find out where the closest Canadian embassy is in where you are traveling.
4. Pack your medication and any refills you need. If you have a drug plan, order enough supply of your medication before you need. It’s a good idea to visit your doctor before you travel and get any vaccinations you may require before you leave.
5. A wise rule of packing for vacations is to pack only half of what you want to pack. People usually over pack clothes – this is just extra luggage to carry around. Pack all your necessities and leave everything you don’t think you will use behind.

Enjoy, have a good time and have a great vacation!

Visiting the Cottage or the US?

Are you planning to visit the cottage this summer or traveling outside of Ontario? One question you may have asked is, do you need travel insurance if you are traveling within in Canada?

For the most part – you are in good hands. We are lucky to live in a country that has great health coverage. Many of the same expenses are covered province to province, and you are most likely to reimburse of your medical costs albeit a few exceptions (i.e. ambulance).

However, traveling outside Canada is another story, even if you are just visiting the States. Say you get injured, break a leg and have to stay the night in the States hospital that can easily be $5000. OHIP will only reimburse you for about $200.

Canadians take 29 million trips annually outside the country, and when they travel to the States, many don’t always think of travel insurance, but it is important. Travel insurance is inexpensive, but it offers many benefits.  But mostly, having traveling insurance offers you peace of mind that lets you really enjoy your vacation.

Types of Super Visa Insurance

Last week we spoke about insurance being a pre-requisite for entry through Super Visa, but navigating what insurance is offered sometimes can be tricky. We’ve broken it down for you. There are two main types of Super Visa insurance: Emergency Medical and Expatriate Health Plans. 

Emergency Medical

You can think of this insurance almost like travel insurance for Super Visa entries. This insurance covers unforeseen medical emergencies – and cover he initial emergency medical care, and a limited number of follow up consultations after a person has been declared able and medically fit to return to their country of origin. 

Expatriate Health Plans

The second type of insurance is the one that is best for ailing parents with medical concerns. These plans cover both initial medical care, plus medically necessary continuing care until the term of the policy and eligibility. 

It is important to get clarification on what you policy covers and get pre-approval. Some plans offer no coverage of pre-existing conditions, while others offer coverage for stable chronic conditions. The cost of insurance is dependent on the existing medical condition, and anticipated needs. If your parent of grandparent has pre-existing medical concerns, it is important you choose to purchase an insurance that will cover their treatment and give you both the best peace of mind. 

Applying for a Super Visa?

It’s great to be able to have parents or grandparents visit and stay with you in Canada for an extended period of time – often times, a trip of 1 or 2 months is not enough time. The new Canadian Super Visa however, can change that by allowing your parents or grandparents to remain in Canada for 24 months at a time, without renewing their status. This visa is valid for 10 years. 

One of the key requirements for obtaining the Super Visa for Canada is insurance. Since many of the times parents and grandparents are elderly, the cost of medical care and hospitalization can be pricey. This is why Super Visa applicants must submit proof that they have purchased private medical insurance from a Canadian insurance company that is valid for a minimum of one year and offers a minimum of $100,000 in coverage for health care, hospitalization and repatriation. Regardless of it being mandatory, the need to purchase this insurance to protect your elderly loved ones is important in an event of needing medical care. 

For more information about applying for the Super Visa, visit the Government of Canada website.