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QUESTION & ANSWER
5/23/2019 5:32:04 AM
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Opinions expressed in articles published on this site are solely those of the contributing authors and do not necessarily represent the views or opinions of The Fund Library, its staff or affiliates.

 

By Robyn K. Thompson | Monday, May 13, 2019



Around this time of the year, most taxpayers who filed a tax return in April will be receiving a Notice of Assessment, perhaps with a refund cheque, or what’s worse, a Notice of Reassessment, often with a demand for more tax payment. It’s important to deal with these issues, because each can have an impact on your tax planning for the year.

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By Robyn K. Thompson | Friday, May 03, 2019



Many people on the cusp of retirement are wondering whether they’ll outlive their retirement nest egg. Even those with hefty savings tucked away in Registered Retirement Savings Plans and Tax-Free Savings Accounts have expressed their concerns to me about becoming destitute in advanced old age and have thus decided to delay CPP and OAS payments while putting off RRSP maturity until the very last possible day of the year in which they turn 71. Is this really necessary? When should you turn on the retirement income taps, and how long will your money really last?

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By Robyn K. Thompson | Thursday, April 11, 2019



Are you taking all the tax deductions and tax credits you’re entitled to? Maybe not, because you may not know whether a particular deduction or credit applies to you. That’s not surprising, because there are nearly 100 personal tax deductions and credits available, and not all apply to everyone, or do so in only very limited circumstances. And many are often overlooked, even if they do apply. Here’s a rundown of the most commonly missed credits and deductions. Consult with your tax preparer to see if they apply to you.

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By Robyn K. Thompson | Monday, April 01, 2019



Tax-filing season is upon us, and at this time of the year I get many questions about the kinds of expenses that investors can deduct. Novice investors, especially, have a kind of starry-eyed idea about deducting everything from their subscription to an investment newsletter to the fee they paid to their tax preparer to interest on money borrowed to invest. Unfortunately, the Canada Revenue Agency (CRA) long ago twigged to this type of thing, and the list of the deductible investment expenses (called “carrying charges” if you want to get technical) has dwindled and become very circumscribed. Here’s a quick review what’s allowed and what’s not.

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By Robyn K. Thompson | Friday, March 22, 2019



In this era of robo-advisors and artificial intelligence, it’s easy to believe that the expert, professional flesh-and-blood financial advisor has gone the way of the horse and buggy. It’s even easier to believe if you buy into the aggressive marketing by online portfolio management services that implies a human financial advisor basically sits back, collects fees, and buys a new luxury car every year. Of course, this grossly misrepresents what real advisors (as opposed to algorithms) actually do for their clients. So here’s a quick refresher on what to expect from a “real” financial advisor.

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By Robyn K. Thompson | Thursday, March 14, 2019



March is fraud-prevention month in Canada, and unfortunately thousands of Canadians continue to fall victim to scams perpetrated online and by phone, often losing tens of thousands of dollars or in some cases, their entire life savings. Here’s a look at three of the most notorious financial frauds that are still widely active in Canada, and how to avoid becoming a victim.

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By Robyn K. Thompson | Thursday, March 07, 2019



As society transitions increasingly to cashless transactions, using smartphones and online channels to pay for goods and services, parents have a bigger challenge than ever in teaching children the basics of financial literacy. How do you impress upon younger children the principle of “value” – the idea that the things you buy don’t just magically appear because you can tap, click, or swipe a device. It may sound daunting, but there are some basic principles that never change. And the sooner you start teaching these to your kids, the sooner they’ll become financially literate.

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By Robyn K. Thompson | Friday, February 15, 2019



Valentine’s Day is that annual hearts-and-flowers fest that can be gushingly romantic, to say nothing of stressful. It’s also a time when many proposals of marriage are made – and accepted. Once that initial excitement subsides a bit, it’s time to get down to the brass tacks of planning the wedding. But it’s also a good idea to set aside some time to talk about your financial future together. Here are five tips I offer newly-engaged couples.

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By Robyn K. Thompson | Friday, February 08, 2019



This year, the Registered Retirement Savings Plan (RRSP) contribution deadline for getting a 2018 tax deduction is March 1. You still have time to discuss the best strategy with your financial advisor. Each year I’m asked how to get the most benefit from an RRSP. I’ve distilled my advice into six key rules.

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By Robyn K. Thompson | Friday, February 01, 2019



Divorce proceedings are often contentious, emotionally fraught, and never easy. That’s why when going through a divorce, it’s absolutely critical to keep a cool head about your finances and property. Unfortunately, it’s here that there tends to be the most dispute. But that needn’t be the case if you have all your records in order and can show what’s yours personally and what is legally jointly held property. There are three key principles to follow.

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By Gordon Pape | Friday, January 11, 2019

Q – I need to better understand the impact of interest increases for banks and utilities. Yesterday, I heard an analyst saying that the drop in Canadian bank shares was due to anticipated interest increases. Today, I just saw news saying that JPMorgan profits were helped by higher rates. I am confused. Also, please explain for me what sectors of economy are best positioned to profit of the forecasted interest increases and what sectors will be hurt the most. – Marcel B.

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By Gordon Pape | Friday, December 28, 2018

Q – In a recent tax tip article in the paper, it advised to withdraw funds from a TFSA in December and then add them back to the next year’s contribution limit. It didn’t explain why this would be beneficial. Is it? If so please explain. – Barry D., Duncan, BC

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By Robyn K. Thompson | Friday, December 14, 2018



Q – We’re seeing a lot about year-end investment and tax strategies at this time of the year. But so many of them seem to be only for the super rich or ultra-sophisticated. Do you have any year-end financial tips for the average investor? – Sunny L., Markham, Ontario

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By Robyn K. Thompson | Friday, December 07, 2018



Q – I’m 65, and I’ve accumulated a nest egg in the vicinity of $1 million, consisting of pension plans, a fairly large-size RRSP, TFSA contributions, some inheritances, and some money left over from downsizing my home to a condo. I’ve read that $1 million is what you need to retire on comfortably, but with possibly another 20 years or more ahead of me, I don’t see how it will last. Do you have any suggestions, particularly about the RRSP? – Rachel N., Thornhill, Ontario

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By Gordon Pape | Friday, November 30, 2018

Q – My financial advisor has me invested in a variety of Purpose funds. I do not think they are doing well, but my advisor claims they are paying me dividends. I don’t see how they are. Can you please advise if they are a good investment? – Ramona K., South Surrey, B.C.

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By Robyn K. Thompson | Friday, November 23, 2018



Q – My wife and I have turned 40, and we’re both well established in our careers. We have two kids in high school, we’ve managed to pay down our mortgage, and we’re now able to set some serious money aside for retirement savings. We’ve read that you need at least $1 million to retire comfortably. But at our age, can we really save a million dollars by the time we retire? And if so, how? – Tim R., Etobicoke, Ontario

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By Robyn K. Thompson | Friday, November 16, 2018



Q – The shopping excitement around “Black Friday” is definitely contagious, and I admit I’ve fallen victim to the hype in past years, both online and in retail stores, buying way more than I really intended. Can you explain how Black Friday came to be such a big thing, and how consumers might protect themselves against all the marketing razzle-dazzle? – Rose L., Markham, Ontario

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By Gordon Pape | Friday, November 09, 2018

Q – I’m in my mid-50s and interested in selling some of my RRSP mutual funds. I’ve had them for at least 10 years. So, I think I have had them long enough to not get charged a penalty fee for selling them within a couple of years. Do they get taxed the same rate as if I had capital gains from selling stocks in a company? I also have a TFSA question: If I put $5,000 in my TFSA and buy stock that doubles in price to $10,000 and then take out the $10,000 from the TFSA, can I put $10,000 back in without a penalty? Even though the original contribution was $5,000? – Randy W.

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By Robyn K. Thompson | Friday, November 02, 2018



Q – I recently left a company after about 10 years, where I had a pension plan that has grown substantially. The plan has been converted into something called a Locked-In Retirement Account (LIRA), and I am unable to withdraw funds from it, even to transfer to an RRSP. This came as a bit of a surprise to me. Can you explain some more about LIRAs and how they work? – Derek B., Oshawa, Ontario

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By Robyn K. Thompson | Friday, October 26, 2018



Q – The Bank of Canada raised its interest rate to 1.75% on Oct. 24. It said that CPI inflation dropped to 2.2% in September, but that its core measures remain around 2%. I’m not really sure what these various inflation measures mean. In any case, 2% inflation seems really low, and I’m wondering whether I really need to be concerned about it for my longer-term investment portfolio of around $200,000, which I’m expecting to return an average 5% annually. – Ryan L., Barrie, Ontario

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