What to do if you overcontributed to your RRSP + MORE Feb 26th

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How to cope with the RRSP-to-RRIF deadline in your early 70s + MORE Mar 21st

As I wrote in my previous column on Fred Vettese’s PERC, I’ve reached the age when my registered retirement savings plan (RRSP) will soon have to be converted to a registered retirement income fund (RRIF) and/or annuitized. I turn 71 in early April, which means I have until the end of December 2.... More »

Trump’s social media company to trade on the Nasdaq Mar 26th

Trump Media & Technology Group, whose flagship product is social networking site Truth Social, will begin trading on the Nasdaq stock market on Tuesday. How much is Truth Social stock? Shareholders of Digital World Acquisition Corp., a publicly traded shell company, approved a deal to merg.... More »

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 »
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How to start saving for retirement at 45 + MORE Mar 13th

Saving for retirement at age 45 means you’ll have a 20-year runway toward a traditional age 65 retirement. But what’s your starting point? The National Bank of Canada suggests that by age 40 you should have 2.1 times your annual income saved for retirement, while the U.S.-based firm Fidelity rec.... More »
Ask MoneySense
I overcontributed to my RRSP by accident, and I am looking for some advice on how to deal with it. I contributed $3,550 to my 2022 RRSP in October 2022. I then forgot I made this contribution and again in February 2023 I made a $3,550 contribution.

What options to I have to address the over contribution? Can I count my February 2023 contribution towards my 2023 tax return?


How to fix an RRSP overcontribution

This is the time of year that people tend to find out about inadvertent overcontributions to their registered retirement savings plans (RRSPs). If you want to know where you stand, an income tax notice of assessment will show your:

RRSP deduction limit for the year

Unused RRSP contributions previously reported and available to deduct this year

Available RRSP contribution room (#1 minus #2)

If you have more unused RRSP contributions than you have RRSP deduction limit, that means you have an RRSP overcontribution.

What happens if you overcontribute to your RRSP?

A taxpayer is allowed to overcontribute to their RRSP by up to $2,000 at any time, Ryan…

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Ask MoneySense
I wish to leverage my HELOC to invest in dividend-paying investments. How would you advise I approach this? Is this an effective tax savings tool? Is there any financial institution or products you would advise?


Borrowing from a home equity line of credit

You know, Martha, in some circles, leveraging—or borrowing to invest—is a taboo subject. I find that funny because there is much less controversy when people borrow to:

Buy a car, which depreciates in value;

buy a house, which normally appreciates, but it can decline;

or take a vacation as a lifestyle investment.

So, why is there controversy around borrowing to invest? It is probably due to a lack of understanding, coupled with the fact that when leveraging goes bad, it’s not good.

Let’s talk about leverage. If you borrow $100,000 at 8%, what rate of return would you have to earn on your investments to break even? Would you guess 8%?

Most people would agree with that answer; it sounds logical, right? I mean, if you borrow $100,000 at 8% and paid $8,000 in interest costs then that would mean you would have to make $8,000 on your $100,000 investment to break even, which is 8%…

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The best financial apps for Canadians in 2024We started off the year with Mint shuttering its doors. Some of you may still be mourning, and that’s OK. The upside is that you have an opportunity to find other apps that can help you manage your finances easily. 

Choosing a financial app is a personal choice. So, where does one begin? We’ll take a deep dive into what financial apps are, what features to look for, and whether they’re safe to use. Then, we’ll get to the part you’ve all been waiting for—the noteworthy financial apps that should be on your list of downloads. 

What is a financial app?

A financial app or fintech app can help you manage your finances on a mobile device or computer. They may offer customized products and services, including product comparison and budgeting tools, or provide a centralized view of all your finances. 

There are many benefits to using a financial app, including convenience. For instance, some apps allow you to make purchases using a smartwatch or smartphone…

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When are TFSAs and RRSPs actually taxable?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:

U.S. stocks in TFSA

U.S. stocks in RRSP

Canadian stocks in RRSP


Tax considerations for your TFSA and RRSP

It’s great to hear we motivated you to start investing, Tawheeda. Stocks are a great way to build wealth for the long term, despite the short-run volatility. Tax plays a role in your portfolio construction and returns, so let me explain the implications. 

TFSA day trading: Do you pay tax?

Tax-free savings accounts (TFSAs) are mostly tax-free. When you buy and sell an investment for a profit, that is generally tax-free inside a TFSA, regardless of the type of investment. 

One exception could be if you are day trading in your TFSA. If you are engaging in frequent trading activity, there is a risk your profits could become taxable as business income…

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