Posted on May 17, 2012
Tax Free Savings Account (TFSA)
The TFSA, introduced in 2009, is a registered account in which investment earnings, including interest, dividends and capital gains accumulate tax free. There is no upper age limitation and no earned income qualification under this plan.
Taxpayers over the age of 17 may contribute up to $5,000 each year to such an account, or their relatives and supporting individuals may make contributions for them. The TFSA is exempt from the normal "Attribution Rules" which require higher earners who transfer or loan money to their spouses to report earning on the transferor's tax return.
While there is no tax deduction for contributions to the account, every Canadian will accumulate "TFSA Contribution Room" each year simply by filing a tax return. NOTE: File a tax return for everyone over 17 for this purpose, as well as for eligibility for GST Credits. If you can't afford to make a contribution, a taxpayers TFSA contribution room may be carried forward to the next year, allowing for a larger contribution in the following year.
Withdrawals from a TFSA are not reported as income, and free up contribution room of an equivalent amount. Note: You cannot contribute more than your TFSA contribution room in a given year, even if you make withdrawals from the account during the year. If you do so, you will be subject to a tax of 1% of the highest excess TFSA amount in the month, for each month you are in an excess contribution position. Recipients can take the money out for whatever purpose they wish and then put the money back into the TFSA to grow when the withdrawal need is met and new savings are achieved. This also has no effect on any income tested benefits, such as the Canada Child Tax Benefit or Goods and Services Tax Credit. Therefore you can save and earn on a tax exempt basis while continuing to benefit from income redistribution provisions.
Take Maximum Advantage of your RRSP Contribution Room.
You hear so much about RRSP's because it is big business and all the financial institutions are competing for their share of the $250 billion dollar pool of RRSP money. Every January and February you see even more advertising as the deadline for contributing to an RRSP, for the previous tax year, is 60 days from the start of the year. Note: The cut off date is March 1st (on a non leap year), and February 29th (on leap years).
RRSP - the most widely used tax shelter in Canada.
There are many good RRSP reference books available at your local bookstore. The shelves are filled with them each year and provide detailed information about all the limits, rules, types, and exit strategies. My primary purpose is to discuss the tax deferral benefits. Also I want to point out some of the lesser known ways of taking advantage of your RRSP and to make you aware of mistakes that people make with their RRSP's.
Posted on May 5, 2012
The association membership is a sort of a guarantee for the reverse mortgage broker, because then a senior knows to whom to contact, if she or he doubts something. The property location will determine the location of the reverse mortgage broker.
1. Use The List Of The Brokers For The Shopping.
The reverse loan is a long term commitment, which means, that the broker and the lender must be reliable and well-known long term ventures. One sign is the brand image of the company, because only the good ones will reach the good fame. Step one in finding a company is to prepare a list of reverse mortgage brokers. Collect the names of the candidates from the different sources. The bank manager, the press, other seniors, ads and internet.
Step two is to cut the names down to twenty and to send the same quote request to all of them. Before you can do this, you must have collected enough information about your needs and the different financial products and met the counselor.
2. Compare The Quotes.
If you still think, that the reverse mortgage brokers are selling the same products with the same prices, it is a time to change your opinion. The reverse loans are like whatever products, which do not have any fixed selling terms. The economic situation will influence greatly on the prices and the only way to get the best deal is to follow the market long enough, to use special offers and to ask quotes regularly. You have to do your homework.
3. Select The Five Best Quotes.
You must show, that you are serious with your deal. When you get the first quotes from the brokers, pick the best five and ask each of them once again, what is their best offer. You can tell directly, that you have other quotes, which are as good as yours. Will you do it better?
4. Make The Best Two To Compete With Each Other.
Nobody wants to be a loser, especially not the reverse mortgage broker, who has been in contact with you several times and done a lot of work for your offer. When you let him know, that there are two offers, which are equal, I am sure each is willing to talk about the terms. Before you sign the agreement, make sure that both are respected, reputable and long term operators in the reverse loan industry.
5. Show Your Quotes To The Counselor.
Your initial information, with which you asked the quotes, was partly built as a results of the counselor meeting. Maybe you also received recommendations about the brokers. Now you can turn to the counselor and ask, whether these brokers are high classic companies and whether you are safe, if you will make an agreement with some of them.
Posted on April 23, 2012
Few people really understand the particulars of the finance industry, so a financial advisor is essential to get the best out of your investments. It may seem like you wouldn't need to have an independent financial advisor, but personal finance touches us all, no matter what our position.
Pensions are a prime example of how useful a financial advisor can be. Millions of people have pensions of some sort. Some contribute to employer-led schemes, and some will be claiming a public-sector pension in retirement, but a large number of us have a private pension, and understanding one of those can be a difficult job. Thankfully, an independent financial adviser can help guide you through your options to help you to stop worrying about retirement planning, and enjoy your life!
A financial advisor can let you enjoy retirement in comfort
It seems like pensions are constantly in the news for one reason or another. Either some pension scheme has announced that they can't afford to pay out what they thought they would, or the population is growing older and costing more. It's really essential, therefore, to ensure that you plan accordingly, to ensure that you pay in enough now to make sure that you are comfortable later. The problem, of course, is that pensions can be an absolute minefield. Unless you have an expert independent advisor on hand to guide you through, the results could be catastrophic.
Luckily, the pensions industry has developed significantly over the last few years, and there are now a number of new options that you could take advantage of. Naturally, it would be a terrible idea to make these decisions on your own, though, so a good advisor will discuss your expectations and requirements, then offer only products that will suit your needs. Equally, many people are now deciding to emigrate to another country. If that's you, special tax arrangements exist for any contributions you've already made in this country. Again, this is a highly specialised area that only a financial advisor can help with.
An independent financial advisor is just that - independent
So many people don't make enough provision for old-age, and it's a growing problem. An independent financial agent doesn't work for just one pension provider, so they can use their skills and knowledge of the whole market to provide you with a retirement plan that's perfect for you. You can't be expected to understand your pension options on your own, so get help from an independent adviser, and they'll help to ensure that your future can be as happy as your present.