Category: Bankruptcy

Retirement First! Then Education Funds…

You are debt free! Now what? Saving for your children’s education fund should come second to saving for your retirement. Your child’s degree will not pay for you to be able to live comfortably in your retirement. You should also not assume that your children will be able to help you financially in your retirement. Even if they could help you – will they? If you save for retirement first, you will be able to move to the next stage of saving for your child’s education as well. Let’s consider (4) retirement savings options:

1. Registered Retirement Savings Plans (tax-deferred accounts) RRSPs

2. Tax-Free Savings Account (TFSA)

3. Non-registered savings and investments (See Part II)

4. Basic savings accounts (See Part II)

RRSP contributions are tax deductible. For example, if you contribute $2,000 to your RRSP in 2015(before March 1), it can be deducted from taxable income when filing your income tax return for 2014. Secondly, the money you contribute to your RRSPs grows and compounds over time.

Tax-Free Savings Account (TFSA)

At the present time, a tax-free savings account allows a yearly maximum contribution of $5,500 and allows savings to grow tax-free. However, you need to research before making contributions and withdrawing cash from this account. Be mindful of maximums because Canada Revenue Agency charges a penalty if you exceed your maximum or otherwise withdraw from the account.

Contact Rumanek & Company Ltd. for more information on bankruptcy and debt solutions. Or please fill out the free bankruptcy evaluation form. To learn more please visit our YouTube Channel. Rumanek & Company have been helping individuals and families overcome debt for more than 25 years. 

Retirement First! Then Education Funds…

As mentioned in: Retirement First! Then Education Funds…Part I, You are debt free! Now what? Saving for your children’s education needs to come second to saving for your retirement. Your child’s degree will not pay for you to be able to live comfortably in your retirement years. If you save for retirement first, you will be able to move to the next stage to save for your child’s education fund as well.

Non-Registered Savings and Investments

Not only can non-registered savings and investments include savings/chequing accounts but also investments such as mutual funds, stocks and bonds. This is beneficial in terms of short-term savings and is also easier to access in case of an emergency.

Basic Savings Account

Interest rates are usually low. Your money does not grow due to inflation. However, you are saving money and your savings are accessible at all times and protected by the Federal Government to a maximum of $100,000.

Talk to a financial advisor or trustee in bankruptcy for retirement savings advice. Once you have started to save approximately a percentage of your income (hopefully between 5% and 15%), you can then begin to research options to save for your child’s education. Remember: Retirement First!

Contact Rumanek & Company Ltd. for more information on bankruptcy and debt solutions. Or please fill out the free bankruptcy evaluation form. To learn more please visit our YouTube Channel. Rumanek & Company have been helping individuals and families overcome debt for more than 25 years.