3 minutes read

Navigating Retirement Savings: A Guide for South Africans in Canada

Vincent Heys

Are you a South African living in Canada and wondering about your retirement savings options? Navigating through financial planning in a new country can be daunting, especially when it comes to securing your future. But fret not, as we’re here to shed some light on a few viable paths you can take towards financial wellness in your new home.

When it comes to financial emigration there are many ways to tackle the challenge and many questions that arise. Perhaps you’ve asked a few yourself! One such question that comes up a lot is what to do with your cashed-in retirement savings money here in Canada.

This is a crucial question because these funds are vitally important to your future, but also require careful planning to maximize when bringing them into Canada.

So, if you’re asking what to do with your retirement savings from South Africa, here’s our 3 top options for you.

Aligning Retirement Savings for South Africans in Canada

Before delving into specific options, it’s crucial to align your retirement savings strategy with your overall financial plan. Your retirement funds should serve as a sturdy cornerstone, providing stability and security as you journey through life.

If you’re unsure about your big-picture plan, why not reach out to a Wealthstack Expert for guidance, and get your own Wealthstack Dashboard set up to make the view crisp and clear?

If you’re all set on the big picture, here’s your options when it comes to cashing in your retirement funds in South Africa:

Option 1: Registered Retirement Savings Plan (RRSP):

The RRSP emerges as a prime contender for South Africans in Canada when looking to reinvest cashed-in retirement savings. We believe this is the priority option because you keep your original intent for these funds and continue to build a retirement nest egg. RRSPs have significant tax benefits that are very appealing. For example, when you deposit the funds from your South African retirement savings into an RRSP it doesn’t use up your contribution room, ultimately optimizing your tax benefits. Our Wealthstack Experts can unpack more ways that you can get the most out of the RRSP tax benefits.

Option 2: Savings Account for Homeownership:

If your priorities are different as you set up life in Canada, you might be dreaming of owning their first home in Canada (this may be more of a “need” than a dream for some), a dedicated savings account tailored for this purpose can be a game-changer. Investing in the First Home Savings Account not only helps you achieve homeownership but also comes with its own set of tax benefits. Read more about it here.

Option 3: Non-Registered Investment Plan:

Exploring non-registered investment plans for your South African retirement savings opens up opportunities for growing your wealth and diversifying your investment portfolio. While lacking the same tax benefits as RRSPs and the First Home Savings Account, this option still holds promise for savvy investors.  South Africans running their own corporation in Canada have additional tax-efficient choices. You can boost your pre-tax savings within the corporation by using retirement funds from SA as income for the year.

Tailoring Your Plan to Your Unique Goals

Your needs are unique, and your family has distinct financial goals and aspirations. So whether it’s early retirement, homeownership, or entrepreneurial pursuits that take center stage when you land in Canada (or financially immigrate), we’re here to tailor a plan that aligns with your needs and aspirations. You can check out our service packages here.

Take the Next Step

If you’re ready to take the next step towards securing your financial future, we invite you to reach out to us. Whether you have questions, need personalized advice, or wish to schedule a consultation, our team is here to assist you every step of the way.

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