I wish we could call a "time out" for politicians. Wouldn't it be great if we could send them to some dark room in Parliament and make them think about what they're doing? I'm talking about the tax you pay on your RRSP and all other types of investment accounts. Tax on TFSAs, RESPs and RDSPs. Yes, you're reading this correctly.
Filing your tax return may seem like an unnecessary task if you earned little to no income during the year. Or if you are expecting a refund, your attitude may be that there is no rush to file by the April 30 tax deadline. However, there are some very good reasons to file your tax return on time every year.
It is clearer than ever that most Canadians have to fend for themselves when it comes to retirement. For most retired Canadians, the combination of an employer's Defined Benefit Pension Plan, CPP and Old Age Security (OAS) provided them with a secure retirement lifestyle. This is not the case in 2013. Why?
When I'm lecturing to students I like to ask them how much a $100 pair of shoes costs. The most common answer is $100 plus tax. Would you believe me if told you it could be as much as $1,376.46? As a 20-year-old, if you convinced yourself not to buy the shoes, and invested it instead -- with an assumed rate of return of 6 per cent -- you'd have $1,376.46 by the time you were 65 years old.
We all want to retire at some point, so saving money for the future is a good idea. And RRSPs are one of the best tax shelters available to Canadians. But RRSPs do not offer a great deal of flexibility if you need to withdraw the money early. Before you make an RRSP contribution, you should decide if it is the right choice for you.
As your assets grow and family gets bigger, it is important to ensure that you are aware of the tax implications of death so that you are able to pre-plan your estate and leave as much money as possible to your intended beneficiaries. Therefore, when you make your estate plan with a professional, it is important to keep the following tax strategies in mind.
Given 25 years of stagnant wages for middle-income earners and real wage decreases for lower-income earners, it's not surprising how difficult it is for people to save. Canadians have a low, and declining rate of saving, with some people using their Registered Retirement Savings Plans (RRSPs) as unemployment insurance programs.
Bill C-25, an Act Relating to Pooled Registered Pension Plans received Royal Assent on June 28 this year, making it officially part of Canadian Law. Unless the cost of administration is low, and unless the pooled amount of investment is high -- the banks will profit and workers will continue to struggle to make ends meet before and after retirement.