“Everything companies”: How Amazon’s playbook is reshaping competition in Canada + MORE Oct 28th

Ask MoneySense
We are a couple in our late 50s. No kids. We have no debt and own our main living residence. We will have pensions, but my spouse’s will be double mine. We have minimal RRSPs. We currently inherited $200,000. Logic says to invest an inheritance in a TFSA, so it does not become taxable. But different sources say to prioritize RRSPs and reinvest the return if your retirement income will be lower than it is now. I’m confused. Is it better to invest an inheritance in TFSA, RRSP or spousal RRSP?

—Kate

How to invest an inheritance

I think the best thing you can do when you receive an inheritance, Kate, is to re-evaluate your finances. Too many people rush to do something immediately. It’s good to take the time you need, especially when you’re mourning a loss.  

You mention your spouse’s pension will be double your pension, but keep in mind that pension income splitting allows you to split defined benefit (DB) pension income, as well as other eligible pension income, with your spouse…

Maybe you’re newly single, or are just trying to get your finances in order for the first time on your own. Whatever you situation, it can feel like an unsolvable riddle: How can a woman, who doesn’t have a partner to split bills with, find money to invest every week or month? It’s certainly a common issue: The number of women living solo has doubled in the past 20 years. But it isn’t the only reason many women don’t have portfolios. 

Wealthsimple, a Canadian online investment service, conducted a survey in November 2023 and learned why—it found that a staggering 72% of women feel they simply don’t know enough about investing and don’t feel confident enough to try—so they don’t. And only one in four Canadian women seek out advice from a planner, according to a TD Waterhouse poll. 

That’s the bad news. The good news is, “it’s never too late to start investing,” says Teresa Black Hughes, a financial advisor at RGF Integrated Wealth Management in Vancouver…

Canadian companies are nowhere near the size and scale of Amazon, but some of our most beloved brands now see themselves less as industry leaders and more as collections of varied financial assets. Consumers think of companies as offering goods and services, but this is not necessarily how companies think of themselves, as they increasingly use convoluted accounting and tax practices that primarily seek to return capital to shareholders. In this way, companies no longer invest in production; they are investment companies. The term for this is “financialization,” and it is key to global capitalism today. 

Greta Krippner, a scholar at the University of Michigan, defines financialization as “a pattern of accumulation in which profit making occurs increasingly through financial channels rather than through trade and commodity production.”

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