Investment returns are important, but so is financial security. Whether you’re new to investing or looking to diversify your portfolio, segregated funds can help you reach your savings goals with guarantees on your principal investment.
Segregated funds are professionally managed investment funds that pool financial contributions from investors. They can be invested in a variety of products including Registered Retirement Savings Plans, Tax Free Savings Accounts and more.
Here are four things you need to know:
Help protect your money
By investing in segregated funds, you can weather the ups and downs of the financial market because your principal investment, and any other deposits you make, come with strong guarantees. Depending on the level of protection you choose, your principal investment has a guarantee at maturity or death of 75% or 100%.
The benefits of estate planning
Whether you’re getting ready to retire or you’re already there, you can protect your hard-earned money. Segregated funds feature benefits that make estate transfer seamless and easy for your beneficiaries. With segregated funds, your assets can be paid directly to a named beneficiary with no costly probate fees.*
Protection for business owners
If you’re an entrepreneur, you put incredible amounts of time and effort into growing your business. Fortunately, segregated funds may protect your personal savings from creditors.** When you invest in segregated funds through a non-registered or registered account and name a Preferred Beneficiary***, you can potentially secure everything you’ve worked so hard to earn for your family.
Many Canadians think you need to be 65 years or older to buy segregated funds, but that’s not true. Segregated funds are sold exclusively through life insurance companies, or a licensed insurance advisor, and they’re available for all Canadian adults.
By investing in segregated funds, you can feel secure with powerful guarantees behind your money and take advantage of growth potential to add to your existing investments. You’ll get the capital protection, versatility and privacy that only segregated funds can provide.
What are you saving for? Watch this video to learn more.
*After someone dies, their estate is subject to probate, which is the legal validation of their will. Probate or estate administration fees can be as much as 1.5% of the estate in some provinces. During probate, assets are frozen. Bypassing probate not only saves up to 1.5% of assets, it also relieves the burden on family of having to possibly go through a lengthy and complicated process to access funds.
**Conditions apply and creditor protection is not guaranteed. You should consult legal and/or tax advisors to ensure that any action you take in relation to this information is appropriate to your specific situation.
***The allowable family beneficiaries of the annuitant creditor protection are set out in most provinces’ legislation (other than Quebec) and are as follows: spouse, child, grandchild, parent.