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 | | 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. | | 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 |
|---|
| 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 |
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
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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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