Get Ready For the RRSP Rush + MORE Feb 24th

Blair Gable
OTTAWA — A new study says the Conservative government’s plans to double contribution limits for tax-free savings accounts would cost billions in lost tax revenue and primarily line the pockets of wealthy Canadians.
The report by the left-wing Broadbent Institute says most Canadians would not benefit from the plan to nearly double the TFSA contribution limit to $10,000 a year, up from $5,500.
Instead, the report says, they would bear the burden of reduced public services or higher taxes to offset the lost revenues.
The study was written by Jonathan Rhys Kesselman, an economist whose research on so-called tax-prepaid savings plans laid the groundwork for the government’s initial introduction of TFSAs in 2009.
Finance Department estimates suggest the accounts reduced Ottawa’s revenues by $65 million in 2009, $165 million in 2010 and $160 million in 2011. Those same estimates projected a hit of $295 million in 2012 and $410 million in 2013.
Parliamentary budget officer Jean-Denis Frechette released his own report today on the short- and long-term impact tax-free savings accounts will have on government finances…

(Steve Prezant/Getty Images)
Q: As I understand it, RRSPs have tax withheld at 30% and then you are taxed based on your income for that year, which could mean a return or more taxes assessed depending on your annual income. If you decide to do pension income splitting with your spouse, does your RRSP need to be converted to a RRIF before income splitting? Are there any other tax implications involved with income splitting? When income splitting, can you withdraw from one spouse’s RRIF and then split the income between husband and wife and continue every year after to help reduce taxes?—Ken
A: I’m always amazed at how much more information exists about contributing to RRSPs versus withdrawing from them. It’s no wonder, given that the vast majority of financial information floating around out there comes from the financial industry. They make money when you invest, not when you divest. But after all the hard work you put into amassing your retirement savings, you owe it to yourself to try to figure out the best way to draw down on your assets…

CP PHOTO/Jonathan Hayward
Five stories in the news today, Feb. 24:
TENTATIVE SETTLEMENT AVERTS CN RAIL LOCKOUT
A lockout of about 4,800 Canadian National Railway workers was averted late Monday when the company and Unifor reached a tentative settlement. Union president Jerry Dias told The Canadian Press that the deal “came together when the company realized that the government was not going to interfere.” Unifor said no details of the agreement would be revealed until after ratification votes are held over the next three weeks. Read more.
STUDY: UPPING TFSA LIMITS A ‘TIME BOMB’
A new study says the Conservative government’s plans to double contribution limits for tax-free savings accounts would cost billions in lost tax revenue and primarily line the pockets of wealthy Canadians. The report by the left-wing Broadbent Institute says most Canadians would not benefit from the plan to nearly double the TFSA contribution limit to $10,000 a year, up from $5,500…

Sun Life survey also finds working Canadians are more worried than retirees about outliving their savings.

There’s just 11 days until this year’s RRSP contribution deadline – will you be scrambling to make the most of your return?
While RRSPs can be used a multitude of ways, and enjoy a variety of tax benefits, it’s not always clear whether they’re the right choice for your finances. Check out our retirement savings spotlight below, and see if you should set up an RRSP while there’s still time.
Your RRSP FAQs – Answered!
Using an RRSP to save for retirement, homeownership or education is meant to be an easy way to earmark funds for the future – but the accompanying tax and contribution requirements are confusing for many. Here, we answer some of your top RRSP FAQs.
Read Gordon’s Blog | Your Top RRSP FAQs – Answered
The Best Credit Cards for Wedding Planning
Did your sweetheart pop the question last weekend? Congratulations – you’ve now entered the wedding planning stage. Pulling together such a momentous event can be a costly and stressful process – but with all that credit card swiping comes big point earning potential…