Sears pension ‘slap’ shows need to diversify savings + MORE Sep 21st

Q: I have a son that is living in the U.S. (for the last 20 years) and married. Would he have to pay taxes in the U.S. when he inherits from his parents? How would the taxes work in this case?
–Alain
A: Alain, generally speaking no, your son will not have to pay any tax on inherited money or property. That being said there are assets that when inherited in the U.S. are taxable to the beneficiary—such as U.S. retirement accounts and U.S. savings bonds.
If the parent is Canadian and the asset has been taxed on their final Canadian tax return, the beneficiary will inherit the account/asset with a basis equal to the fair market value on the date of death.

Q: I have a question regarding taxes in TFSA investment accounts. Do we have to deal with any tax issues when we purchase U.S. or international ETFs? And if so, what are they?
–Margy
A: The Tax-Free Savings Account (TFSA) allows eligible Canadians to invest in a variety of investments. The options are only limited by the offerings of the financial institution…

Employer-sponsored pension plans force people to save for retirement. But what happens when a company isn’t healthy enough to fund them?

Living paycheque to paycheque may not sound ideal, however it is a stressful reality for many Canadians, as shown in a new survey from the Canadian Payroll Association (CPA).
The CPA recently released the results from its ninth annual Survey of Employed Canadians and found almost half of employed Canadians (47 per cent) would struggle if their paycheque was delayed by even a week. This number increases for millennials in their 30s (55 per cent), and for those in their 40s (51 per cent).
Comparatively, 41 per cent of Canadians spend all or more of their entire paycheque, and most cite higher costs of living as the cause. This number, however, drastically shifts depending on where you live. Only a third of those in Quebec spend all or more of their net pay, while 59 per cent are living paycheque to paycheque in British Columbia. Ontario seems to line up with the national averages, as 49 per cent live paycheque to paycheque while 42 per cent spend all or more of their pay.
Lack of emergency funds or savings
The survey also asked employed Canadians how difficult it would be to come up with $2,000 within a month’s notice, in the case of an emergency…

Q: Is the tax rate on a LIRA the same as the RRIF if I die and the beneficiaries are my children?
—Brian
A: First, Brian, I want to clarify the difference between a LIRA and other registered accounts. A Locked-In Retirement Account (LIRA) or Locked-In Retirement Savings Plan (LRSP) is an RRSP created by a transfer of money from a pension plan upon leaving that pension. It may have been from a Defined Contribution (DC) pension plan where you bought mutual funds during your employment or it may have been from a Defined Benefit (DB) pension plan where you chose a lump-sum payout instead of a future monthly pension payment.
A LIRA is much like a regular RRSP. You can buy the same investments. The investments grow tax-deferred. Withdrawals are taxable in the future. One difference is that there are maximum annual withdrawals for a LIRA, whereas an RRSP has no maximum withdrawals. You can only take withdrawals from a LIRA prior to age 55 in special circumstances, whereas RRSP withdrawals can be made at any time…

Employer-sponsored pension plans force people to save for retirement. But what happens when a company isn’t healthy enough to fund them?