Is RRSP right for YOU?

Are you thinking about your retirement and wondering if an RRSP is right for you? In the latest Street Smarts with Taayla video, we’ll dig deeper into this question and find a solution that works for you.

What is an RRSP?

If you’re unfamiliar with or new to RRSPs, you’re not alone! An RRSP, or Registered Retirement Savings Plan, is one of the most commonly misunderstood types of investment accounts.

My clients will ask me if an RRSP is right for them, and as much as I’d like to give a simple “yes” or “no,” I usually tell them it depends — because it does!

How to know if an RRSP is right for you

Before I can know if an RRSP is the right choice for you, I need to know five key things about you: your age, income, first home, education, and emergency funds.

When to take advantage of RRSP savings

An RRSP can be an excellent tax savings and a great way to save for retirement. However, if you’re under the age of 30, chances are you’re not at an income state where you can best take advantage of the RRSP savings.


Because when you make less money, you’re also paying little to no income taxes. If you wait until your earning increases before you contribute to your RRSP, then the potential to save on your taxes could be higher than they are now.

While I don’t usually recommended having an RRSP for incomes under $50,000, if you do decide to contribute to one, you don’t have to claim the plan on your taxes for the current year — you can carry it forward indefinitely.

For example, if your income is $20,000 today, and you believe your income will continue to increase over time, then start saving in your RRSP today. Just make sure to wait until you are at a higher marginal tax rate before you apply your RRSP against your income, whether that’s next year or somewhere down the road.

How to use an RRSP to reach your goals

In my previous video on RRSPs, I talk about how you could use your RRSP toward the down-payment of your first home, or toward the cost of a full-time education. While RRSPs are an investment account for your retirement, there are many benefits to utilizing your RRSP sooner rather than later.

If you’re looking to buy your first home, or want to pursue higher education, then go back and watch how RRSP can help you achieve these goals.

When to prioritize an RRSP

The last thing to consider when deciding if an RRSP is right for you, is the status of your emergency fund. If you have little to no emergency fund, then establishing a solid fund should be your first priority!

Fill your emergency fund before your RRSP, because an RRSP cannot protect you quite like an emergency fund can. While you can withdraw money from your RRSP, there are tax consequences for doing so.

I recommend to my clients to keep an emergency fund worth at least three months of their salary — ideally six months.

Let’s think about this scenario: you have accumulated $30,000 in your RRSP and now you have an emergency where you need cash quickly. You decide to take out the $30,000, but what you don’t realize is that when you do that, 30 percent is being withheld. Now you only have $21,000 you can use!

You would then have to include the $30,000 withdrawal from your RRSP in your income taxes for the year. So if your standard income for the year was, say, $50,000, and you added the $30,000 to that, your income tax return would then be based off $80,000 — a much higher marginal tax rate.

RRSPs are meant to be withdrawn from strategically, and in emergency, you don’t have time to plan for that.

Thank you for reading along in my latest post. I hope this dive into RRSPs has been helpful in allowing you to decide whether or not an RRSP is right for you.

Ask me questions in the comments section below, and let me know what other savings vehicle you are using for your retirement. I’d love to learn more!

Please like and share my videos, it let’s me know when I’m doing things right! If you have not subscribed to my channel, please do so now so I can get more segments and topics to you each month.


Private Reserve: The Life Insurance Policy For Both Today And Tomorrow

Private reserve: the life insurance policy for both today and tomorrow.

What is a private reserve? Apart from the source of your favourite bottle of wine, it’s actually a life insurance policy you should be taking advantage of today.

In the latest Street Smarts with Taayla video, I explain how a private reserve is a safe, hands-OFF way to have money work for you. Moreover, it’s wealth building, tax-free and specially designed to provide you with both cash-flow for now and a reliable nest egg for down the road. The best of both worlds; an asset for your future that you can access now.

This particular life insurance policy functions to create and preserve your estate, as well as provide tax-free distribution to named heirs and survivor benefits.

What are the ways in which a private reserve could benefit your lifestyle?

  1. Funding, in the case of an unexpected emergency
  2. Sizeable purchases, such as a home renovation or new vehicle
  3. An education fund for your children
  4. Debt consolidation
  5. Retirement costs such as supplemental health fees, housing, or day-to-day enjoyment
  6. Investments
  7. Cash flow to scale your business

Why haven’t you heard about it before? Probably because many insurance advisors aren’t trained in private reserve life policies!

How do you get started?

  1. Set up an investment grade life insurance policy.  This policy will protect the investment growth from being taxed
  2. Call me to learn about the process of designing a plan that would fit your lifestyle and financial goals perfectly

Learn how you can take advantage of an investment strategy that will provide you with complete accessibility and control over a pool of continuous growth for years to come.

I’d love to hear your feedback, or if you have a similar story, please share with us in the comments below! I will do my best to help support you through it. Please like and share this video, and subscribe to our channel: Engrace Financial Solutions, financial success made simple.

Long Term Disability

Is Long Term Disability the Best Option for Me?

Always protect your most valuable assets. These include our homes, our cars, and most importantly our Human Life Value – the ability to earn an income. A Long Term Disability plan establishes financial security and protects against losses in the instance of an injury or illness, that prohibit an individual from working.

Our most valuable asset: financial security

Picture this. You are currently 40 years old and are earning $100,000 annually. If we calculate your gross earnings for the next 15 years, the total sum would equate to $2.5 million. At the age of 65, your assets will have grown substantially. The are huge risks associated with this $2.5 million asset. What can you do to protect this?

Long Term Disability: is right for you?

Let’s use two different scenarios to explain the benefits of a Long Term Disability plan. Let’s say Job A and Job B are both the same, each earning $100,000 per year. However, Job A does not have a Long Term Disability plan. Let’s say this person got injured severely and are now unable to work. Since they did not have a Long Term Disability plan, their source of income would be reduced to nothing, while they were away from work.  

Let’s say Person B is on a Long Term Disability plan. Since they’re on the plan, their annual earnings would be reduced to $97,000. However, if this person were to be injured or succumbed to any illnesses, they would be protected by their plan. As a result, they would continue to receive a monthly income, around $5,000. Once that individual returned to work, they would receive 50% of the income that was set aside while they were gone.

While most people may choose a Long Term Disability plan, others might fancy the option of being self-insured.

A Long Term Disability insures your most valuable asset and is a smart and safe way to create financial security. Would you buy a house without home insurance? Or drive a car without auto insurance? Probably not! So why wouldn’t you do the same for your most important asset?

Need help making the right decision? Let us help!

Make smart decisions today! Talk to your Financial Advisor to discuss whether or not Long Term Disability is a probable choice for you. If you have any questions, get in touch with us! Contact Taayla today to learn about a Long Term Disability plan. Subscribe to our YouTube channel! We post new video content once a month, so don’t miss an episode and get my financial tips and tricks sent straight to your inbox.

mortgage insurance

Let’s Talk Mortgage Insurance

Today I want to talk about the importance of mortgage insurance and why you should be discussing it with your financial advisor. Even if you don’t yet have a mortgage, it’s important to know for when you do start looking, or to inform your loved ones of what can happen if your mortgage isn’t insured.

What is mortgage insurance?

Mortgage insurance is the bank’s version of life and disability insurance. If a person becomes sick, injured, or passes away, the insurance will pay the mortgage to the lender on behalf of the individual.

Why is it important to have?

If you pass away, do you want your insurance to pay loved ones or have that money taken away to pay off lenders? Mortgage insurance ensures that mortgages are paid so that loved ones can still receive those financial benefits.

It’s also important because the insurance isn’t portable. This means that if you decide to renew your mortgage with another lender, you now have to prequalify for your insurance with that new lender. If your health has declined since then, that could be a huge problem.

In most cases, you’re actually paying a higher premium with less benefits. I highly suggest watching “In Denial” from CBC Marketplace. The story goes into detail about mortgage insurance and some important things to look out for.  If you have a mortgage or are looking to get one, it’s a must-watch.

Bottom line: talk to your financial advisor about mortgage insurance. Make sure you’re doing a needs analysis to make sure you’re seeing the big picture. Be informed and stay educated when it comes to mortgage insurance. It can make a difference between having nothing and having everything – make sure you’re covered when it comes to paying out lenders.

Scroll to the bottom and let us know in the comments below if you want to know more about mortgage insurance or if you have any feedback on our new show.

Get in touch with us!

Subscribe to our YouTube channel! We will be posting new video content once a month, so don’t miss an episode and get my financial tips and tricks sent straight to your inbox.

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