Investment Income and Income Tax
Investments can deliver a major source of income and tax implications for individuals. Each major type of investment income is subject to different tax treatment.
Understanding how your investments are taxed is an important consideration for investment planning since after-tax yield is more important than gross returns. The most common types of income most investors will receive are interest, dividends, and capital gains.
Tips on Retirement Savings Plan
A retirement savings plan is a way of protecting your post-retirement financial lifestyle. However, in recent times, recessions, stock-market declines, housing market bubbles, joblessness, and a global pandemic have created a series of challenges for people trying to start, grow, or maintain a retirement savings plan. With all these economic uncertainties, it’s natural to wonder if you’re doing all you can to protect your retirement nest egg. Taking a back to basics approach can instruct you on how to keep your retirement financial plan on track during uncertain economic times and beyond.
5 Ways to Avoid Capital Gains Tax
Capital Gains tax occurs when you sell capital property for more than you paid for it. In Canada, you are only taxed on 50% of your capital gain. For example, if you bought an investment for $25,000 and sold it for $75,000 you would have a capital gain of $50,000. You would then be taxed on 50% of the gain. In this instance, you would pay tax on $25,000. In Canada, there are some legitimate ways to avoid paying this tax: Tax shelters, Lifetime Capital Gains Exemption, Capital Losses, Deferring, and Charitable Giving.
Converting an RRSP to a RRIF 2021
If you are nearing retirement, you may be starting to think about creating retirement income for yourself from your RRSPs. Registered Retirement Savings Plans (RRSPs) are considered accumulation vehicles. This means they are used to save for your retirement in a tax efficient way. When the time comes to start using your hard-earned savings to fund your retirement, you may want to consider moving them to a payout vehicle called a Registered Retirement Income Fund (RRIF).
What to Consider When Drawing Down Your RRSP
If you have been a good saver and contributed religiously to your RRSP, you should be rewarded with a sizeable six or seven figure RRSP that would make your retirement that much more enjoyable. The only issue now is – how do you get the money out of the RRSP without paying more tax than you should? Typically, it is advised that investors leave their RRSPs alone for as long as possible to take advantage of the tax-free growth. While this can be true for many people, it is important to crunch the numbers before you retire to make sure this makes the most sense for your unique retirement situation. Many retirees, especially those with a high net worth, may find there could be a more efficient way to withdraw retirement income.
TFSA or RRSP? Take your pick 2021 Update
Whether you should invest in a Tax Free Savings Account (TFSA) or a Registered Retirement Savings Plan (RRSP) is a question that affects almost every investor. For most, the answer is “a bit of both.”
If you have a looming short or medium-term need (under five years), the untaxed TFSA withdrawals are likely the right choice. For longer term retirement needs, you’ll want to invest in an RRSP.
Essential Tax Numbers for 2019, 2020 and 2021
With a new year comes new tax numbers! Below is a quick reference of important tax numbers for three years, including 2021. CRA has utilized a 1% indexing (inflation) for those numbers subject to that condition.
The Saving Versus Mortgage Dilemma: How to Best Utilize
Investors often are conflicted on what to do with surplus cash. Your options for available cash usually fall into three categories: spending it, investing it, …
Creating and Maintaining an Estate Plan
While uncomfortable to think about, effectively planning ahead for when you are no longer here can save your loved ones a great deal of time, money, and emotional hardship. Estate planning can be complicated, but there are some basic “must-do’s” that should be regularly updated and reviewed. Below is a simple checklist for making sure your estate plan is up to date.
6 Tips for More Successful Investing
There is no one and done way to invest, but there are a few tried and true principles that have served investors well over the years.
