Great Returns Under Most Scenarios!
| 1 |
$5,000 |
5.00% |
RSP |
78% |
$1,100 |
8 |
7,387 |
0.00% |
| 2 |
$5,000 |
5.00% |
RSP |
66% |
$1,700 |
8 |
7,387 |
0.00% |
| 3 |
$5,000 |
0.00% |
RSP |
78% |
$1,100 |
8 |
5,000 |
0.00% |
| 4 |
$5,000 |
-5.00% |
RSP |
78% |
$1,100 |
8 |
3,317 |
0.00% |
| 5 |
$5,000 |
5.00% |
Non RSP |
30% |
$3,500 |
8 |
7,387 |
0.00% |
| 6 |
$5,000 |
5.00% |
Non RSP |
30% |
$3,500 |
8 |
7,387 |
0.00% |
| 7 |
$5,000 |
0.00% |
Non RSP |
30% |
$3,500 |
8 |
5,000 |
0.00% |
| 8 |
$5,000 |
-5.00% |
Non RSP |
30% |
$3,500 |
8 |
3,317 |
0.00% |
(cont')
| 1 |
7,387 |
0% |
7,387 |
48% |
$3,841 |
16.9% |
| 2 |
7,387 |
0% |
7,387 |
36% |
$4,728 |
13.6% |
| 3 |
5,000 |
0% |
5,000 |
48% |
$2,600 |
11.4% |
| 4 |
3,317 |
0% |
3,317 |
48% |
$1,725 |
5.8% |
| 5 |
7,387 |
24% |
6,814 |
0% |
$6,814 |
8.7% |
| 6 |
7,387 |
18% |
6,958 |
0% |
$6,958 |
9.0% |
| 7 |
5,000 |
0% |
5,000 |
0% |
$5,000 |
4.6% |
| 8 |
3,317 |
0% |
3,317 |
0% |
$3,317 |
-0.7% |
Prepared by Carl Spiess, Director, ScotiaMcLeod
Assumptions:
- Marginal Tax Rates used: 48% or 36% as indicated.
- Capital Gains taxed at 50% of the marginal rate (in the last
example losses could be used to offset future gains).
- Fund must be held for 8 years to avoid 30% tax credit clawback.
Retirees now also need to hold the fund for 8 years to avoid
tax.
- Redemption fee paid on early withdrawal of fund.
- Upon early withdrawal of investment and subsequent repayment
of tax credits, investment will still have benefited from the
deferral of tax.
- Average Annual return calculated on growth of total cash
invested over the holding period.
- You live in a province where the tax breaks are
available.
Bottom Line
Even assuming low returns, for people in high tax brackets
(earning over $29,000 a year) LSIFs provide good total returns.
Inside and Outside the RSP - LSIFs Provide a 30% (now up
to 35%) Tax
Break!
Maximum tax credit used in this illustration on a $5,000 investment is $1500. This $1500 includes
15% Federal ($750) and 15% Provincial ($750) Tax credits. (Can be up to
20% in Ontario for a 35% total)
Please note that these are projections only. Please consult the fund
prospectus for complete details on risk factors, tax refund rates and
other pertinent information. Unit values and investment returns will
fluctuate.
Please contact your ScotiaMcLeod Wealth Advisor directly for more information or for investment advice tailored to your personal situation.
The information contained on this website is for use by persons resident in Canada only.
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