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TFSAs, RRSPs and the tax hikes to come
No one knows what tomorrow will bring but managing your finances to provide stability and limit your tax exposure are two ways to take control of your life.
Click here to read the full article on The Globe and Mail
Take Maximum Advantage Of An RESP For Your Children – And Grandchildren
The countdown to the start of the new school year is upon us. If your children are like mine, they are approaching Labour Day with a mix of excitement and trepidation. Aren’t we all.
For university students, we must also contend with how to pay for their studies. Most are antiquated with the Registered Education Savings Plan which is described well in Tim Cestnick’s article but few are acquainted with the withdrawal strategies that can help you and your child save tax.
In a nutshell, if you child is likely to use up the entire account or if a sibling can use any funds that are left over, there is little planning to be done. You may just want to keep the taxable portion of the withdrawals (the so-called Education Assistance Payment or EAP) at or below the basic personal amount which is $13,229 for 2020. Any withdrawals in excess of this amount should come from the subscriber’s contributions to the account – which can be received by your child tax-free.
However, if you have been a diligent saver, or if your children’s education costs are lower than expected, and your child might not use up the entire RESP, it would be best to ensure that the EAP is exhausted by the time your child/ren complete their studies. This will ensure that any money that remains in the account can be refunded to you on a tax-free basis.
For more information on RESP withdrawal strategies, please feel free to contact me at monique@upotential.com.
Click here to read the full article on The Globe and Mail
Canada annual inflation rate jumps by most in nine years as economy reopens
My professional college, FP Canada, released its updated Assumption Guidelines at the end of April. I was surprised to see that the assumption they would have us use dropped from 2.1% for 2019 to 2.0% for 2020. I would have expected inflation to go up as inventories dropped and Canadians scrambled for goods and services through the pandemic. This article is a good reminder of how diversified the Consumer Price Index is and how pent-up demand in some areas are balanced by accumulating inventories in other areas.
Click here to read the full article on Reuters
I’m not worried about a recession for 3 reasons, but I’m still preparing in 3 ways
Hindsight is 20/20. Although reading an article like this (written just a month before the world seemed to shut down due to the pandemic) can be amusing; the moral is sound: challenges are inevitable and we must prepare for them.
Click here to read the full article on Business Insider
How to Deal with Coronavirus-Related Money Stress
The message of this article is (unfortunately) universal right now: “don’t touch your face, don’t touch your (edit: 401k) RRSP.”
Click here to read the full article on Today
Could Your Thoughts Make You Age Faster?
Long ago, I resigned to the fact that I am in charge of very little in my life. Markets will move up and down with little input from me. Viruses will spread across countries and continents in a manner beyond my control. But for many years we have been told that the one thing we have influence over is our own response to stressors such as markets and health crises and that these responses can have a very significant impact on our health. Here is an article that explains how our perceptions of external stressors and our reaction to them can affect how we age.
Click here to read the full article on TED Ideas
Divorce, RRSPs and Buying a New Home
One of the most contentious issues for separating spouses and common-law partners is how to support two households when many had difficulty managing one. In costly cities such as Toronto and Vancouver, purchasing separate properties can be down-right impossible. A recent change to the treatment of the Home Buyer’s Plan upon relationship breakdown may ease the burden.
Click here to read the full article on The Common Sense Divorce
The ‘Aging Checklist’: What Is It And Why Every Retiree Needs One
Planning for your aging years is a big part of what we do. Aside from increasing my clients’ budget to accommodate the costs of assisted living or personal supports, there are other considerations that we discuss in our meetings. Among these is the issue of whether the current home is suitable for “aging in place” (a term used to express one’s desire to age in their home rather than moving to a retirement residence) and how the client will stay vital and engaged when he or she steps away from the workforce. I often use a phrase that the authors used: “make sure that you are retiring to something and not from something”.
Perhaps the greatest takeaway from this article is the idea many of these decisions should be made years in advance – or “with a cool head” as I usually refer to it. This helps to avoid a crisis when someone suddenly falls ill. I also encourage family meetings on some of these topics so that the family members can understand what you expect of them and what is important to you before they are put in the position to make decisions for you.
Click here to read the full article on Forbes
How Bill and Melinda Gates Are Transforming Life for Billions in the 21st Century
While I don’t expect or aspire to reach the wealth achieved by the likes of Bill and Melinda Gates and Warren Buffett, I love this article’s message of optimism for the future. The article talks about philanthropic opportunities as “summoning the moment of lift for human beings”. I can’t think of any better way to usher in the new year and a new decade.
Click here to read the full article on Fortune
Home Insurance You Didn’t Know You Had
You purchase home insurance to protect you from catastrophic losses, such as an all-consuming house fire, or a massive back-up of sewage water in your basement. But did you know your everyday home insurance policy can often protect you for perils that are not always so obvious?
Click here to read the full article on Romana King’s Blog