Should you defer collecting CPP and OAS?

Can you afford to hold off and increase your payments later? Will you need more CPP and OAS later in life? And how long do you expect to live?

Should you defer collecting CPP and OAS?Most people know they can start collecting their Canada Pension Plan (CPP) at age 60, even though they’ll get smaller monthly payments than if they waited until 65. Many people just want the money now and don’t care about any added benefits to delaying CPP and Old Age Security (OAS). The standard CPP and OAS…

Looking backward to predict future investment performance

Be sure to read the fine print if you see a variable-rate investment such as an ETF or a mutual fund advertising what looks like a promised future return

Looking backward to predict future investment performanceLong-term investors need to be concerned about personal annualized return – the return on their money over the entire period of the investment. When investing in guaranteed investment certificates (GICs), your annualized return is known when you make your investment. For example, you buy a five-year GIC that pays three per cent so you know…

RRSP or TFSA? Sorting out an investor’s dilemma

TFSAs provide great options. If you build up the money in your TFSA while you’re working, you can draw from it tax-free any time

RRSP or TFSA? Sorting out an investor’s dilemmaK.M. wrote to ask if she should stop making registered retirement savings plan (RRSP) contributions and instead focus on her tax-free savings account (TFSA). With a little personal information from K.M., we decided it would be best for her to focus on her TFSA. Here’s why: K.M. works in a job she’s likely to leave…

Fed’s tax policies hurt families striving to join the middle class

A tax cut rewards families who work hard. Increased transfers make them more reliant on government

By Charles Lammam and Hugh MacIntyre The Fraser Institute Prime Minister Justin Trudeau’s government has repeatedly said it wants to help families “working hard to join the middle class.” But has the government lived up to this rhetoric on personal income taxes, a key policy area where it’s been particularly active? Over their two years in government,…

Do you need mortgage insurance?

It depends. As with all financial planning questions, no one answer fits every situation

Do you need mortgage insurance?“Did I need to take the insurance the bank sold me when I got my mortgage? Do I need mortgage insurance at all?” C.P. wrote and asked. I’m often asked this and the answer is usually the same: That depends. As with all financial planning questions, no one answer fits every situation. The simple answer in…

A tax turnaround that punishes the risk-takers

By targeting small business owners, the federal government is undermining the very essence of economic growth

A tax turnaround that punishes the risk-takersThe federal government has proposed significant changes to the Income Tax Act that would harm small business owners. We've seen this kind of tax turnabout before and it's both ugly and unfair. Some politicians and much of the media are describing these business owners as tax cheats, and have demonized them. The Canadian Taxpayers Federation…

Choosing and maintaining the right life insurance plan

Examining the three types of permanent insurance: term to 100, whole life and universal life plans

Choosing and maintaining the right life insurance planThere are many types of insurance and many ways to look at how it fits into your financial plan. In my last column I wrote about term insurance being the “if you die prematurely” option. In this column, I'm going to do a basic review of permanent life insurance plans. There are three types of…

Life insurance is more affordable than you think

Term insurance allows the most amount of coverage with the least amount of cost for a select period of time

Life insurance is more affordable than you thinkFrom a pure income replacement point of view, perhaps basic term life insurance should be called death insurance. It isn't because people do not like to think of their own mortality. Like all insurance, you pay a monthly or annual premium for life insurance. In exchange, the insurance company pays you – or in the case…

Layer your retirement income to minimize your tax bill

RRSPs aren't the only financial vehicle that help you manage your taxes over time

Layer your retirement income to minimize your tax billHaving multiple retirement income sources is a great idea. And that diversity, with proper planning, can reduce the income tax you pay. Most of us understand the basic retirement savings methods: a registered retirement savings plan (RRSP) or a spousal RRSP. We save a little bit of money when we can and reduce the income…

Should you be a Do-It-Yourself investor?

Your time is valuable, and many people don’t have the willingness or knowledge to tackle the task on their own

Should you be a Do-It-Yourself investor?I’m often asked if you should be a do-it-yourself investor or hire someone to give guidance. My answer is always the same: it depends. If you’re a DIY investor, how much time and effort are you willing to put into managing your money? There’s a cost to managing your money no matter how you do…

Home is where the heart is – and where the costs can pile up

When it comes to owning a home versus renting, you can’t just compare the amount of rent you would pay to the amount of a mortgage payment

Home is where the heart is – and where the costs can pile upShould I buy a home or rent? It’s a common question but the answer isn’t as simple you may think – it totally depends on your situation, since there are advantages and disadvantages to both. It’s usually better to own an asset that’s likely to go up in value than to rent an asset that’s…

Diversifying your portfolio in one neat package

An ETF is a low-cost mutual-like fund that trades on the stock market, with a significantly different fee structure

Diversifying your portfolio in one neat packageExchange-traded funds (ETFs) seem to be all the rage. There are more than 600 ETFs traded on the Toronto Stock Exchange and it seems like new ones are being created almost every day. An ETF is basically a diversified investment pool that’s very similar to a mutual fund, with the exception that they’re sold or…

Comparing investment returns is a tricky task

Each investor is unique in their goals and personal risk tolerance, so their investment portfolio should be customized to their situation

Comparing investment returns is a tricky taskYou worked hard for your money and, in turn, your money should be working hard for you. However, when comparing returns, you need to be sure you’re making a fair comparison. Investors often compare their returns to that of a published benchmark such as the Toronto Stock Exchange (TSX), or to the returns their friends…

Hidden or visible, you’re paying investment fees

Be smart, shop around and make sure you’re aware of the total fees you pay and what you're getting for them

Hidden or visible, you’re paying investment feesSome fees for investments are hidden, some are visible. But there’s always some type of fee or cost involved in investing. Some people will disagree with my broad use of the word fee, but I believe that any money paid out, regardless of how it’s paid, is a fee. Every business sets out to make…