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Saving and investing in today’s economy (Part 2)

Saving and investing in today’s economy (Part 2)

Posted on: February 01, 2016
Author: Dan Smith, Senior Manager – Marketing and Brand, ATB Investor Services

Markets are volatile, my job situation is kind of shaky, and you’re telling me it's RRSP season and a good time to invest?

From all the advertising and subliminal rate wars clamouring for your deposits right now, it may feel as though financial institutions are completely out of touch with the reality that times are tough here in Alberta. Then again, it is “RRSP season”, a great time for putting your money away for the long-term, right? Here on the ground in Alberta, everyone knows someone who has lost their job or has been directly impacted by the downturn in the economy. Many of us aren’t thinking about saving or making any type of investment right now.

In the most recent edition of ATB Investor Beat, we acknowledge that the current economic environment has affected Albertans in different ways. In part one of this article, we talked about certain behaviours you should be wary of when thinking about investing in difficult times. Now, in part two, we look at investment accounts and options that Albertans, wanting to maintain some freedom and flexibility, may want to consider.

  1. You are uncertain about your future, but are in a position to invest: Seek advice whether to top up your Registered Retirement Savings Plan (RRSP) or not.

    It’s possible if your income is lower this year, it might be a better idea to save your RRSP contribution room for a year when your income is higher. But if you do contribute to your RRSP and get a refund, consider investing it in a non registered High Interest Savings Account (HISA). This gives you the flexibility to easily access your money should you need it, or the ability to move it easily into another investment when things stabilize for you financially. A HISA also provides a guaranteed rate of return and protection of principal. A locked-in term investment like a GIC is not recommended if you might need access to your money in the short term. Regardless, no investment should be made without a long-term plan.

  2. You have the ability to save, but are unsure of your employment situation: Talk to your advisor about a Tax Free Savings Account (TFSA).

    This may be a better course of action because it’s easier to withdraw funds if you need them in an emergency. Your advisor can help you determine which type of investment product within a TFSA will best meet your needs and timelines. Any growth or interest accrued in a TFSA account is not taxed, saving you money at income tax time. Remember that TFSAs and RRSPs are just accounts that signal to the government how you will be taxed. You still need to choose what investments you put in these accounts.

  3. You are tempted to tap your RRSP to help make ends meet: Be careful before you treat your RRSP like a piggy bank. It’s your nest egg for your future!

    Talk to an advisor before deciding to withdraw RRSPs. The government will withhold a large portion for income tax, you may incur other penalties and fees, and making a withdrawal means you lose that contribution room. Some investment firms also charge a Deferred Sales Charge (DSC) on mutual funds if you withdraw from your investments before a specified period of time. The investment company could charge you upwards of seven percent of your total investment. Ouch! (ATB does not sell such funds, by the way). Putting yourself behind on your retirement goals may not be worth it in the long run in order to access cash in the short term.

  4. You need cash now: Talk to an advisor, as there may be other solutions that will help you keep your retirement plan intact.

    For example, ATB has a number of relief programs and initiatives to help customers experiencing personal financial difficulties. An advisor can also help you manage and optimize your cash flow, helping you regain your footing in the short term while still keeping your long term goals in mind. All you have to do is ask for help.

You may hear a lot of messages this month about the February 29 tax deadline encouraging you to “top up before the deadline”. Remember that it’s YOUR hard earned money, and you deserve to have a plan that matches the goal for these savings. The top objectives of a financial institution should be in the safety and stewardship of your money. We believe it is our responsibility to help you choose the right investments and stick to your plan, helping you achieve your short and long-term financial goals, in good times and in bad.

This article gives you an idea of some investment options, but we always recommend professional advice to address your own unique needs. If you have any questions about your current plan, need a review or want to start a plan, please visit, contact us at 1-888-282-3683, email or contact an investment professional near you.

The Compass Portfolio Series of mutual funds is managed by ATB Investment Management (“ATBIM”) and is sold through licensed distributors. ATBIM and ATB Securities Inc. (“ATBSI” - Member, Investment Industry Regulatory Organization of Canada; Member, Canadian Investor Protection Fund) are wholly owned subsidiaries of ATB Financial and operate under the trade name ATB Investor Services. ATBIM and ATBSI are licensed users of the registered trademark ATB Investor Services. Please visit for more information on the fee structure and MERs of the Compass Portfolio Series.