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Off with his head!

Got another retirement tip for ya, folks! It's about cutting taxes (boo taxes!).


One key to wealth creation is mitigating taxes. Usually when investors move money out of one non-registered fund and into another, they have to pay capital gains. To alleviate that problem, fund companies created a “corporate class” structure, which lets people move between funds without triggering gains.

According to Mackenzie Investments, if you invested $100,000 in a corporate class fund that earned 6% a year, you would have $370,268 after 25 years, assuming it’s taxed annually at the top marginal rate. If you held an interest-paying investment over the same period, you would have made $239,841. In some ways, it’s like an RRSP; you only pay when you withdraw, which means your investments can grow tax-free. This is why it only makes sense to put non-registered investments in corporate class funds.

(Research, editorial and spiritual support provided by Bryan Borzykowski)

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