Can my ETF pay me $3,000 a month in retirement? + MORE Feb 1st

While they may seem like a quick and easy way to access cash, payday loans (or cash advance loans) are high-risk products that have the potential to lead borrowers into a never-ending spiral of debt and interest payments. A payday loan may be the quick fix that provides instant cash with minimal questions asked, but it can quickly lead the borrower into massive amounts of debt. In many cases, the borrower gets caught up in a vicious cycle of applying for more payday loans just to pay down the interest on their initial loan.
Why do people get payday loans?
Payday loans are typically marketed through smart and often misleading advertising campaigns as a sensible way to see consumers through until their next paycheque. However, these types of loans often come with exorbitant interest rates. Lenders don’t typically ask many questions and don’t generally conduct a credit check, so payday loans may seem enticing to vulnerable people who likely have a bad credit score and are under significant financial stress…

At this time of year, it seems like the financial world is awash with information on what is a Registered Retirement Savings Plan (RRSP), the benefits of having one, and how to start one. But there are still a few planning points that Canadians either aren’t aware of or don’t know how to fully put to use. For instance:
How much should I contribute to my RRSP this year?
There’s no magic number. Most people aim to contribute enough so that when they retire, they can maintain a similar lifestyle to what they currently enjoy. Although there’s considerable debate about the exact percentage, most experts suggest you’ll need 50 to 70 per cent of your current income per year while in retirement.
The maximum you can contribute to your RRSP each year is 18 per cent of your income up to a certain limit (the ceiling for 2017 is $26,010). If you’re managing anything close to that, you’re in great shape. Realistically though, contributing 10 to 12 per cent of your pre-tax income each year is a reasonable target, especially if you’re carrying stacks of debt…

MorinvilleNews.comScheer announces new tax billMorinvilleNews.comConservative Leader Andrew Scheer announced Thursday his party would offer tax relief to young families by introducing the Supporting New Parents Act, which would remove federal income tax from benefits received under the EI maternity and EI parental …and more »

Different investment products need to be tapped in different ways to generate income in retirement. (Flickr)
Q. I have $500,000 that I would like to invest in the Horizons S&P/TSX 60 Index ETF (HXT). I like the fact that this ETF does not make distributions, so there is no income tax to be paid before the shares are sold. I want to use the account to pay me a “return of capital” of $3,000 per month. Is that possible? If not, is there another way to do it? – Luc B.
The Horizons S&P/TSX 60 Index ETF (HXT) is what’s called a “swap-based ETF,” and it works differently from a traditional index fund. The ETF’s benchmark includes 60 large Canadian companies, but HXT does not actually hold the stocks directly. Instead, it enters an arrangement with a “counterparty” (a bank) that promises to deliver to the ETF the same total return as the index.
The main appeal of swap-based ETFs is they don’t pay dividends in cash: instead, they increase in price by an amount equal to the dividend…