Non registered investments are different from registered investments only in that growth is taxed as it happens, depending on whether the investment provides capital gains, dividends or interest. Each type provides its own tax structure, some better than others.
While an RRSP is good for reaching longer-term goals, holding investments in a non-registered account can play a key role in retirement planning. One great advantage of non-registered assets is the access to capital for special needs such as large purchases or expenses. During retirement, this may include home repairs, automobile purchases or repairs, vacation travel and special trips.
Unlike RRSPs, the capital can be withdrawn without paying tax. Tax is paid annually on earnings of non-registered investments. Equity gains are taxed at a lower tax rate than interest income and are only taxed when capital gains are actually triggered by a sale.
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