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Latest News
What is a non-registered account and how does it work? + MORE Mar 4th
You could consider opening a non-registered account if you’ve reached the contribution limits of your registered accounts, like your registered retirement savings plan (RRSP) and tax-free savings account (TFSA). Unlike a registered account, a non-registered account doesn’t offer tax benefits, bu.... More »
How to make sense of contradictory investment advice Jan 10th
Q. Several investment sources are giving advice that seems contradictory. On the one hand, it is often preached that the key to smart investing is having a long-term view. That is, buy and hold good-quality stocks for long periods of time (10-plus years). It is argued this kind of passive approach, .... More »
Capital gains tax in Canada, explained + MORE Jun 16th
Capital gains tax highlights
Only 50% of a capital gain is taxable in Canada, and the taxable portion is added to your income for the year. With Canada’s current income tax rates, no one pays more than 27% in capital gains tax. You can reduce the amount of capital gains tax you owe by holding.... More »
Making sense of the markets this week: May 29 + MORE May 27th
Million Dollar Journey editor and Canadian Financial Summit founder Kyle Prevost shares financial headlines and offers context for Canadian investors.
Banking on boring profits
Consistent, proven business models that take advantage of oligopolistic pricing power are often boring. They don’t .... More »
Can debt consolidation help with Canadian student loans? Sep 29th
Ask MoneySense
My parents have RESP savings, and I have a few part-time jobs and some support from other family members. But it’s not enough. I am wondering about OSAP, as I have a tight budget. My parents always warned me that taking on debt was “bad,” though, because they had student lo.... More »
Q. I’m 50 years old and I’d like to work for three more years, then “retire” at age 53. I’m single and have two defined benefit pensions that I could begin collecting at age 55 but want leave them untouched until I turn 60 as that allows me to qualify for full pensions.
To bridge that seven-year gap, I intend to gradually deplete my RRSP and TFSA accounts, which are invested in laddered GICs. This will give me an income of $15,000 annually from the RRSPs and $10,000 annually from the TFSAs. The combined income should cover my expenses, which currently come to about $20,000 annually, with room to spare. I think this is the most tax-efficient way to deal with this money. By age 60, both the RRSP and TFSA accounts will be empty, and then I’ll start collecting my two pensions.
This all seems pretty straightforward to me but where I’m a little stuck is on how to deal with my “supplement” fund. I’m going to have a $300,000 lump sum of money to spend or invest, and I expect to draw down on that little by little as the years go by…
To bridge that seven-year gap, I intend to gradually deplete my RRSP and TFSA accounts, which are invested in laddered GICs. This will give me an income of $15,000 annually from the RRSPs and $10,000 annually from the TFSAs. The combined income should cover my expenses, which currently come to about $20,000 annually, with room to spare. I think this is the most tax-efficient way to deal with this money. By age 60, both the RRSP and TFSA accounts will be empty, and then I’ll start collecting my two pensions.
This all seems pretty straightforward to me but where I’m a little stuck is on how to deal with my “supplement” fund. I’m going to have a $300,000 lump sum of money to spend or invest, and I expect to draw down on that little by little as the years go by…
