January 9, 2012

Stressless RRSPs & Loans

WHAT IS A STRESSLESS RRSP?

The Stressless RRSP is a guaranteed investment contract only offered through Thom & Associates Financial Planners Inc.

  • The Stressless RRSP takes approximately 15 minutes to complete.
  • Deposits into the Stressless RRSP can come from cash, transfers from other institutions, and from a Stressless RRSP Loan.

 

About RRSP Loans:

  • Loans are available up to $25,000
  • Repayments repayable over 1 to 10 years
  • Principle amount guaranteed dollar for dollar
  • Accumulated growth may be guaranteed with account resets
  • No penalties for early repayment
  • Cost of borrowing ranges from prime to prime plus 2.5% depending on time of year and the supplier insurance company.
  • Takes about 15 minutes of your time

So how does it work?

  • A taxpayer with taxable income between $25,000 and $65,000 will reduce their tax by up to 31% of the RRSP contribution.
  • Taxpayers with higher taxable income save more.
  • Along with your tax savings you also have a retirement investment that grows over time.

How much does it cost me a month?

  • Cost depends on loan amount and length of term for payback, please call 250-861-RRSP (7777) for the repayment amount.
  • Repayments can be increased at any time and additional deposits will not be penalized …….. they are encouraged.

What’s the bottom line

With a estimated growth rate of 5% your $5,000 will be worth $13,266.00  in 20 years.

Though it is impossible to predict the variable interest rate for the next 5 years, we have estimated an average interest rate of 6%.  At this rate your cost of borrowing over the 4 years (length of loan) would be $625.

It is recommended that you use your tax refund to pay a portion of your loan. If you were to do this your cost of borrowing reduces to about $390 and the loan is paid off in approximately a year and a half earlier.

** This illustration is provided for information purposes to facilitate your understanding of the product. The above data must not be considered as a guarantee of the future results, which could be higher or lower depending on the real returns obtained on your investments.

Questions we can help you with?     

Call 250.861.RRSP (861-7777) Kelowna and area or toll free 1.866.525.RRSP (861-7777)