Not sure how to make a retirement plan? Read on…
Latest News
When are TFSAs and RRSPs actually taxable? + MORE Feb 29th
Ask MoneySense
I saw your blog online; thank you so much for the wonderful job that you are doing—it was very informative! That motivated me to start investing too, but now I have a couple of questions. I understand that there is tax on U.S. dividends in TFSA. Do we pay tax as well when we sell:
.... More »
Making the most of the pension tax credit + MORE Nov 29th
Ask MoneySense
I liked your coverage of RRIF taxation. I would like to see more information on LIF taxation. More precisely, on the following scenario: Individuals do not get the $2,000 tax credit for RRIF withdrawals before age 65. Did I read properly that for LIF withdrawals the $2,000 tax cr.... More »
How to be a better investor Mar 1st
For both beginner and experienced investors, focusing on a few basic guidelines can make the difference between good results and great ones. Whether you’re investing in a taxable account or a tax-sheltered account like a registered retirement savings plan (RRSP), doubling down on the basics can he.... More »
Should I cash my RRSP to pay off my mortgage? Jan 17th
Ask MoneySense
Is it a good idea to pay off my mortgage with my RRSP money and then put what my mortgage payment was back into the RRSP once I’ve paid it off? What are the pros and cons of this strategy to being mortgage free?
–Mike
Pay off a mortgage or keep investing with RRSPs?
Payi.... More »
Stock news for investors: Spinoffs, acquisitions, and market moves Oct 3rd
Here’s a round-up of news for Canadian investors this week.
Maple Leaf Foods
TMX group
MEG Energy
Stella-Jones
Algoma Steel
Featured RRSP Accounts
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EQ Bank
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The lowdown on Vanguard’s Retirement Income ETF: can you rely on its 4% payout target?
– moneysense.ca
Vanguard Investments Canada Inc. has unveiled a new targeted monthly income ETF that is rolling out ahead of all other Vanguard jurisdictions in the rest of the world. The Vanguard Retirement Income ETF Portfolio (TSX: VRIF) started trading Sept. 16, 2020, and offers retirees and near-retirees a 4% targeted payout.
Positioned as a “decumulation” product for retirees and near-retirees, it’s probably no coincidence that the 4% target is nicely in line with the long-established 4% Rule discussed in this column earlier.
While a targeted return is NOT a guarantee—unlike the guaranteed but puny rates paid by GICs these days—Vanguard expects the product will attract a fair amount of money from income-oriented investors suffering sticker shock when their GICs mature. Currently, many 1-year GICs pay around 0.5%, ranging from as little as 0.3% to no more than 1.1%. Even going out to 5-year terms, they’re typically paying only 1.4%, ranging from under 1% to 2% in the best case.
Technically, those GIC returns are guaranteed, but a cynic might say they’re “guaranteed” to lose money on an after-tax, inflation-adjusted “real return” basis…
Positioned as a “decumulation” product for retirees and near-retirees, it’s probably no coincidence that the 4% target is nicely in line with the long-established 4% Rule discussed in this column earlier.
While a targeted return is NOT a guarantee—unlike the guaranteed but puny rates paid by GICs these days—Vanguard expects the product will attract a fair amount of money from income-oriented investors suffering sticker shock when their GICs mature. Currently, many 1-year GICs pay around 0.5%, ranging from as little as 0.3% to no more than 1.1%. Even going out to 5-year terms, they’re typically paying only 1.4%, ranging from under 1% to 2% in the best case.
Technically, those GIC returns are guaranteed, but a cynic might say they’re “guaranteed” to lose money on an after-tax, inflation-adjusted “real return” basis…
The scoop: What Canadian investors need to know now
– moneysense.ca
For those who like surprises, the stock markets have not disappointed in 2020. The S&P 500 surged to new heights despite the economy-clenching COVID-19 pandemic powering around the globe, and individual investors’ participation in trading reached a 10-year high during the first half of this year. Still, Canadians have generally remained cautious. Although 77% of us say we invest, nearly half (47%) are saving cash, with millennials most likely to shun the markets (57% are holding savings in cash), according to a BMO RRSP Study conducted by Pollara Strategic Insights.
Why the reticence? If a lack of insight is holding you back from investing, check out The MoneyShow Canada Virtual Expo, Sept. 29 to Oct. 1, 2020. Streamed live to your laptop screen, the show offers:
One-stop access to the best minds in the financial world and the opportunity to learn their insights and strategies—all designed to help you grow your investment portfolio and achieve your long-term financial objectives in any market environment…
