Shane Dubin, Toronto Wealth Management Executive On Retirement Planning

As an entrepreneur, saving for retirement may
be the furthest thing from your mind. 
With no employee-sponsored retirement plan, it can be tempting to forgo
retirement contributions when 
establishing your own business. 
Although it may not seem important in the early years, this misstep can
be detrimental to your financial future. 

If you are just beginning to save, in Canada a
Registered Retirement Savings Plan (RRSP) is a powerful tool to help you save
for your future while benefiting from tax deferral opportunities. Anyone who
files an income tax return and has earned income can contribute to an RRSP.

Shane Dubin is a
Toronto wealth management executive with two
decades of experience in the industry. He currently serves as the Senior
Vice President, Investment Advisor and Portfolio Manager at Canaccord Genuity,
where his clients work with him to uncover every available solution to ensure a
prosperous financial future. 

We recently asked Shane to answer some common
questions he gets from clients about RRSPs and saving for the future.

As an
entrepreneur, how much should I be setting aside every month for my retirement?

Shane
Dubin: I recommend creating a budget to determine how
much money you will need to save.  With
that said, the reality for many entrepreneurs is that it may not be possible to
set aside a large amount of money every month since most of your capital is
going toward the establishment of your business.  There are several resources you can use
online such as a retirement calculator to help you determine how much you will
need to save over time.  The earlier you
start, the better, and you always have the option to increase your retirement
contributions as your business grows.

What
are the advantages of hiring an Investment Advisor to discuss your RRSP
strategy?

Shane
Dubin: A professional advisor can help you establish
and implement the right investment strategy for your RRSP based on your goals,
risk tolerance, responsibilities

and values. 
They can also assist you with managing your RRSP within the context of
your financial plan, so you have the best chance of achieving your savings
goals. 

How
much can you contribute to an RRSP?

Shane
Dubin: Currently,the allowable contribution room for 2019 is 18% of your earned income from
2018 or a maximum of $26,500.  It’s
important to note, earned income includes salary or wages, alimony received and
rental income, but does not include investment income.  Additionally, if you are a member of a
pension plan, your pension adjustment will reduce the amount you can contribute
to your RRSP.

What
are the tax advantages of opening an RRSP?

Shane
Dubin: RRSP contributions can minimize income taxes in
two ways: one, contributions up to your RRSP contribution limit can be treated
as a deduction from your annual income.

Second, capital gains and income can compound
tax-free inside your RRSP. Taxes are payable only when the funds are withdrawn
– typically in retirement, when you may be in a significantly lower tax
bracket.

How
long can I keep my RRSP open?

Shane
Dubin:  You must
close your RRSP by December 31st of the year you turn 71.  At this time, you will have two options:

1. Deregister all of the assets in the RRSP —
the entire value of the assets withdrawn are treated as taxable income in the
year withdrawn.

2. Transfer the RRSP to a retirement income
option like a Registered Retirement Income Fund (RRIF).  A RRIF can be viewed as an extension of your
RRSP. Your RRSP is used to save for your retirement, while a RRIF is used to
withdraw income during your retirement – and, like an RRSP, a RRIF allows for
tax-deferred growth, offers several investment options and is
government-regulated.

Can I
borrow from my RRSP before I reach retirement age?

Shane
Dubin: You can, however, you may pay significant taxes
on your withdrawal.  With that said,
there are two ways to borrow money from your RRSP tax free: Buying your first
home and paying for education or training. 
Under the Home Buyers’ Plan, you and your spouse each can borrow up to
$25,000 from your RRSPs for a down payment on your first home.  You won’t pay any tax on the money as long as
you pay it back over the next 15 years. 
The Lifelong Learning Plan allows you to borrow up to $20,000 from your
RRSP to pay for full-time training or education at a qualifying institution. A
maximum of $10,000 may be withdrawn from the RRSP per calendar year and the
total amount withdrawn must be repaid over 10 years.

The post Shane Dubin, Toronto Wealth Management Executive On Retirement Planning appeared first on Entrepreneurship Life.