Save Taxes and Accumulate More Retirement Income

Author: Ivon T. Hughes

This investment strategy applies to you if you are contributing your available maximum limit to RRSPs and you are now accumulating non-registered money for retirement.

The problem with non-registered funds is that you have to pay taxes on the investment growth. This effectively decreases the total return on the funds you have to invest. Over the lifetime of the investment, the aggregate tax loss will be many thousands of dollars. The cumulative taxes paid on $100,000 of non-registered savings invested into an equity mutual fund would amount to $165,306 over 30 years! (More details and assumptions are available on our website).

The Retirement Income Maximizer solves this problem using eUL - a universal life plan. This strategy minimizes the cost of term insurance and maximizes your investments in a eUL plan where the investment growth is tax-deferred. It uses as much of your deposits as the Income Tax Act allows for wealth accumulation.

In most cases, your cumulative cost for insurance over the long term will be less than the taxes you would otherwise lose on a non-registered investment. In other words, the cost of insurance is significantly less than the tax.

We want to help you save tax! If you have not taken a serious look at using universal life to reduce your taxes in the last five years, I'm sure you will be impressed. Contact us for more information or run your own projection to calculate your potential tax saving yourself at our website.

Original article on Trustco.ca