This can happen if the client receives a large inheritance or sells a large asset in the future. So, you need to ask a lot of questions about what the client has on the horizon, then do the math.
“If people are under 50, it’s one thing, because there’s less certainty,” Roy said. “But, once people are over 50, it can be inferred that they are better off at tax-free savings types of investments than RSPs.”
You also need to consider estate planning because clients can designate their spouse as a beneficiary of the RRSP or TSFA, but they can only name their children as beneficiaries of the TSFA, so those assets You can make the transition without any tax effect. RRSP can only be passed on to children if they are minors or dependent children.
You should also ensure that customers do not use RRSPs as short-term savings accounts and make early withdrawals.
“Some people see their retirement accounts as accessible money, but it makes little sense to put the money in RSP and withdraw it after a year,” Roy said. “Think about the times when your customers need accessible cash and make sure they are keeping a source of it in case they need the money.”