Investing tips for dual citizens of Canada and the U.S. + MORE Feb 3rd

All about Retirement Planning in Canada. Learn the ins and outs and get the latest news.
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Avoiding future interest is one way to look at your return on investment May 12th

Q. I’m 47 years old and, after suffering a personal injury, have just been awarded a medical pension of $400 per month. The money is indexed annually and payable for life. I can opt for a cash-out and receive $120,000 upfront, but I’m unsure which is the smarter option. My mortgage renews in 202.... More »
 retirement planning

Why repaying student debt early is the best investment you can make + MORE Feb 17th

Q. I’m a 23-year-old who just graduated with a Masters degree and I have $30,000 in student debt ($20,000 provincial, $10,000 federal). I also just got a job with an annual salary of roughly $60,000. My question is what is the best way to invest my money (index mutual fund, stocks, online Rob.... More »
 retirement planning

Millennial homebuyers and seniors among the winners of Budget 2019 + MORE Mar 24th

The Liberals’ last budget of this mandate sets the stage for the October federal election and includes a sprinkling of money for voters across a wide spectrum. But there are also gaps in spending for some groups. Here’s what the budget does and doesn’t do, for five key voting group.... More »
 retirement savings

RRSP deadline: A procrastinator’s guide + MORE Feb 24th

The March 1 RRSP deadline is fast approaching. When it comes to last minute RRSP planning, however, nothing surprises Michael Berton anymore. The Vancouver-based CFP has seen people dump cash in their accounts at the last second or invest in something unusual because they were pressed for time. He.... More »
Q: I have a large Employee Share Purchase Plan that I have participated in for a number of years. In this plan, for every share I buy (not discounted) my employer gives me a matching share. I pay tax on the shares the company purchases for me.
My U.S. accountant (I have U.S. tax obligations) says that I can include this tax component when calculating the adjusted cost base for my employer purchased shares. However, my Canadian accountant is saying no.
Since I paid tax on the employer shares, I would think this should be included in my cost to acquire the shares?
– Kelly
A: Employee share purchase plans (ESPPs) are indeed common, Kelly, and cross-border issues tend to make them more complex. There are two potential cross-border issues that Canadian taxpayers may need to deal with: 1) buying U.S. shares; and 2) dealing with U.S. tax obligations if you’re a U.S. citizen.
I will assume that your plan is a non-registered ESPP, so not a registered plan like a Registered Retirement Savings Plan (RRSP), since you’re asking about capital gains tax
For Canadian tax purposes, when you’re buying shares in an ESPP, you need to calculate the adjusted cost base (ACB) for all the shares you have purchased over the years…

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Q. I am a dual Canadian/U.S. citizen. Due to this, I cannot make use of a TFSA, so once my RRSP is maxed out, I’m stuck with non-registered accounts. I plan on putting a large part of my savings into a U.S. robo-advisor or U.S.-listed ETFs. As for my RRSP, I was wondering whether I should focus on Canadian ETFs to diversify my already U.S.-heavy portfolio? – O.
A. More than any other country, the U.S. keeps its expatriates on a short leash. If you’re a U.S. citizen, you’re generally considered a U.S. person for tax purposes, even if you have never lived on American soil. And as such, you may be required to file regular reports with the IRS regarding your investment holdings. With this in mind, O., dual citizens such as yourself should seek professional advice from a specialist in cross-border tax issues. I can only offer some general guidelines here.
First, you’re wise to avoid using a TFSA. While Canada and the U.S. have a tax treaty that generally harmonizes the way pensions and retirement accounts are taxed, this does not cover Tax-Free Savings Accounts: if you’re a U…

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Q. There are lots of articles on retiring early and whether or not to take CPP at age 60, but one small aspect that never seems to be covered is the impact of zero income years on the answer. CPP ignores eight zero-income years in calculating your benefit, doesn’t it? So there are really 34 years they’d count between 18 and 60.
So if someone already has several zero income years (i.e. from going to post-secondary school or travelling when they were young), wouldn’t delaying CPP reduce their payment by 1/34—or whatever—for each additional zero income year after 60? Or am I way off the mark? Can you explain this to me? Thanks for your time,
— Bob
A. Hi Bob. This is a great question, as it highlights how challenging it can be to understand how Canada Pension Plan retirement benefits are calculated. For many Canadians, the CPP retirement benefit is an important part of their income after they’ve stopped working. Even if you’re not near retirement yet, it’s worthwhile to delve into how your monthly CPP payment is determined…

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It’s RRSP season. Don’t forget rule No.1!Whatever route you choose, just be sure you save for retirement, writes Gordon Pape.

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It was hard to know it at the time, but February 26, 2008 has become one of the most significant dates in Canadian investing history. That afternoon, Jim Flaherty, then Minister of Finance, unveiled the Conservative party’s budget and, for the first time, mentioned the Tax-Free Savings Account. On January 2, 2009, the first TFSA was opened and $5,000—the maximum contribution limit that year—was deposited by some savvy investor.
When Flaherty introduced the TFSA, he listed a variety of ways someone might use the account. An RRSP, he said, was meant for retirement savings. A TFSA, where after-tax dollars can grow tax-free, was “for everything else in your life,” like buying a first car, saving for a first home and setting aside money for a “special project” or a personal indulgence. With contribution room only increasing by $5,000 per year for the first few years, using it to save for something made a lot of sense.
It’s now been a decade since the TFSA was born and, as with most things that age, it’s grown and matured in ways the Conservatives likely didn’t imagine…

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