If your savings are sitting in a bank account, they’re likely earning a low interest rate. That means it could take a very long time to reach your savings goals. Happily, your investment advisor can help make your money work much harder for you.
There are two ways your advisor will help make this happen. The first is by giving you great investment planning advice. At no cost to you, your advisor will work with you to help identify all of your savings goals, prioritize them and show you the best ways to work toward reaching them.
Secondly, your advisor will give you access to investment plans and funds that offer distinct advantages that aren’t available to the public ─ like very low fund fees that can help your savings grow faster. These special investment plans and funds can help you save for a variety of different objectives, including:
Saving for Retirement
One of the best ways to save for retirement is by opening an RRSP (registered retirement savings plan). An RRSP is an investment plan that’s registered with the federal government, which holds investments that you choose and purchase.
Unlike most other types of investment plans, money earned in an RRSP isn’t taxed while it’s in the plan — which means your savings for your retirement years can grow faster. In addition, the government gives you a tax break each year you make a contribution to your RRSP, so you’ll pay less income tax now.
Your investment advisor will help you set up your RRSP and help you choose investments within it that are appropriate for your personal needs.
Saving for Your Child's Future Education
Just as an RRSP is a great tool to save for retirement, an RESP (registered education savings plan) is an excellent way to save for a child's future university or college education. Not only is investment growth in the plan sheltered from tax, the government will match a portion of investment contributions through generous grants.
Your advisor will help you set up the plan, assist you in selecting appropriate investment funds, inform you about all applicable grants for which you may qualify and help you with the paperwork when applying for the grants.
Saving for Shorter-Term Goals
Whether you’re saving for a dream vacation, home renovations, a car or another special purchase, your advisor can be a great asset in helping you reach your shorter-term savings goals.
He or she can recommend the appropriate type of investment plan (such as tax-free savings account) and the right investment strategy. For instance, since you’ll need the money in a shorter time period (compared to retirement savings, for example) your advisor can recommend investment funds that aren’t overly risky, but can still deliver better potential returns than a high-interest bank account.