Wouldn't life be better if it was easier to get ahead? For many, there's just too much month left over at the end of the pay cheque. After all, you've got a mortgage or rent and utilities to pay, food and clothes to buy, and a vehicle to operate.
The unfortunate truth about aging is that the human brain deteriorates as we age. While the process is vastly different depending on the individual and their health and circumstances, the rate of deterioration cannot be predicted with any level of certainty. It doesn’t cater to genetics, family history, or life habits.
With the lifetime contribution room of a TFSA now at $52,000 for most people, TFSAs are now a serious portfolio and investment planning alternative to making RRSP contributions. So which is better you ask? Well, it depends…
If you are a Canadian with significant assets and savings then maximizing your TFSA makes sense as a retirement income planning strategy. The income from it during your retirement years is non-taxable and will not trigger any Old Age Security clawback which starts at $74,780 in 2017.
Multiple media reports note that almost 50% of Canadians have no emergency savings and are unable to cover the cost of an unexpected expense of $500 - $1000, let alone deal with an unexpected job loss. Other reports from credit agencies such as Equifax state that even a 0.25% increase in mortgage rates will cause cash flow stress for some Canadians. The good news is that changing this "just-in-time" living IS possible!
Since its inception several decades ago, the Registered Retirement Savings Plan (RRSP) has become the most widely used retirement savings vehicle in Canada. In order to get the most from an RRSP, it is essential to plan ahead for future investments to avoid panicked deadline decisions or taking action without fully understanding the long-term impact.
In this article we examine a number of different RRSP savings strategies:
It is next to impossible to know when you might be impacted by a financial emergency; therefore, it is important to be prepared for something unforeseen in the future. Most people have heard the saying about saving money for a "rainy day". With the right forward planning, there is a great chance of being able to avoid a financial crisis should this present itself at a later date.
How much emergency funds are enough?