The Tax Free Savings Account, TFSA, was introduced in 2009. The current contribution limit for both 2009 and 2010 is $5,000. If you don’t use it, you don’t lose it i.e. the limits are cumulative. Therefore, if you are age 18 or over in 2009, you now have $10,000 of TFSA room. The question becomes, what’s the best strategy to use going forward? Should you put money in an RRSP or a TFSA or both? Continue reading »
-
04Feb
-
21May
Do You Know Your Number?
While extreme market volatility continues and the length of the recession remains uncertain, investors are understandably scared about their investments and their ability to retire comfortably. Whether you invest on your own or use an advisor, my recommendation is that you should review your retirement plan to determine where you stand personally.
One of the best methods to model your retirement plan is using the Otar Retirement Calculator (ORC). It is straightforward to use and answers the following questions.
• Do I have enough money to retire?
• How long will my money last?
• When can I retire?
• How much do I need to save for my retirement?
• Do I need a life annuity?
• What is my optimum asset mix? Continue reading »
-
05Jan
In June 2006, I wrote an article on “variable annuities, the new kid on the block” which dealt with a new retirement income product that might be worth consideration. Until then, a retiree had only a few product choices on how to allocate their retirement savings to provide sustainable income as follows.
1. Variable products such as mutual funds, stocks, bonds or cash can be used to design a portfolio with which to take regular income withdrawals in retirement. These portfolios are subjected to sequence of return risk especially if you retire in a down market and are making regular withdrawals.
2. Guaranteed products such as GICs or annuities can also be used. In the current interest rate environment, GICs have low rates of return and generally do not keep up with inflation. Annuities provide a guaranteed income stream for life, much like a pension. However once purchased, there is no access to the capital and typically no estate value. Continue reading »
-
19Nov
Here is an interesting video from Russell Investments
-
12Aug
You may have seen several TV ads by a major credit card company in the US, which depicts a victim of identity theft. Using a voiceover by the thief, the victim recounts the story by the thief and the spending spree they go on. Is the ad catchy and humorous? At first, yes until it sinks in a few moments later. It makes you stop and think, could this happen to me? Yes! Continue reading »
-
12Aug
It’s hard to argue with the merits of Registered Retirement Savings Plans. They’re one of the best tax breaks available to the average Canadian, and a great way to build retirement wealth. So why do most of us not contribute as much as we can each year to our RRSP? For many Canadians, the reason is simple. We don’t have the money on hand to make that maximum contribution. So we contribute what we can, or ignore our RRSP all together. Continue reading »
-
12Aug
We’re well into yard sale season. We’ve cleaned out the garage, closets and under the beds. As the saying goes “If you can’t use it, lose it!”
Maybe it’s time for a portfolio clean up as well. A good place to start is the Investment Policy Statement or IPS. Continue reading »
-
12Aug
Have you taken any additional steps towards reducing your income taxes?
I recently completed reviewing my annual client survey and the results were interesting although not at all unexpected. The number one feedback from clients was that they would like more assistance on ways to reduce income taxes. Big surprise!
I read an interesting book this summer “The Tax Freedom Zone” by Tim Cestnick. It’s not about paying no tax; it’s about reducing the amount you pay as low as possible given your personal circumstances i.e. The Tax Freedom Zone. Tim’s writing style with short humorous stories makes reading a tax book enjoyable.
-
12Aug
The contributions to an IPP are graduated by age, and as such as the individual grows older, their contributions increases by a rate of 7.5% per year unlike the RRSPs fixed maximum of $14,500. For example an individual who is earning $100,000 per year at age 55 can contribute $22,400 for that year as opposed to the $14,500 limit imposed under RRSP rules. Continue reading »
-
12Aug
In general, I keep my vehicles about 10 years, so it’s been awhile since I have been in this game. Some things have changed but the overall process is the same. Last time, I actually researched what vehicle I wanted by test-driving the selected models to eliminate the least desirable. The Internet was in its infancy at that point; so little information was readily available without visiting the dealer. One dealer advertised that they sold at three percent over invoice. I contacted that dealer and was astonished that they actually provided me with all prices for every option. I then configured the desired model right down to the color and all options, and then faxed to all dealers within an hour’s drive of Belleville. Many called me to come in for the best deal, but there were several who actually provided written quotes. With the best quote in hand, I went to the dealer, completed the paperwork with no hassle whatsoever. I had done my homework and got a fair deal. Continue reading »
Recent Comments