Not sure how to make a savings plan? Read on…
Latest News
Mortgage or retirement savings? Where to get the most bang for your extra bucks + MORE May 8th
Not sure how to make a savings plan? Read on...
This Toronto millennial makes $60,000. He wants to organize his finances and build his savings. How can he start? - thestar.com“Personal finance can be complicated even though my life seems rather uncomplicated,” Michael said.Continue Readin.... More »
Life insurance for kids: Do you really need it? Jul 24th
Buying life insurance for kids is probably the last thing on your mind when you’re in the throes of diaper changes and round-the-clock feedings. But the early stages of parenthood don’t last forever—and it’s never too early to start planning for your little one’s (or ones’) future.
W.... More »
Nervous about protecting your retirement savings? Here’s what you shouldn’t do + MORE Apr 25th
As the stock markets tumble in the time of pandemic, it’s difficult to know what steps to take to protect savings..... More »
What types of tax-free savings accounts (TFSAs) exist? + MORE Jun 19th
A tax-free savings account (TFSA) is a fantastic way to earn money on your savings, without having to pay tax on those earnings. Registered by the federal government, TFSAs are available to Canadians aged 18 and older. Unlike a registered retirement savings plan (RRSP), you cannot deduct contributio.... More »
Ways to “unlock” retirement savings in a LIRA Dec 12th
Q. When I retired at age 63, the financial institution that managed my DPSP account paid the company-contributed portion (approximately $30,000) into a LIRA.
Given all the constraints related to drawing down a LIRA/LIF, I am now 65, living in BC, and have two questions:
Since I was already at re.... More »
2020 Tax Changes by Province or Territory
– ratesupermarket.ca
The word “taxes” is enough to give most of us a headache. Paperwork, deductions, contributions, Canada Pension Plan (CPP), this type of tax, and that type of tax, federal and provincial — what a nightmare. The good news is the tax-filing deadline for most Canadians is April 30, 2020, which is still months away. And, unless you are making last-minute Registered Retirement Savings Plan (RRSP) contributions, you won’t have to think about your 2019 taxes for a few more weeks.
Nevertheless, as the new year chugs along, an entirely new set of tax changes will come into effect throughout 2020. Many Canadians will see lower taxes, albeit the changes are subtle.
To start, the basic amount Canadians can earn tax-free will increase by $1,160 to $13,229, which will result in lower federal income taxes. This amount is expected to rise to $15,000 by 2023. But this won’t mean much for those in the top tax brackets, who may not see a benefit at all.
The CPP tax rate is rising by 0.15%, that’s an increase of up to $97 in 2020…
Do RRSPs Save You Taxes in the Long Run?
– ratesupermarket.ca
For the first-time RRSP investor, it can be a challenge to understand how RRSPs can save you money. Contributions to your RRSP reduce your immediate tax burden, but you do pay tax on withdrawals. While it’s true that RRSPs may be more properly understood as a vehicle for tax deferment instead of savings, you may still pay less in tax in the long run. Here’s how the math works on RRSPs so you can make the most of this very popular savings vehicle.
How do RRSPs save taxes?
Contributions to your RRSPs reduce the tax you pay for your upcoming income tax payment. The amount of your contribution is tax-free for that year. For example, if you make $50,000 and put $10,000 in your RRSPs, you’ll only pay income tax on $40,000.
You do pay tax, however, whenever you take money out of the RRSP. It is added to that year’s taxable income. Here’s where you can save money with proper planning. If you make contributions during a high-income year, you save on income that would be taxed at a higher rate…