Should you borrow to pay expenses on an investment property? + MORE Nov 18th

There are plenty of retirement plan options in Canada! Stay on top of the best plans right here.
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What’s my RRSP contribution limit for 2022? Nov 16th

If you’re like many Canadians, you’re hoping you’ve paid enough tax in 2022 and may even be looking forward to a hefty tax refund. (The deadline for filing this year is April 30, 2023, and since that date falls on a Sunday, you actually have until May 1, 2023 to file.) You can help ensure that.... More »
 freedom 55

Should you be worried about retirement? If you don’t have a pension, you probably should + MORE Feb 24th

A new survey reveals that many Canadians suffer from an appalling lack of knowledge when it comes to retirement planning, writes Gordon Pape..... More »

Paying yourself first Nov 2nd

There is perhaps no single piece of financial advice more frequently repeated than “pay yourself first.” And with good reason. It’s tough to grow savings if you prioritize all your spending needs and wants ahead of putting money away. While some of us fully intend to stash whatever is left at .... More »

Is a personal injury settlement taxable, and can it impact OAS or GIS benefits? + MORE Aug 24th

Q. I received a small settlement for an Ontario car accident, which my lawyer says is non-taxable, and so noT4A will be issued. If I deposit the funds into a bank account, will this one-time settlement clawback my OAS and GIS benefits? –J  A. I’m sorry to hear about your accident, J. Hopefully .... More »
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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 »
Q. My daughter, Sonia, is 27 years old with a bachelor’s degree in English from a Toronto university. Needless to say, she is currently not working in the field that she was trained in. She thinks going back to school would enhance her employability in the writing and publishing industry, so she applied to—and was accepted at—two universities in New York City.
The cost of tuition as well as living in the U.S. is not cheap. Tuition for a master’s degree alone amounts to $53,000 USD, or about $70,000 CAD. Now the question is: How does she pay for it? Sonia has $40,000 in a stock market account, a $25,000 TFSA* and a $40,000 RRSP account, all started by her at the age of 18. Do we liquidate everything, and what are the consequences of that?
I have other questions as well. Does she take out a line of credit? Or some other kind of loan? Can she get a student loan for an American university? Can a Canadian get American scholarships for things other than sports? Any advice would help.
–Tammy
A…

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Q. I have an investment property that I rent out. Now that I’m retired, I would like to use the income to supplement my retirement income. That would leave me with no money to pay the expenses on the property (mortgage payment, maintenance, utilities, etc.).
I’m wondering two things: One, can I borrow all my expenses from my personal home equity line of credit (HELOC), thereby making all of the expenses and interest tax deductible?
And, two, looking into the future, let’s say I have now done this for two years and the expenses are $20,000 per year. I now have a debt of $40,000 in my LOC. The interest costs are now double they were in year 1. Is all of that interest tax-deductible for year 2, or only the interest for year 2 expenses?
–Garry
 A. Many rental property owners end up in a similar situation as you in retirement, Garry—that is, a point at which you need to access some of the value of your rental property, one way or another.
If you literally have no money to pay the expenses, as in no remaining investments to draw down upon, I think you need to consider if and when to sell the rental property…

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1. Face the facts
Saving for retirement is always a challenge. But a number of factors have added up in recent years that make it even tougher on those entering or preparing to enter retirement. Jonathan Chevreau, Retired Money columnist for MoneySense, says the strength and predictability of defined benefit pensions (which pay out until death based on your earnings) is disappearing, as corporate plans move to defined contribution pensions (which build wealth based on employee and corporate contributions but do not pay out based on guaranteed formulas). That’s hard enough, Chevreau argues, but where “financial oppression” really takes hold is that retirees are stuck with bond yields that are sitting close to zero, which means nest eggs stop growing as fast and have to be drawn down a lot faster than they were for past generations.
2. Know when to start taking CPP and OAS
You can start taking Canada Pension Plan benefits between the age of 60 and 70. It’s worth spending some time figuring out which age is right for you…

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