Automatic Savings Strategies

Savings should be easy.

Below are simple made-to-order savings plans.

The following illustrations assume a 7% annual return and 2% inflation rate using Tax-Free Savings Account (TFSA), Registered Retirement Savings Plan (RRSP) or Registered Education Savings Plan (RESP). Please let us know if you’d like a personalized plan.

Save for a down payment:

  • Invest $5,500 for ten years in your TFSA to accumulate $86,810.
  • Invest $5,500 for five years in your TFSA to accumulate $39,343.

coinsSave for retirement:

  • Beginning at age 20, contribute $4,000 per year to your RRSP until age 65 to accumulate $1,142,997, which will provide $29,325 each year for 30 years of inflation-adjusted, pre-tax income (your total cash contributions are $180,000).
  • Beginning at age 25, invest $5,500 in your TFSA on January 1 until you turn 64 to accumulate $1,097,993, which will provide $31,103 each year for 30 years of inflation adjusted tax-free income (your total cash contributions are $220,000).
  • Beginning at age 30, contribute $12,000 per year to your RRSP until age 65 to accumulate $1,658,843, which will provide $51,880 each year for 30 years of inflation-adjusted, pre-tax income (your total cash contributions are $420,000).
  • Beginning at age 40, invest $5,500 in your TFSA until age 65 to accumulate $347,870, which will provide $13,262 each year for 30 years of inflation adjusted tax-free income (your total cash contributions are $132,000).

Use a TFSA to save for a down payment and additional retirement income:

  • Beginning at age 22, contribute $5,500 per year to your TFSA to save $50,000 inflation-adjusted down payment in eight years. After withdrawing those funds, continue investing $5,500 until you reach age 65 to accumulate $719,682, which will provide $22,000 each year for 30 years of inflation-adjusted, pre-tax income.

 

Save for education:

  • At the birth of your child, invest $2,500 annually to accumulate $92,521, which provides $18,077 each year for four years of eligible expenses, valued in today’s inflation-adjusted dollars.
  • At the birth of your child, invest the maximum $50,000 per beneficiary to grow to $159,520, which provides $30,557 each year for four years of eligible expenses, valued in today’s inflation-adjusted dollars.
  • When your child turns 10, invest $2,500 per year to accumulate $30,779, which provides $7,187 each year for four years of eligible expenses, valued in today’s inflation-adjusted dollars.

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