Valley First

Investing and Saving for Retirement

There are several options including RRIFs or other annuities which can provide you with a secure retirement income while minimizing the amount of income tax you pay.


Retirement investment options


  • A Registered Retirement Savings Plan (RRSP) is a government-approved, tax-sheltered account you can use to build your retirement savings. It can hold a variety of assets, including mutual funds, term deposits (GICs), bonds, stocks and cash.
  • Any money you put into your RRSP reduces your taxable income. You usually don’t have to pay tax on your RRSP contribution or any gains you earn until you withdraw funds—typically when you are retired and are in a lower tax bracket.


Due to the power of compounding interest over time, the earlier you start to save, the easier it will be to reach your retirement goals.

Tips for retirement investing

  • Contribute to a RRSP regularly so you can take advantage of the power of compound interest. And since income earned within your RRSP is not taxed, your investment grows even more quickly.
  • Contribute to your RRSP before the deadline each year and you’ll see that this extra bit of time helps your investment grow that much more.
  • Do your best to maximize your RRSP contribution each year so you get the maximum tax deduction and a larger retirement fund.
  • Consider setting up a spousal RRSP if you earn more than your spouse—that way, when you retire, you’ll likely pay less income tax as a couple.

Retirement income options


  • A RRIF is basically a RRSP in reverse. You put money into RRSPs while you were working to save on taxes every year. When you eventually switch your money over to a RRIF, you'll be drawing money out, and paying taxes on that money as you do, but at a lower tax rate.
  • With a RRIF you continue to control how your funds are invested and have access to many of the same investments you had with an RRSP.
  • By December 31st of the year you turn 71, your RRSPs need to be converted to a RRIF, used to buy an annuity or taken as cash—or a combination of any of these options.

Considerations for retirement income planning

  • As long as you are taking the minimum withdrawal each year from your RRIF, you can select to receive income from your RRIF on a schedule that works for you (monthly, quarterly, semi-annually, or annually).
  • If your spouse is younger than you, you can choose to have your minimum withdrawal amount calculated on his/her age. This is beneficial if you do not need all of your RRIF income right now and want to keep it growing.
  • It’s a good idea to continue to make spousal RRSP contributions after you turn 71 if your spouse if under the age of 71. This will just continue to add to your income stream.


Mutual funds, other securities and securities related financial planning services are offered through Qtrade Advisor, a division of Credential Qtrade Securities Inc. Mutual funds and related financial planning services are offered through Qtrade Asset Management Inc.


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