As baby boomers approach retirement while their children look for financial help, many are feeling the financial strain.
A new TD survey found 62 per cent of boomers can’t save enough for retirement because they’re supporting adult children or grandchildren. Those kids, however, aren’t taking that money obliviously: 44 per cent of millennials who rely on their parents’ or grandparents’ support said they know that help means fewer retirement savings, and 43 per cent said they’d cut costs rather than asking for financial help.
“As a parent or grandparent it’s natural to want to help our kids and grandkids who may be facing financial challenges such as finding full-time employment or paying their day-to-day expenses,” Rowena Chan, senior vice-president at TD Wealth Financial Planning, said in a news release. “It’s important that this desire to help is balanced with the goals you have when it comes to retirement.” Read more
The Registered Retirement Savings Plan (RRSP) contribution deadline is March 1, 2017. Here are some facts about RRSPs to help you make the most of this great opportunity to grow your retirement savings, better plan your personal taxes, and enjoy a comfortable retirement.
Make your maximum contribution
Your RRSP contributions provide a deduction from your taxable income, which for most, results in a tax refund when you file your personal tax return.
For 2017, you can contribute a maximum of 18% of your earned income in 2016, to a maximum of $25,370. Refer to your 2015 notice of assessment as you may have additional unused carry forward limit.
This number will be adjusted if you are a member of pension plans and/or profit sharing plans, depending on the value of your benefits in the previous year.
Making the maximum contribution at the beginning of each year will add additional compounding power to your RRSP. Read more
Many of us set New Year’s resolutions for ourselves and often those resolutions have to do with finances. January is the month we say, “Ok, this year I am going to save more and spend less”. This article won’t tell you how to spend less, but it will outline two government sponsored programs available to help you save for retirement or even just a rainy day! Of course these are not the only vehicles you can accumulate money with – those include anything from putting dollars under the mattress to the most sophisticated tax shelter schemes – but these two are the most popular.
Tax Free Savings Accounts (TFSA)
This is the new kid on the block established by the government as of January 1, 2009. Canadian residents age 18 or older could contribute up to $5,000 into a TFSA. The funds would grow tax free and although there is no tax deduction for the contribution, withdrawals can be made at any time without paying tax. Also, there is no earned income requirement for an individual to contribute. Read more
One of the most common investment questions Canadians ask themselves today is, “Which is better, TFSA or RRSP”?
Here’s the good news – it doesn’t have to be an either or choice. Why not do both? Below are the features of both plans to help you understand the differences.
Tax Free Savings Account (TFSA)
- Any Canadian resident age 18 or over may open a TFSA. Contribution is not based on earned income. There is no maximum age for contribution.