Using Critical Illness Insurance to Protect your Retirement
You have a retirement plan set out and it includes your RRSP. Could a health interruption get in the way of your plan?
If you need to withdraw money from your RRSP, not only can it affect your RRSP’s growth, it’s considered taxable income. In fact for every $1.00 you need, you’ll have to withdraw $2.00, based on your current tax rate.
Critical illness insurance can provide you with a one-time lump-sum payment to help you recover on your own terms and keep your retirement goal intact. If you become ill and you don’t have insurance coverage, there are 2 options for getting your retirement planning back on track:
- Pay more by increasing your annual contributions
- Work longer and continue to make RRSP contributions to age 71.
Critical Illness coverage for a 35 year old male non-smoker starts at $30.06 a month for $100,00 (winquote Feb/2017)
The coverage is affordable and can make a significant impact on maintaining your RRSP rather than withdrawing early.
Source: Luigi DiCamillo – HUB Financial Inc.
