$1000.00 Gross Pay
- 100.00 Group RRSP Deduction
$ 900.00 Gross Pay – Taxable Income
The only certainty in securities markets is that they fluctuate. A rising market may create a euphoric mood; a falling market can lead to gloomy headlines that discourage investors. With dollar-cost averaging, you can take advantage of the very moves that freeze others with indecision. It’s an investment strategy that’s made for uncertain markets.
Dollar-cost averaging works as well for beginners as it does for experienced investors. It is simple concept that’s summed up in a few words: Invest the same amount of money at regular intervals, regardless of market moves.
That no strategy is perfect. Dollar-cost averaging will not guarantee you a profit or protect you against a loss if you must sell your investment when prices are down.
* This investment strategy is subject to the appropriate investment objectives & risk tolerance and may not be suitable for all Clients. The Client should contact their Advisor to discuss their investment decisions *
Do you like the feeling of knowing that your money is well invested and well protected? Segregated funds combine the growth potential of a mutual fund with the security of a principal guarantee
Principal guarantee: Segregated funds operate under a fixed contract term, with a principal guarantee that protects your investments at maturity or death.
Maturity guarantee: When a deposit matures and is redeemed (generally a minimum of 10 years from the date of deposit), you will receive a top-up payment, less any withdrawals and fees, if the market value is less than the guaranteed amount.
Death Benefit guarantee: When a segregated fund annuitant dies, and the market value of the investment has declined, the named beneficiary will receive the guaranteed amount, less any withdrawals and fees.
Segregated Funds are a deferred annuity contract between an insurance company and a policy owner. The policy owner makes deposits through the contract and the insurance company invests the money in Segregated Funds. Segregated Funds are an asset of the insurance company and are similar, in essence, to money held in trust for the investor. The segregated nature protects the investor against the insolvency of the insurance company.
Mutual Funds are owned by the investor and are managed by the investment management company. The securities in the funds (owned by the investor's pooled resources) are maintained in safekeeping by the custodian of the fund.
Segregated Funds are insurance contracts and a beneficiary can be named to receive any proceeds upon the death of the life insured which leads to the following benefits:
Will be a part of the deceased's estate and distributed according to the will after the will is probated (fees).
Because it is an insurance product, it offers creditor protection from policyholder's creditors while policyholder is alive but if it can be shown to have been purchased to avoid potential known creditor actions, it could be challenged.
A segregated fund is considered a trust for tax purposes. This is important for two reasons:
There are two taxable events arising from investing in funds – Mutual Funds or Segregated Funds
Another segregated Fund advantage since Mutual Funds cannot distribute negative capital gains distributions. Capital losses are carried forward to be used against future gains within the fund.
Segregated Funds have the ability to flow through capital losses (138.1(3) of the Income Tax Act) to the individual investor (which can in turn be used to offset other capital gains realized in the same year)
In a year, for example, where there are both capital gains and losses to report, gains will be reported in the capital gains box (Box 21-- same as a mutual fund) and losses will be reported in the "Insurance Segregated Fund Capital Losses" (Box 37 -- only available to Segregated Funds).
With Segregated Funds, the investor gets to choose when to claim the capital losses as capital losses not used in the current year can be carried back three years or carried forward to future years. This is not the case with Mutual Fund investments.
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