Should you invest in a Retirement Annuity - or something else?
Many investors do not like RAs, because they cannot access their investment before the age of 55.
An RA also limits the proportion of your contributions that may be allocated to shares and overseas investments.
Should you avoid RAs completely?
Ingram says there are some real benefits to investing your money in retirement funds – the growth inside the retirement fund is tax-free, a boost that especially pays off in the long term.
Your contributions are tax-deductible.
The trick, says Ingram, is to top-up shortfalls with “discretionary” investments such as a “Tax-Free Savings Account” (TFSA).
A TFSA is not limited by regulations (asset allocation, offshore investments, etc.) in the same way that an RA is.
You’ll get a tax refund if you contribute to an RA – invest that into a TFSA, and you’ll one day draw a tax-efficient income from a combination of discretionary investments and annuities.
For more detail, scroll down to listen to the interview.
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