10.3.1 Income from savings

From: Financial Consumer Agency of Canada

Did you know?

  • 62 percent of Canadians have investments set aside for the future.
  • 55 percent have investments in a registered retirement savings plan, a registered retirement income fund or a pension plan.
  • 21 percent have investments in a tax-free savings account, and an equal number have investments outside of these plans.
  • 38 percent Canadians do not have any investments set aside for the future.

There are many options for saving money for your retirement.

  • You can save money in a savings account. These accounts may pay very low rates of interest.
  • You can save money in registered savings plans, such as registered retirement savings plans (RRSPs) and tax-free savings accounts (TFSAs). These allow you to save while avoiding or deferring some of the taxes you pay.
  • You can invest money in unsheltered vehicles. These are investments or accounts that do not shelter your money from tax. Returns may be guaranteed, or they may not—and some types of investment may lose money.
  • You can purchase an annuity, a type of investment in which you pay a lump sum up front and then receive a set amount of money each month over many years after you retire.

As well, you may gain funds from the sale or rental of your family home or other property, which you can invest or use to live on.

Most people save in a variety of ways. However you save, the key is to start early. The sooner you start, the more you will accumulate when it comes time to retire.

See the video, How to save for retirement for more information.

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