Enhance Investment Returns by Maximizing Tax Efficiency

If you’re like many Canadians, you’re
already investing outside your RSP. This is
a wise investment and tax strategy considering
that RSP contribution limits cap the
amount you can contribute into an RSP.
As a result, your RSP may not be sufficient
to supply the total amount of money you
need for the retirement lifestyle you want.
A mix of non-registered investments can
make up the shortfall—but only when
fully integrated with your overall asset
allocation and tax management plan.

All investment income earned outside a
registered plan must be reported annually
on your tax return. But you can minimize
or defer tax on that income through your
choice of non-registered investments.

Interest income is taxed at the highest
rate. Alternatively, just 50 cents of every
dollar of realized net capital gains is
taxable and, because capital gains are
taxed usually only when you sell your
investments, you control when you pay
tax on those gains. You can defer capital
gains taxes for years by choosing to sell
these investments at a time when it’s most
advantageous for you (i.e. in a year when
you expect your income will be lower than
it is today).

As you can see, if you are in a higher
tax bracket, investment income that
is taxed as capital gains provides a
significant advantage to your returns
on an after-tax basis. This is where the
benefits of a tax-advantaged fund
structure for your non-registered portfolio
can provide big rewards. Unlike most
common mutual funds, which trigger
tax consequences any time you switch
from one non-registered fund to another,
Investors Group Corporate Class Inc.™
funds are treated as a single entity for tax
purposes. This feature allows you to move
assets freely among share classes while
deferring capital gains taxes. As a result,
you can review the regional and sector
weighting of your portfolio without the
need to worry about the tax
consequences. Over time, it’s this tax
deferral feature that allows you to
accumulate more wealth than if you
had to pay tax on your gains each time
you reallocated assets.

Investing within a tax-advantaged
structure such as Investors Group
Corporate Class Inc.™ makes it easier
than ever to access the right tools to
help you build your wealth.

Investors Group Corporate Class Inc.
features over eight premier investment
managers and offers you the flexibility
to move freely among over 40 classes–
the largest industry offering of tax –
advantaged funds available. Investors
Group Corporate Class Inc. also features
two capital yield classes that fully support
a truly balanced, and appropriately
diversified portfolio.

To learn more about how the funds
offered by Investors Group Corporate
Class Inc. can help you build your wealth
in the most tax-efficient manner possible,
or to explore other tax efficient investment
alternatives, give me a call today.


AKASHDEEP SINGH
Consultant
Investors Group
601-2345 Yonge St
Toronto ON M4P 2E5
(416)-483-7667 Ext.526