One of the little-known benefits of having RRSP, RRIF and TFSA accounts is that they come with the option of naming one or more beneficiaries, be they individuals or charitable organizations.
If you’re like most Canadians, you will likely need your RRSPs and RRIFs to get you through retirement. Still, you don’t have to give anything up now if you do choose to name a charity as a beneficiary of your RRSP or RRIF.
You retain complete control of what you need for retirement, and whatever is left over after you pass will be paid directly to your loved ones and charity beneficiaries. It’s a smart and simple way of contributing – and often quite significantly – to the causes most important to you.
Many Canadians are often surprised to learn their final tax bill could amount to as much as half their final year’s income. The good news is, with proper planning, you can direct those funds to the causes that matter most to you instead of giving them straight to the tax department.
Additionally, naming a charity as a beneficiary of your registered accounts could result in a significant tax credit to pay down your final return ensuring more of your money is going to where you want it spent.
Naming charities as beneficiaries of your RRSP and RRIFs is simple. You can do it yourself by contacting your registered plan provider, requesting a change of beneficiary form, and including the organization’s full name and charitable registration number.
However, if you want to make sure this solution is right for you, talk to your financial advisor. They will help you come to a decision that best suits your personal situation.
Using your Will Power TM
The Victoria Foundation is a proud partner in the Will Power TM campaign led by the Canadian Association of Gift Planners Foundation in partnership with the Canadian Association of Gift Planners. Using your RRSPS, RRIFs, and TFSAs as a gift is one option highlighted in the campaign.
Like most Canadians, you’ve probably spent a lifetime contributing to a cause that’s close to your heart. Imagine making a more considerable contribution than you ever thought possible, without using any of the money you need during your lifetime or significantly taking away from your loved ones. You can have the best of both worlds with a charitable gift in your will.
Consider an average estate of $845,000. You likely want to leave most of your estate to your loved ones. Still, even leaving a small portion of your estate – say, 5% of it – to a charity of choice would translate to a $42,000 donation, a more significant impact than most of us would ever be able to make.
Imagine all the good a donation of that size could do! See what kind of impact you can make using our legacy calculator.
We all want to help those around us and leave the world a better place. Leaving a charitable gift in a will is another way to make your mark.
Visit www.willpower.ca/charities/the-victoria-foundation or call the Victoria Foundation at 250-381-5532 to learn more.