How to retire at 55 with $586,000 + MORE Jan 27th

How to go about securing the best Retirement Plan in Canada.
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Université de Moncton: The new seniors on campus + MORE Feb 10th

Nursing student Danielle Theriault, left, works with a patient at the Université de Moncton’s Ecole de Science Infirmiere. (Photograph by Darren Calabrese) Every September, university campuses spring back to life as students move into their dorms and classes get underwa.... More »
retirement

TFSA or RRSP? Which is more popular—and why + MORE Feb 3rd

TFSAs win when it comes to flexibility. (Flickr) Q. TFSA or RRSP, which one is more popular today—and why? – Phyllis D. The RRSP marked its 50th-anniversary last year —but it looks like its Golden Age has already passed. While the RRSP still has more contributors than the TFSA, its lead is.... More »
 pension

How to get the pension income tax credit + MORE Feb 17th

Q: I am 65 years old and will have income for the next three years. I want to open a Registered Retirement Income Fund (RRIF) and transfer some money into it to take advantage of the pension credit on a $2,000 withdrawal. While doing so, can I then turn around and use that $2,000 as part of my con.... More »
Can I claim capital losses from a stock in my RRSP to reduce taxes?(Flickr)
 
Q. I bought BlackBerry shares in my RRSP back when they were trading at $76. They’ve dropped sharply since then. If I sell them in my RRSP, I can’t claim the capital loss to reduce my income taxes. What if I moved the shares to an unregistered account? I would have to pay tax on the RRSP withdrawal, but then could I sell the shares and claim the capital loss? — Liz S.
Sorry, Liz. Some tax-saving strategies are just wishful thinking, and this is one of them.
If you withdraw your BlackBerry shares from your RRSP and move them to a non-registered account, their book value will become equal to their market value on the day of the transfer, not the price you originally paid.
For example, suppose you bought 100 shares in your RRSP for $76 each, and now they have fallen to $17. If you transfer the shares to a non-registered account, you’ll have to pay income tax on the current market value of the holding, which is $1,700. And once those shares land in your taxable account they will have a book value of $17 each, not $76…

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How to retire at 55 with $586,000
Nathalie Ouelett, 54, works in the audit department of the Quebec government in Quebec City. She loves her job but says she has so much that she still wants to do in life that she’s going to hang up her hat from full-time work this July. “I have 177 sleeps to go,” says Nathalie, who laughs and says she was born ready to retire and can’t wait. “I’m not worried about being bored at all. I have lots of interests and plan to pursue them.”
From spending more time fixing up her rural cabin to signing up for swimming lessons and spending more time on her stained-glass hobby, Nathalie has planned well for the day in July when, 55 years of age, she will have completed 10 years at the government, where she can walk away with a Defined Benefit Pension plan that pays $17,000 annually for life—starting when Nathalie turns 60. “It might not sound like much because after all, I only worked at the government for 10 years, but I’m a good saver and can live on a modest income of $35,000 net for life and be very happy and that’s what I plan to do,” says Nathalie…

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An annuity that pays off —if you live long enough(By Khongtham /Shutterstock.com)
The “tontine” is a centuries old idea that seems poised for revival in time to prevent the tsunami of retiring Canadian baby boomers from outliving their money. Finance professor and author Moshe Milevsky thinks a new form of longevity insurance proposed this week by the CD Howe Institute is “a great idea.”
One of the problems of the decline of Defined Benefit pension plans in the private sector is that the alternatives do not provide the same sort of “mortality credits” that DB plans provide: in effect, those who die early subsidize those with longer lifetimes. RRSPs and TFSAs also lack this feature.
MORE: How to retire at 55 with $586,000
Add in extended longevity and chronically low interest rates and the proverbial warning about seniors eating cat food is again becoming current. About the only place DB plans are thriving is in the public sector, so it’s ironic that the public sector is being asked to come to the rescue of the next generation of impoverished seniors…

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Why a TFSA is a great way to sock it away for a rainy dayA Tax-Free Savings Account can be used for an emergency fund or saving for retirement if your RRSP room is gone.

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