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21 Essential Tips you need for your RRSP Success… Part 2

21 Essential Tips you need for your RRSP Success… Part 2

Welcome to the 2013 RRSP Season.

Wise RRSP Tips and TricksIt is that time of year again when RRSP commercials dominate the airwaves, and in its celebration, we have created 21 Essential Tips you need to know for your RRSP Success.

Over the next 21 days we will be adding one tip per day to help you better understand RRSP’s and we Guarantee you will find at least one thing you didn't know before.

To get your daily dose of RRSP Tips, you need to follow Steffen deGraaf on Twitter, and daily you will learn one new aspect of this very popular Canadian Investment Vehicle.

Here are the first 3 tips, the most basic ones always start the series, so make sure you follow, to get the more in depth tips and tricks by the end of the series.

You will be glad you did…

 

RRSP Tip 1, 2 and 3 are here...

 

RRSP Tip 4.

RRSP with a GMWB Guarantee. Confused? Receive a 5% Bonus or the Market value in Saving Years, and Lifetime Income at Retirement.

RRSP Tip 5.

RRSP to RRIF. You can't just Save forever, at your max age of 71, you must convert your Savings program into an Income program.

RRSP Tip 6.

You can use a portion of your RRSP for the down payment on your home purchase, if you are a first time home buyer.

RRSP Tip 7.

Your Maximum contribution limit for 2012 Tax year is $22,970. But you may be eligible for more if you have carry forward room.

RRSP Tip 8:

The RRSP Deadline for the 2012 Tax year is Thursday February 28th. That is only 13 days away. Beat the Rush and Invest today...

RRSP Tip 9.

Start your RRSP as young as you can. Small contributions when you are young will compound beyond your greatest expectations...

RRSP Tip 10.

How to have $1 Million at Retirement? If your 25, save $400 per month, at 35 $600 per month, and at 45 you need $1500 per month

RRSP Tip 11.

Self directed RRSP's. You can also run your own RRSP account, with say, an eTrade account and get the benefit of low admin fees

RRSP Tip 12.

Tax treatment of RRSP Withdrawals. When you take money out of your RRSP it is viewed as Income by Revenue Canada, and taxed...

RRSP Tip 13.

Spousal RRSP's. When you open and contribute to an RRSP in your spouses name, you receive the Tax Deduction for the deposit!

RRSP Tip 14.

Make sure you have a primary beneficiary listed on your RRSP, usually your spouse, but don't forget about a contingent as well.

RRSP Tip 15.

Transfer your RRSP. You may only transfer your RRSP to your spouse or dependent child. All else must pay full tax on transfer.

RRSP Tip 16.

Did you know the unused balance of your child's RESP may be transferred to your own RRSP! Fingers crossed for a scholarship...

RRSP Tip 17.

RRSP with Guarantees.When you have your RRSP invested in Segregated Funds, you get a Maturity and Death Benefit Guarantee.

RRSP Tip 18.

Using Segregated Funds instead of MutualFunds in your RRSP you can lock in Investment growth to better protect your portfolio

RRSP Tip 19.

When you retire, you turn your RRSP into a RRIF, Savings Plan into an Income Fund. A minimum of 5-1/2% must be taken and taxed

RRSP Tip 20.

Fee or no-Fee? When you work with an Investment Advisor, ask what fees will be charged. An MER is the Management Expense Ratio.

RRSP Tip 21.

Today (March 1st) is the Last Day of RRSP contributions for 2012 Tax Year. Purchasing your RRSP today is like Xmas shopping on Dec. 24 🙂

 

Time to follow RRSP Success in 2012, the best investing tips

 

21 Essential Tips you need for your RRSP Success.

21 Essential Tips you need for your RRSP Success...

Welcome to the 2013 RRSP Season.

RRSP Success in 2012, 21 tips you need to be successful with your RRSPIt is that time of year again when RRSP commercials dominate the airwaves, and in its celebration, we have created 21 Essential Tips you need to know for your RRSP Success.

Over the next 21 days we will be adding one tip per day to help you better understand RRSP's and we Guarantee you will find at least one thing you didn't know before.

To get your daily dose of RRSP Tips, you need to follow Steffen deGraaf on Twitter, and daily you will learn one new aspect of this very popular Canadian Investment Vehicle.

Here are the first 3 tips, the most basic ones always start the series, so make sure you follow, to get the more in depth tips and tricks by the end of the series.

You will be glad you did...

RRSP Tip 1.

An RRSP or an RSP is a Registered Retirement Savings Plan. It has been a great way for Canadians to save in a Tax Friendly way.

RRSP Tip 2.

Who can contribute? Anyone over the age of 18, who has employment income for the tax year is eligible to invest in an RRSP.

RRSP Tip 3.

Carry forward in your RRSP. Even if you don't contribute the max to your RRSP this year, don't Fret, you can use it next year...

 

Time to follow RRSP Success in 2012, the best investing tips

Life Insurance rates are going up Again!

For those who have been thinking about Life Insurance to protect their Families or their Business, the time is now.

As of September 17th there will be another round of re-pricing of almost all Life Carriers products.

In the last year we have seen a dramatic change in the Life Insurance Landscape, and those who still offer Permanent Life Insurance, will be re-pricing shortly.

Of those Companies, Sun Life, Canada Life, Forresters Life and RBC Insurance will be increasing their cost of Permanent Insurance. It is not known as of yet how much the increases will be, but one thing is for certain, they will be going up.

Many Life Insurance companies, have discontinued Permanent Life Insurance altogether in response to two major changes in the Life Insurance Landscape.

1. Bond rates are at historic lows right now, with no end in sight. The Bank of Canada has stood pat on a 1% interest rate for almost two years now, which has put incredible pressure on Long Term obligations such as Life Insurance.

2. New accounting rules which have been implemented to prevent another Financial Crisis such as 2008 have also put incredible pressure on the pricing of Life Insurance. With the new rules in place, Insurance Companies now have to have far more cash on hand than they ever did before. This is a strange request to have of an Insurance Company, as most of their obligations are long term into the future, but all commitments must be based on today's Low Interest Rate environment.

These two factors alone leave the Insurance Companies with only two options, either stop providing Permanent Insurance altogether, or raise prices to generate more cash on hand for reserves.

So if you have been sitting on the fence, wondering when is a good time to talk about Life Insurance, the answer is Now!

Call our office and let us help you understand the best solutions for your particular situation...

- stef@dgfinancial.ca

 

3 ways to make sure the Tax Man gets as little as possible…

Life Insurance is Tax Free

It has been said that there are two certainties in the world “Death and Taxes”. This is true, but did you know that even after you die you still have to pay taxes!
Not a very comforting thought to most people, and who is going to argue with the tax man when you are no longer here to speak for yourself?

If planned properly though while you are alive, you can do many things to save on Income Taxes, maximize the value of estate, and leave more behind for your family or loved ones, as opposed to the Tax Man. You have paid all throughout your life, and if your affairs are not in order, you will more than likely pay too much when you pass away as well.

Here we will look at 3ways to minimize, and even eliminate some of the taxes your family and heirs will experience after you are gone.

1. Purchase Life Insurance…
Did you know that the proceeds of a life insurance policy are given to the beneficiaries completely tax free! There are few ways to receive a lump sum of money Tax Free here in Canada, and Life Insurance is one of them. By using Life Insurance to cover final needs and expenses, you can enjoy more of today’s dollars, knowing your beneficiaries will have adequate cash on hand from the Insurance proceeds. Insurance companies have also been introducing great products for people who are in their Senior Years to cover off this need. Whether you are in perfect health, or have had challenges with your health, there are a number of Guaranteed Issue Life Insurance policies now available, all the way up to age 80!

2. Give your RRIF away when you die…
Your RRIF is going to be one of the greatest tax obligations you will owe when you pass away. Throughout your life, when you were investing in an RRSP, Revenue Canada has been deferring your tax obligation. As most people notice in retirement, when they make a withdrawal from their RRIF, they have to start paying those taxes back. And when you die, all of the money that is left in your RRIF will first be taxed by Revenue Canada, and then the residual will go to your beneficiaries. But if you gift the balance of your RRIF to your favorite cause or charity, then the Tax Man gets nothing! Wouldn’t you be happier giving whatever you don’t use in your lifetime to the Church, Legion or Navy Club, the Salvation Army or your favorite charitable cause? You can even have split beneficiaries, so your family can get some, and also your favorite cause.

3. Invest in Segregated Funds…
Most people enjoy the value that Mutual Funds deliver, maybe a little less so over the past 4 years, but they have made a lot of sense for many investors over the long term. By investing in a “Fund” you can diversify your risk and share costs with many other investors. But have you ever investigated the differences between Mutual Funds and Segregated Funds? Both Investments function in the same form and fashion, but Segregated Funds are exempt from Probate, a 2-1/2% “Death Tax” here in Ontario (the highest in the country). Segregated funds also pass to your heirs or the charity as listed above within days, and not months such as Mutual Funds. This means that those, whom are left behind, have access to the money without having to wait months for the Probate process to be completed. And Segregated Funds have a death benefit guarantee too, which means that no matter how the markets are performing, you will always get at least your principle back in full, even if the markets are in a downward spin!

All three of these ideas take only a minimal amount of effort to implement on your part, but could save you thousands, and tens of thousands of dollars when arranged properly. It only takes a call to see how easy it is to achieve all the above benefits, so why wouldn’t you at least take the time to have a conversation. If you don’t take care of things today, there are more than enough people to take advantage of you when you are no longer here to speak for yourself. If you love your family or charity just a smidge more than the government, then give us a call today, and we will show you how easy it is to make the few small changes necessary to achieve all of this and more…

Call our office today for a complimentary review of Your particular situation. Whether you have Ten Thousand or a Million or anywhere in between, we can show you how to maximize the efficiency and effectiveness of your money.

Steffen deGraaf

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How to Easily Reduce your Debt and Maximize your Savings…

The debt treadmill is next to near impossible to get off unless you have a plan.

Most Canadians have heard the Bank of Canada continue to tell us how much debt we are in, and there is a debt crisis looming. But how can you get out of debt, without knowing what is necessary for you to do?

Bank of Canada lifts some forecasts, warns on debt; Reuters.ca

You can't really rely on the Banks to give you good advice to get out of debt, because they are generally the ones who put you there in the first place. Sure they like to talk about consolidation loans to get rid of debt, but isn't that just one more product they sell? Are you really getting out of debt by using a consolidation loan? The answer is no, not in the long term...

Once you clean up the debt in a nice clean consolidation loan, this free's up money for you to continue to spend, and generally you are rewarded with better credit, and you become more attractive for lenders to start advertising more products to you. Then you get back into debt and now you have a consolidation loan too!

So how do you get out of debt? The answer is simple, first stop spending more than you make, and then second put a debt reduction plan in place. Sounds simple, but most people don't know how to put a plan in place. This is where we can help.

We can help you by analyzing your debts, understanding how much the interest rate is on your individual debts, and how long you currently would have to pay based on your monthly contributions towards clearing your debt. Most people have never even thought about how long they would have to pay on their debt before it was actually cleared off. This is generally a scary number many, many years into the future.

Here is how it works, we need three pieces of information to help.

1. How much is the debt balance on each one of your debts, like mortgage, credit cards, line of credit and box store credit like Sears, Home Depot or FutureShop.

2. What is your Current Interest Rate on each one of those debts? It is likely that they all will have a different interest rate, so we need to know all of the rates.

3. What are you currently paying towards clearing that debt? If you only make the minimum monthly payments on your debt, then you will be surprised how long it will take to pay off the debt.

Once we have analyzed your outstanding debt together, we then use a debt repayment strategy called the "Debt-snoball Method". This is a different debt reduction strategy than what you have been told in the past, but it works far better than any other debt reduction strategy we have seen so far. It is not based upon the old adage of paying your highest interest rate debt first, and this is why it is unique.

The Debt-snoball method does not require you to pay any more for your debt than you do today, but when structured properly will allow you to get out of debt years sooner, and supercharge your retirement portfolio.

How would you like to get out of debt years sooner than you ever could? How would you like to be mortgage free 30% faster than simply making over payments, or bi-weekly payments on your mortgage? All these things can be achieved by using the Debt-snoball method.

Once we know your particular situation, we use a very special software program to put a Debt-snoball plan in place. Once your debts are entered into the system, we will give you a written plan on how to tackle the debt in a logical and sensible way. You will be amazed on how simple it is to achieve and you will be encouraged throughout the entire process, because you will see your debts fall off one by one, until the last thing you are making power payments on will be your mortgage. Imagine being debt free and retirement supercharging 30% faster than the traditional repayment method your lender propose to you. There are no tricks, only Math...

You need to call our office or send an email and give us your particulars, and we will then provide you with a free no-obligation illustration of how it can work for you, in your own particular situation. It is our business and it is our pleasure, take just a few moments of your time, and start the path towards debt freedom, without a consolidation loan...

Steffen deGraaf

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