Let us show you how.
TD Future Builder is based on four simple financial strategies, pay yourself first, benefit from immediate tax savings, invest regularly, and start early. These financial strategies have proven to be successful for investors at every life-stage and income level.
- Pay yourself first
If it always seems like you have no money left 'after' you pay your monthly expenses, try paying yourself first. With TD Future Builder automatic payroll deductions, you don't have to do a thing. It's all taken care of for you.
You'll adapt to this slight adjustment in take-home pay as quickly as you notice your savings start to grow.
- Benefit from immediate tax savings
When you contribute to a Group RSP Account through TD Future Builder, you receive the tax benefit from your RSP contribution immediately. This means you keep your money working for you because -
- Less taxes will be deducted from your pay
- More of your money can be put to work earning potential income.
| Notice the TD Future Builder advantage
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Bob and Cathy both contribute 18% of their gross pay to their RSPs each pay period. Bob transfers his contribution from his bank account and Cathy contributes through her company's TD Future Builder account.
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Bob |
Cathy |
| Gross pay |
$1,000 |
$1,000 |
| Less: Group RSP contribution |
---- |
-180 |
| Adjusted gross pay |
$1,000 |
820 |
| Less: Income tax withheld (25%) |
-250 |
-205 |
| After-tax pay |
750 |
615 |
| Less: RSP contribution |
-180 |
---- |
| NET PAY |
$570 |
$615 |
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After making their contributions, Cathy's net pay is $45 higher than Bob's. And while Bob will receive an income tax refund next year, Cathy effectively receives hers with every pay
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As you can see, TD Future Builder starts to work for you as soon as you make your first contribution.
- Invest regularly and benefit from the added potential of dollar cost averaging.
Very few people ever get rich overnight. Wealth is more often than not the result of a long-term and disciplined approach to savings. When you invest regularly, you immediately have two advantages on your side.
First, your savings can continue to grow steadily through the effect of compounding. The benefits of compounding are significant when time is on your side. The longer you leave your investment to grow, the more likely it can multiply. This compounding effect can help your money to grow week after week. When you invest inside your RSP, this compounding income can grow tax-deferred year after year and could make a sizeable difference to the amount of money you enjoy in retirement.
Second, you can take advantage of dollar-cost-averaging to improve the efficiency of your investment. Here's how dollar-cost-averaging works:
Investments such as mutual funds will fluctuate in value throughout the year. By purchasing a fixed dollar amount on a regular basis, you can purchase more units when the price is low, fewer units when the price is high and as a result, you can pay a lower average price for the units you buy.
- Start early
No matter what your goals are, the sooner you get your money working for you, the more you can have when you need it. It's that simple.
Natalie started investing at 22, setting aside $100 every month until she turned 31. At the end of those nine years, her contributions amounted to $10,800. Even though she stopped contributing at 31, Natalie's investment continues to increase at an average annual rate of 8% (compounded monthly) by the time she is 65, her investment will be worth $238,400.
Ted started investing at 31, planning to invest $100 each month until he turns 65. By the time he reaches retirement age, he will have invested $40,800. If we assume that he, too, earn an average annual rate of 8% (compounded monthly) his investment will be worth $212,100. That's substantially less than Natalie will accumulate, even though he invests for 25 years longer.
The story of Ted and Natalie illustrates the importance of starting early, investing regularly and staying invested.
Visit the TD Canada trust Financial Planning Centre to view the -
Financial Planning Road Map
Financial Planning Tools
Interested in joining a group saving plan? - Your TD Future Builder group savings plan is set up through your employer. There is no cost to your employer and it is easy for them to administer. We would be more than happy to demonstrate how you and your employer can benefit from a group savings plan. Provide us with a referral name on the
online request form and we'll do the rest.
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