Wednesday, January 27, 2010

Tax Free Savings Accounts (TFSA)

The Tax-Free Savings Account (TFSA) is a flexible, registered general-purpose savings vehicle that allows Canadians to earn tax-free investment income to more easily meet lifetime savings needs. The TFSA complements existing registered savings plans like the Registered Retirement Savings Plans (RRSP) and the Registered Education Savings Plans (RESP).

How the Tax-Free Savings Account Works
  • •Canadian residents age 18 or older can contribute up to $5,000 annually to a TFSA.
  • •Investment income earned in a TFSA is tax-free.
  • •Withdrawals from a TFSA are tax-free.
  • •Unused TFSA contribution room is carried forward and accumulates in future years.
  • •Full amount of withdrawals can be put back into the TFSA in future years.
  • •Choose from a wide range of investment options such as mutual funds, Guaranteed Investment Certificates (GICs/Term Deposits) and bonds.
  • •Contributions are not tax-deductible.
  • •Neither income earned within a TFSA nor withdrawals from it affect eligibility for federal income-tested benefits and credits, such as Old Age Security, the Guaranteed Income Supplement, and the Canada Child Tax Benefit.
  • •Funds can be given to a spouse or common-law partner for them to invest in their TFSA.
  • •TFSA assets can generally be transferred to a spouse or common-law partner upon death. 
    The TFSA has a lot of great benefits.   To get the most out of your TFSA, make sure you talk to an investment professional.  Jerry

    Monday, January 25, 2010

    Different Types of Investments

    Over the past decade people have been looking at new ways tog et more out of their investments, often looking for better returns.  Annual returns are very important, and will greatly impact your retirement planning, but they are not the only thing you should look at.  The following are some general descriptions and their advantages and disadvantages:

    Savings accounts
    Pros:  Very flexible, immediate access to cash, few penalties at withdrawal, low risk of losing investment
    Cons:  Lower rate of return

    Wednesday, January 20, 2010

    Has Your Spending Changed?

    Alberta and most of Canada had some pretty amazing economic years from 2001 through 2007.  With lots of jobs and low unemployment, there was a fair bit of money to go around.

    Quite a few people invested the extra money they were making, some put it into much larger houses, a few paid down debt, and others used it as a down payment to buy boats, quads, ski-doos, RVs and other somewhat expensive luxuries.  Whether those actions were right or wrong is not the point of this article.  My point (question) is this:  With the drop in the economy, possibly a reduced income for you and your family, has your spending changed?

    Tuesday, January 19, 2010

    Baby Boomers turn 65 in 2010

    Baby Boomers were born in the years after World War 2, typically classified as those born from 1945 to 1964.  What that means is that the oldest of the Baby Boomers are turning 65 years old in 2010, and 65 seems to be the magic retirement age.

    This means something different than it did back in the 1940s when retirement was really embraced.  Back then, it was quite likely that if you lived to 65, you would only live a couple of more years, therefore you usually only needed enough to live on for a few years after retirement.  That is not the case anymore.  If you retire at 65 today, there is al most a 50% chance that you will live to be 87 years old, meaning you need enough to support you for over 20 years.

    Monday, January 11, 2010

    Youtube Budget Contest Over This Friday

    Just letting everyone know that our Youtube Budget Contest deadline is this Friday.  If you are between 15-21 years old, check it out.  You could win $300 and other stuff (I think it's cool stuff).  We don't have a lot of entires yet, so with 1st, 2nd and 3rd prizes up for grabs you have a pretty good chance of winning something.

    Check out the contest page

    Thursday, January 7, 2010

    New Year + New Plan = New Life!

    With the holiday season over for another year, many of us likely have more debt than we’d prefer following the aftermath of utilizing credit cards, lines of credit, etc.  A great New Year’s Resolution is to not fall into this seasonal trap ever again.  Starting a budget plan now to cover yearly expenses including the ‘big hits’ (summer vacation/winter vacation and December shopping) would be a refreshing way to start off the New Year.

    And why stop there?  This could be the year to create or update your financial plan.  Budgeting, protecting assets, retirement planning and life insurance – it sounds like a daunting task to sort through.  With the assistance of a financial planner and a little homework on your part, it can get done.

    Decluttering and organizing the home has been a huge topic in magazine articles and home shows so why not apply this to your life as well?  Having a plan reduces stress and encourages a feeling of contentment knowing that your budget, retirement and loved ones are taken care of.
    Elaine, Personal Financial Counsellor

    Tuesday, January 5, 2010

    Important 2010 Finance Info

    With 2010 arriving, we are now under the 2010 tax levels.  The following are a few Federal tax numbers you may want to know about:

     - Basic Personal Income Exemption Amount of $10,382 (increase of $62)
     - Tax rate of 15% from $10,382 to $49,970 (increase of $244)
     - Tax rate of 22% from $49,970 to $81,941 (increase of $489)
     - Tax rate of 26% from $81,941 to $127,021 (increase of $757)
     - Tax rate of 29% on above $127,021

    Monday, January 4, 2010

    What's your goal for 2010?

    Do you have a financial goal and plan for this year? Do you have any goals for your finances in 2010?

    It’s important to have a goal and a plan on how to achieve it. If you don’t have a goal, it’s like a ship not having a destination. And if you do have a goal, but no plan on how to achieve it, that is like a ship that doesn’t have a crew. Either way, you end up going wherever the current and wind take you, and you have very little control over where you end up.