RRSPs are a great savings vehicle, but they can’t stay as RRSPs forever. By the end of the year in which you turn 71, you must either cash out your RRSPs (and pay income tax on the full amount), purchase an annuity, or convert them to a Registered Retirement Income Fund (RRIF), or choose some Read more about Retire with an RRIF[…]
If you have ever sold a stock that you have made a profit on, you may not have paid an upfront tax, however, when you did your income taxes, you may have realized that you owed the Government money! This tax owed on the sale of a security for profit is known as a Capital Read more about Understanding Capital Gains Taxes[…]
Paying for your child’s education will help him or her get a head-start on life, and remove the burden of having to pay for their own education via working and/or student loans. The government of Canada has a special investment vehicle called a Registered Education Savings Plan (RESP) that combines tax deferrals with eligibility for Read more about Saving Money with an RESP[…]
What we often think of as a pension is actually a specific subset of a pension called a defined benefit (DB) pension. In addition to DB pensions, there are also other pension plans such as defined contribution pensions (DC) and hybrid or cash balance plans. Read on for more details… Defined Benefit (DB) Pension A Read more about Pensions: An Introduction[…]
The Registered Retirement Savings Plan (RRSP) does not eliminate taxes; it defers them. What does that mean? In our ongoing blog, we recently covered how a Tax-Free Savings Account (TFSA) can help your investments grow by shielding them from taxes. An RRSP, also protects your investments from taxes, but does it in a subtly different Read more about Your RRSP: The Key to Your Retirement[…]
The Shiller P/E (price to earnings) ratio is one of our favorite fundamental valuation metrics. Unlike technical indicators, which are typically based only on stock prices and volumes, fundamental metrics take into account actual data from the company associated with the security, such as corporate revenues, earnings, assets, etc. Many investors feel that over time, Read more about The Shiller P/E Ratio[…]
The government can use taxes to discourage behaviour, or give tax breaks to encourage it. Several years ago, the Government of Canada decided to encourage saving by creating a Tax Free Savings Account (TFSA). Tax-Free Savings Accounts (TFSA) operate in the following manner. One first earns income from various sources that is taxed. Then, this Read more about How a TFSA works[…]
One question that we get asked a lot is, “What is the difference between an index, an index fund, and an exchange traded fund (ETF)?” The short answer is that you cannot buy an index (it is a formula to value a market) but you can buy an index fund (which typically trades like a Read more about Indices vs. Index Funds vs. Exchange Traded Funds (ETFs)[…]