How to go about securing the best Retirement Plan in Canada.
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Planning for retirement with little or no savings to draw on + MORE Mar 21st
Despite their best intentions, some Canadians, facing a variety of financial challenges throughout their working lives, are not able to save much towards retirement. It can be difficult to know how to manage in these circumstances, especially when so much of the financial planning advice that gets s.... More »
The upside to waiting until age 70 to take CPP benefits + MORE Oct 5th
Q. I am retiring next year at age 65 and I don’t know if I should take my CPP immediately, or wait. My friends and other people I know from work took their CPP when they retired and they are telling me I should take it when I retire. Are they right? When is the best time to draw CPP?
–Jit
A. H.... More »
What do to with a spousal RRSP at age 71 Jun 15th
Ask MoneySense
My question is in regards to a spousal RRSP that I have set up for my wife years ago. When she turns 71, do we have to turn it into something like a RRIF, which I did for my RRSP (I am older than her) and then withdraw from it annually? Or, could it be directly transferred to her TFSA.... More »
How much should I have in my RRSP? + MORE Feb 22nd
For many Canadians, investing in their registered retirement savings plan (RRSP) is the primary way they save for retirement. RRSPs are an invaluable tool, allowing you to stow away funds for golden years while reducing your taxable income today. However, there is no one-size-fits-all way to use the.... More »
How do the RRSP contribution carry forward rules work? Nov 2nd
If I have $25,000 contribution room left in my RRSP, can I take that all at once plus my regular RRSP contribution of $27,230 for the tax year 2020? Effectively making a contribution of $57,230 to my RRSP?— Lorraine
The rules around RRSP contribution room
As soon as a taxpayer starts t.... More »
Q. I am torn about making a key financial decision in my life. First, a little about myself. I worked for about seven years (actually, six years and 360 days) as a teacher in the Arctic. I resigned this year and have returned to the “south.”
Now, I have about a year to decide whether I cash out my federal public service pension plan or transfer the holdings into an annuity (about $93,000) and RRSP (about $71,500).
I have consulted with a financial planner at one of the large banks, who has made a seemingly convincing argument in favour of transferring the entire pension amount out. But I am well aware that I don’t know enough to be able to ask the right questions and make an informed decision. I am also aware the bank will benefit from my investment, as will my financial planner.
Can you give me some good advice on what I should do at this important juncture in my financial life?
–Kathy
A. I recently wrote an article on making the decision to keep your pension or take the cash, and you can read it here…
Now, I have about a year to decide whether I cash out my federal public service pension plan or transfer the holdings into an annuity (about $93,000) and RRSP (about $71,500).
I have consulted with a financial planner at one of the large banks, who has made a seemingly convincing argument in favour of transferring the entire pension amount out. But I am well aware that I don’t know enough to be able to ask the right questions and make an informed decision. I am also aware the bank will benefit from my investment, as will my financial planner.
Can you give me some good advice on what I should do at this important juncture in my financial life?
–Kathy
A. I recently wrote an article on making the decision to keep your pension or take the cash, and you can read it here…
12 top personal finance books to read this summer
– moneysense.ca
For obvious reasons, a lot of personal finance and retirement books come my way and, from time to time, we’ve dedicated a particular edition of this column to a single book. This one looks at a dozen noteworthy books I’ve read lately, or plan to—most of them published in the last few years.
If you want to learn about…global macroeconomics
Let’s start with global macroeconomics, which is top-of-mind for many investors and would-be retirees these days. With central banks around the world putting their printing presses into overdrive to combat the coronavirus bear market (however brief it may have been), I suggest reading Graham Summers’ The Everything Bubble: The Endgame for Central Bank Policy, first published in 2017. It describes what the author calls “serial bubbles”—not just stocks but virtually every asset class, including fixed income and real estate. The U.S. tech bubble was $7 trillion (U.S.) in size; the subsequent U.S. housing bubble, $14 trillion; and the U…
If you want to learn about…global macroeconomics
Let’s start with global macroeconomics, which is top-of-mind for many investors and would-be retirees these days. With central banks around the world putting their printing presses into overdrive to combat the coronavirus bear market (however brief it may have been), I suggest reading Graham Summers’ The Everything Bubble: The Endgame for Central Bank Policy, first published in 2017. It describes what the author calls “serial bubbles”—not just stocks but virtually every asset class, including fixed income and real estate. The U.S. tech bubble was $7 trillion (U.S.) in size; the subsequent U.S. housing bubble, $14 trillion; and the U…
Borrowing money to invest
– moneysense.ca
There are different ways to borrow to invest.
Opening a margin account
A simple option is with a margin account at a brokerage. Depending on the existing investments in the account, a brokerage will lend up to a certain percentage of the value to an investor, at a specified interest rate.
The amount of “maintenance excess” that needs to be kept in the account as collateral for borrowed securities generally ranges from 30% to 100% of the market value. Larger, established, blue-chip stocks may only have a 30% margin requirement, meaning up to $70 borrowed for every $100 invested.
Margin interest rates generally range from 5% to 10%, but can vary. The interest is tax-deductible when the borrowed money is being used to invest. If stocks fall, a margin account investor could have a “margin call” and need to deposit more funds, or sell stocks to reduce leverage.
Investment and RRSP loans
Investment loans with required monthly principal and interest payments are another option for borrowing to invest…
Opening a margin account
A simple option is with a margin account at a brokerage. Depending on the existing investments in the account, a brokerage will lend up to a certain percentage of the value to an investor, at a specified interest rate.
The amount of “maintenance excess” that needs to be kept in the account as collateral for borrowed securities generally ranges from 30% to 100% of the market value. Larger, established, blue-chip stocks may only have a 30% margin requirement, meaning up to $70 borrowed for every $100 invested.
Margin interest rates generally range from 5% to 10%, but can vary. The interest is tax-deductible when the borrowed money is being used to invest. If stocks fall, a margin account investor could have a “margin call” and need to deposit more funds, or sell stocks to reduce leverage.
Investment and RRSP loans
Investment loans with required monthly principal and interest payments are another option for borrowing to invest…
