TFSA or RRSP? – February 2013
Lately, one question clients are asking me is whether they should contribute to a Tax Free Savings Account (TFSA) or a Registered Retirement Savings Plan (RRSP)? Personally, I really like the TFSA. however it doesn’t have to be an either or choice. Why not do both? If both, in what proportion should you divide your contributions? In order to make an informed decision, let’s quickly review the main features of each program as discussed in last month’s article. I will use bullets to illustrate the features as nothing gets people’s attention more than bullets.
TAX FREE SAVINGS ACCOUNT
- Any Canadian resident age 18 or over may open a TFSA. Contribution is not based on earned income. There is no maximum age for contribution.
- Maximum contribution is $5,000 for each year from 2009 to 2012 and must be made by December 31st of the year of contribution. For 2013, due to indexing the maximum contribution is $5,500.
- There is carry forward room for each year in which the maximum contribution was not made.
- The deposit is not tax deductible, but the funds accumulate with no income tax payable on growth.
- Withdrawals may be made at any time on an income tax free basis. Withdrawals create additional deposit room commencing in the year after withdrawal.
Make the Most of Your Registered Retirement Savings Plan
The 2012 Registered Retirement Savings Plan (RRSP) contribution deadline is Friday, March 1, 2013. Here are some facts about RRSPs to help you make the most of this great opportunity to grow your retirement savings, better plan your personal taxes, and enjoy a comfortable retirement. Read more 
Top five retirement travel tips
By BrighterLife.ca
Do you dream of travelling extensively during retirement but wonder whether you can afford it? It is possible: The key to efficient and frugal travel is finding ways to make the best use of your travel dollar without compromising on quality.
1. Consider house-sitting
Homeowners like having their homes taken care of while they’re away and many seniors like travelling to and living in new places — that’s a win-win recipe. Homeowners tend to prefer seniors as house-sitters because of their maturity level and sense of responsibility. House-sitting can be a great way to explore a new locale or enjoy experiences normally well beyond your means (such as a few weeks at a waterfront mansion). While short-term house-sitting is seldom paid, the accommodations are rent-free and in some cases you can negotiate for living expenses while you mind the house.
Read more
A New Year’s Resolution You Shouldn’t Break – Saving For Retirement! – January 2013
Many of us set New Year’s resolutions for ourselves and often those resolutions have to do with finances. January is the month we say, “Ok, this year I am going to save more and spend less”. This article won’t tell you how to spend less, but it will outline two government sponsored programs available to help you save for retirement or even just a rainy day! Of course these are not the only vehicles you can accumulate money with – those include anything from putting dollars under the mattress to the most sophisticated tax shelter schemes – but these two are the most popular.
Tax Free Savings Accounts (TFSA)
This is the new kid on the block established by the government as of January 1, 2009. Canadian residents age 18 or older could contribute up to $5,000 into a TFSA. The funds would grow tax free and although there is no tax deduction for the contribution, withdrawals can be made at any time without paying tax. Also, there is no earned income requirement for an individual to contribute. For those years where no contribution is made, it can be made in later years. Any withdrawals can be paid back in addition to current contributions. Be careful not to do this in the same year as the money was withdrawn so as to avoid a tax penalty for over payment.
