Fidelity offers a broad range of savings and retirement income options to help investors meet their goals at all life stages:
Registered Retirement Savings Plan (RRSP)
- Contributions can be deducted from income to reduce taxes.
- Tax on investment income earned inside an RRSP is deferred until it is withdrawn, allowing earnings to grow faster than they would in a non-registered account.
An RRSP can contain a variety of different investments, including stocks, bonds, mutual funds, GICs, contracts and mortgage-backed equity.
Tax-Free Savings Account (TFSA)
Useful for saving for both short- and long-term savings goals. Like RRSPs, investment income such as interest, dividends and capital gains, is not taxed when earned in a TFSA. Unlike RRSPs, contributions are not tax deductible, but funds can be withdrawn tax free. Any unused room can be carried forward and withdrawals can be recontributed at a later date.
Locked-in Retirement Account (LIRA) or Locked-in Retirement Savings Plan (LRSP)
Registered Education Savings Plan (RESP)
Designed to help save for a child’s post-secondary education. Contributions are not tax deductible, but earnings accumulate tax-deferred while in the account. Under the Canada Education Savings Grant (CESG), the government also contributes a certain amount to plans for children under 18. Once enrolled for post-secondary education, the subscriber begins to withdraw the funds. The portion of the withdrawal which is a return of the original contribution is received tax free. The portion of the withdrawal that is accumulated income (which includes the grant) is included in the child’s income and taxed at his or her marginal rate -- which usually means there is little or no tax to pay.
Registered Retirement Income Fund (RRIF)
Life Income Fund (LIF)
Provides retirement income. Money from a LIRA/LRSP can be transferred into a LIF so that investments can continue to grow tax-deferred until withdrawn. Each year, a minimum amount must be withdrawn and taxed at the investor’s marginal rate. In addition, there is a maximum annual withdrawal amount. In some provinces, a LIF must be converted to an annuity when the investor reaches a specified age.
Locked-in Retirement Income Fund (LRIF)
Like a LIF, money from a LIRA/LRSP can be transferred to a LRIF. An LRIF provides income during retirement, but with no requirement to convert the fund to an annuity. Also, withdrawal limits are calculated differently.