How To Get The Most Out Of Your RESPs This Tax Season + MORE Feb 24th

Did you know that the 2016 Registered Retirement Savings Plan (RRSP) deadline is February 29th? Although 61 per cent of Canadians plan on a making contribution (down from 64 per cent compared to last year), there’s still a lot of confusion about the specifics of the program, this according to BMO’s sixth annual RRSP study.
Those who have already made a contribution this year have put aside an average of $3,984, while those planning to make a contribution say they plan on contributing an average of $3,327. This is an encouraging sign since both numbers are up slightly from last year, but understanding how your RRSP works is arguably just as important as saving for your retirement.
Looking to learn more about RRSPs? Sign up for our handy RRSP guide>
How to Contribute to an RRSP
To contribute to your RRSP, you need to open up an account first; this can be done at your financial institution, a discount brokerage, or even with a robo-advisor. The money you contribute to your RRSP can then be used to buy different investments…

Q: We are currently in position to either pay down our lines of credit or pay down our mortgage. We recently sold one property and renovated and moved into another. The lines of credit were used to help renovate the property we just moved into. We now find ourselves in a debt vs debt standoff. Do we use the money to pay off the mortgage, leaving us with about $70,000 owing and about $150,000 on a line of credit, or do we tackle the line of credit, which would leave us with $15,000 in the bank and a $290,000 remaining mortgage? — Debt vs. Debt, Aurora, Ont.  

Answer 1: As with any debt, pay off the one with the highest interest first. Mortgages tend to have unfavourable interest and compounding structure, making them the better bet to pay down first. Lines of credit have more simple interest calculations, making them easier to pay down over time. I have clients who have taken out lines of credit to pay off their mortgages, once they got low enough. If you create a spreadsheet and calculate the total interest paid on the mortgage and the lines of credit, the answer will be obvious…

It’s tax season again! And while it’s not typically considered the most wonderful time of the year, for parents, there are ‎a number of things you can do to bring a little bit of joy to the season.

For starters, if you are one of the majority of Canadians expecting to get a tax refund from the government this spring‎, here’s a tip to make that refund grow by 20 per cent (the amount of the federal government’s basic Canada Education Savings Grant) or more: put it into a Registered Education Savings Plan (RESP) for your children. In some provinces that could be increased by another 10 per cent! You can get more details on these education savings grants — including a number of rules you should pay attention to — here.

But what if you have an RESP and are getting ready to send your child off to university later this year? What do you need to think about as you crack open the vault and tap into those hard-earned savings?

First, you need to pause and pat yourself on the back. Your child is getting ready to go to university AND you have some money set aside to make that possible…