Category: Personal Finance

Opting for a pension instead of asking for the entire amount against your retirement benefits is the best way for supplementing your retirement income. Many times you need the funds because of financial hardships. You may need to unlock the pension because of decreased income, loss of job or for paying off the debts. It may compel you to withdrawal of money from the locked-in account and get it transferred to RRSP that may be accessed at later stages without any hurdles. It is better to seek assistance from the reliable financial advisors to take a viable decision whether or not to go for unlocking a pension. Also introduced as Locked-in Retirement Accounts [LIRA] or Locked-in RRSP, the locked-in pension individuals can have access to their own funds by meeting certain criteria. Those in hard need of money are usually eligible for access to certain part of their locked-in pension funds.

1. Financial problems – It is usually the financial constraints that compel us to have access to our locked-in-pension funds. It could be low expected income in the forthcoming period of one year, payment of the first and last month’s rent, medical expenses or the arrears of rent or mortgage.
2. Unlocking 50% through transfer – You may be able to transfer your locked-in pension fund to a Life Income Fund in case you are at least fifty five years old or at the age where you could otherwise be eligible for a pension from the originating plan for pension. Remember, a one-time withdrawal equal to fifty percent of this LIF can be made after transfer to this account. It can be used as income or transfer to the unlocked investment account, e.g. the RRSP.
3. Small Pension amount after 55^th years of age – Application for unlocking a pension can be moved by the individuals that cross the fiftieth year of their age. This is subject to the condition that the total of the locked-in pension should be less than $21,000 or the prescribed amount since prescribed by the concerned states.
4. Non-residents: A pension can be unlocked by the non-residents of Canada that have passed twenty four months since the date of their departure from the country.
5. Decreased life expectancy – Persons with shortened life expectancy of two years or less than that may apply for unlocking their pensions.

Just think of the downsides of pension-unlocking before opting for the same. Your retirement income may go down heavily. Penalties for early raising of pension, loss of guaranteed benefits / future guaranteed income, taxation on the income, loss of benefits in respect of your partner or the offspring, loss of health benefits and the costs for unlocking a pension could be some of the financial burdens upon the guys that opt for pension-unlocking. Candidly, pension is the safe option from the creditors in the event of bankruptcy while the cash in the bank is prone to instant withdrawals. As such do approach a financial advisor that may render a good piece of advice whether to go in for pension-unlocking or not.

In order to succeed in life on the financial front, it is important to follow a few steps. It isn’t as simple as resolving to spend less and save money. You can do a whole lot to improve your financial situation. It isn’t necessary that you do it at the start or end of your financial career. You can begin this process at any point in time.

Obviously, the basics have to be followed and other than that, a few other things have to be kept in mind. For instance, one need not spend more than necessary. If one limits spending to absolutely necessary things, there will definitely be savings in the end. Also, make sure you land a job that pays you for your skills. True, there is no dearth of underpaid professionals. Make sure that you aren’t one of them.

Ways ToSave Money

Yes, it isn’t as simple as it sounds but if you want to save, you got to try. In order to save finances, this should be your very first step. Once you have done so, know the market value of each and every asset of yours. Evaluate all your assets and see which one is absolutely unnecessary. It would be a good idea to sell away things that aren’t required.

It will fetch you a lot of extra money. Also, use your money productively. Invest into good ventures that are sure to increase the amount at a later date. These are a few basic tasks that one ought to do in order to save capital.

You could also set up small activities if you are a family. Things such as everybody contributing a certain fixed amount of money towards savings would be a good idea. Check which are the better investment options in the market, and enter into the most profitable one.

Once this investment reaches a significant number, you will feel great about putting it in. Thus, you can save a lot of money by indulging into these very basic things to the point that, you may even have a happy retired life. Most importantly, keep a tab on your earning and your spending. Always keep unnecessary spending in check.

Existence Of Cost-Efficient Methods

All of these are extremely cost efficient methods. You will soon find yourself big on the savings front. The joy of that will be that you haven’t made any huge sacrifices to achieve it. Small efforts in your daily life can take you a long way.

Find out other ways that you can use in order to save money through other resources. If you have been working for a while and think that you are underpaid, you should try and get a promotion or a raise. You can then invest the upper limit of your salary and enjoy the benefits later on.

There are countless ways of managing finances efficiently. Choose better investment options and spend less and you will definitely be able to manage your finances better. All of us spend a lot of money on phone calls. It would be a good idea to cut down on those. Even if you have a plan, it is better to cut off unnecessary expense.