4 Critical Financial Products for the Average Joe

No matter who you are certain events in life will occur, your choice then is to be prepared or ignore things until they are too late.

Here are four products that should be part everyone’s life plan:

1. Registered Retirement Savings Plan (RRSP)

As start working, you should have a Registered Retirement Savings Plan (RRSP). It’s one of the most tax-effective ways to save for retirement and you’re allowed to contribute up to 18% of your earned income from the previous year to a maximum.

Contributions are tax deductible, meaning you can net a tidy tax refund while building your savings. With the recent increases in the limit for TFSA you may want to put that tax refund into as soon as you receive your cheque and keep that snowball of savings going.

1. Tax-Free Savings Account (TFSA)

A Tax-Free Savings Account  is a great way to save whether you are saving for the short-term or the long-term. The TFSA has some characteristics in common with the RRSP, but is different in many ways as well. 

TFSAs came into effect in 2009. From 2009 to 2012, the annual maximum contribution was $5,000. It increased to $5,500 in 2013 and to $10,000 in 2015. And while contributions aren’t tax deductible, there’s no tax payable on investment growth and withdrawals are tax-free and for some it might be a better vehicle than RRSPs.

1. Life insurance

While investments help build wealth, you also need to think about protecting your financial future and your family from unforeseen circumstances. That’s where life insurance comes in. 

How much you need depends on your personal situation but it should be enough to cover any debts you may have (including your mortgage) and help cover your family financially for as long as possible. 

1. Critical illness and disability insurance

Critical illness insurance is a living benefit product that provides a lump-sum cash payment on the first diagnosis of one of several contractually specified critical illnesses or events. I like to refer to is as Bomb proofing your retirement savings.

Because if you don’t have it you will eat away at your retirement savings while recuperate from whatever illness has caused you to stop working. 

Disability insurance is very similar to Critical illness insurance as it also covers loss of income due to inability to work. It is designed to be a short term supplemental income if you become temporarily injured. 

To learn more about the advantages of dealing with a broker or to get helpful information and guides visit.

  www.protectingwhatmattersmost.com.