TFSA, tax changes: Time to review your financial plan + MORE Dec 24th

This weekend’s meet and greet by finance ministers to discuss such things as CPP reform showed sharp divisions among the provinces.

TORONTO – The Conference Board of Canada says the proposed Ontario Retirement Pension Plan will mean long-term increases in income that offset the small negative effect on the economy over the near-to-medium term.
In a cost-benefit analysis of the Liberal government’s pension plan, the Conference Board says the increase in mandatory savings initially results in a period of reduced household spending as pension contributions lower family income.
The negative effect on Ontario’s GDP in the near term is partially offset by the fact that individuals are expected to reduce their RRSP contributions when they start paying into Ontario’s pension plan.
ORPP: Low income, part-time workers to take home less »
The Conference Board — an independent, not-for-profit applied research organization — says the impact on overall real GDP is also offset by a fall in imports as less household spending is used to buy foreign goods and services.
Expected decreases in Employment Insurance and Workplace Safety and Insurance Board payroll premiums “further mitigate the short-term economic impact” of the Ontario Retirement Pension Plan…

As the last days of 2015 wind down and we look forward to spending time with friends and family over the Holiday Season, our thoughts may not necessarily be focused on financial planning. The truth is that we should always be vigilant about our money matters. Will you use the countdown to 2016 to review your financial matters?
Review your Financial Matters: Are your Savings on Track for the New Year?
The end of the year is a good time to take stock of our current financial situation and make a plan to budget for our 2016 contributions to our savings plans: Tax-free Savings Account (TFSA), Registered Retirement Savings Plan (RRSP), and Registered Education Savings Plan (RESP).
Registered Retirement Savings Plan (RRSP)
The maximum RRSP limit for 2015 is $24,930.00.00. In addition to your allowable annual contribution amount you can carry forward any unused contribution from 1994-2014. Depending on your tax bracket, maximizing your total RRSP room can potentially create a sizeable tax rebate…

OTTAWA – The tax rules are changing in 2016 and even if Canadians don’t make enough to be hit by the new top federal income tax rate, their financial plans are going to need to be reviewed.
The vast majority of Canadians will not be affected by the new tax bracket for income over $200,000 a year, but everyone will see their tax-free savings account contribution limit be reduced back to $5,500 for 2016.
Combined with the new lower tax rate for income between $45,282 and $90,563, even those who aren’t in the top one per cent of income-earners should take a look at their finances to ensure they’re on track.
Peter Bowen, vice-president of tax and retirement research and solutions at Fidelity Investments, says for many people this might be the most important tax planning season they’ve ever had.
“With the changes just implemented both to tax rates and TFSAs, everybody needs to take care to make sure their tax planning is right for their own situation,” he said. “We always encourage people to get financial advice, but with these changes in place, it is more important than ever…

A new report by Statistics Canada says automatic increases in registered pension plans are most helpful to people who don’t save much in registered retirement savings plans.