Amidst an economic backdrop of high inflation, increased interest rates, and talks of a recession, it’s no wonder that Canadians are concerned about their financial future.
In fact, a recent TD survey found that nearly six in 10 (56 per cent) Canadians said they’re worried about getting through the next year and haven’t started thinking about their future financial security. These worries extended to their investments too:
- 62 per cent of respondents agreed the market is too risky for them to invest in right now.
- 59 per cent stated they didn’t contribute to any investments in 2022.
- However, the majority (56 per cent) agreed that no matter what happens with the markets, it’s always important for them to contribute to their investments.
“The state of the economy has intensified Canadians’ anxieties when it comes to their finances and investments,” said Pat Giles, Vice President, Savings & Investing Journey at TD. “Many are struggling to balance competing spending priorities and their financial goals may have changed as a result. That’s why it’s more important than ever to seek trusted advice to help you navigate times of economic turbulence.”
Knowing your options
With tax season upon us and with 34 per cent of Canadians in the survey stating they’re not confident in their understanding of income taxes and how their investments impact their tax returns, a TD Personal Banker can help Canadians understand the different savings vehicles available to them, such as TFSAs and RRSPs.
- RRSPs are tax-deferred investment accounts that allow investors to grow their savings for retirement. Adding funds to your RRSP before the annual contribution deadline could help reduce your taxable income, potentially resulting in savings on your tax bill or a tax refund.
- A TFSA, on the other hand, is an investment account in which any interest earned on the amount invested is not taxed and no tax is payable on any amounts withdrawn.
For both accounts, automatic contributions or pre-authorized purchase plans can be set up to alleviate the hassle that comes with manually managing an investment.
Lowering investment risk during times of market volatility
Nearly half (47 per cent) of Canadians are not confident in their understanding of mutual funds and GICs which can also be useful savings vehicles that are offered by banks and other financial institutions.
- GICs offer a guaranteed rate of return over a fixed period, meaning they could be an attractive, lower-risk option for some investors.
- A mutual fund is a type of investment vehicle that pools the money of individual investors and uses it to buy securities, such as stocks, bonds or other mutual funds. Mutual funds are professionally managed by fund managers, who allocate the fund’s assets and attempt to produce returns for investors. They can be a great option to diversify your investments at an affordable cost and come with varying levels of risk, making them a flexible option for a wide range of investors.
In addition to providing advice on different savings opportunities, TD Personal Bankers can help Canadians set or review their financial goals in the face of a challenging economy. Part of that guidance could include helping customers get their financial house in order, build their savings and keep their focus on the bigger picture.
“Whether you’re saving for retirement, a short-term goal or a rainy day, there is no ‘one-size-fits-all’ approach to investing and saving,” said Giles. “That’s where personalized advice comes in. A TD Personal Banker can help you create the right plan based on your needs. Even in times of economic uncertainty, it’s important to prioritize your financial future. No amount is too small to start saving or investing.”
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