Trust

NURSE

The hard thing about predicting is that involves the future. Things happen. Like the collapse of the Dippers and the ascendancy of the just-not-ready kid. And while I have no idea what will happen a week from today, the polls suggest there will be (a) a Lib minority, supported by the socialists or (b) a Con minority, which will soon be defeated by the barbarians. In the second scenario, it’s likely the G-G will allow the anti-Harperites to form a new government without another election – since we’re all tired of campaigning.

This is speculation, of course. The Conservatives may well retain most of their base and do better than it appears possible, with the ABC vote splitting in enough ridings to allow many blue seats with just over 30% of the vote. But there’s a mood in the nation. Change is palpable. The prime minister should have left after three terms.

My old friend Bill Casey gets it. I went to Nova Scotia a decade ago and campaigned for him as a Conservative. The former Ford dealer from Amherst won the seat, then (like me) countered Harper on a policy issue and was booted from the Conservative caucus for insubordination. He sat as an indie for a while (like me), then quit and now is trying to re-enter the House of Commons, this time as a Lib. But mostly he’s telling people in the riding that this election is all about one thing:

CASEY modified

Guess what that message is?

Well, this post actually has an economic, financial and tax raison d’être. It’s about your TFSA. Lots of people have posted here over the last few days that they went to the advance poll and cast their ballot in favour of the blue guys simply because of this issue. Other commenters ridiculed them, suggesting they sold their souls (and the country) out simply to gain a tax advantage and make their own futures more comfortable.

It’s ironic this conversation was going on two days ago while we were all debating the court decision allowing the company-formerly-know-as-Stelco to walk away from twenty thousand retirees, cutting their benefits now and their long-term pension payments next year, because it’s run out of funds. This is one of the new economic realities.

Over 70% of Canadians have no corporate pension plan. Defined-benefit plans, which guarantee a future payment, are rapidly disappearing. Many defined-contribution plans, essentially glorified group RRSPs full of crappy mutual funds, are woefully inadequate. And we have a swampy economy which strongly suggests there will be more Stelco-type heartaches down the road.

In this new world – markedly different from that which defined the workplace and retirement a generation ago – controlling one’s own destiny has never been more critical. It’s why I’ve consistently recommended  anyone given the option of commuting their pension – taking a lump sum payment rather than signing up for a monthly cheque from the administrator – grab it.

There are a number of benefits. Risks too, of course, but the advantages far outweigh. By controlling this money you can tailor the investments more to your needs, often securing better returns than the overly-conservative administrator. You also ensure 100% of the money is the property of your family, so if you croak too soon your spouse or kids get it all, instead of a small survivor payment that could run out in a few years. And while all of your pension cheque is taxable if you remain in the plan, when you commute it a portion can be taken as return-of-capital, which is not added to your taxable income, hopefully keeping you in a lower tax bracket. Finally, you prevent becoming a victim, like thousands of former Stelco workers.

Risks? Of course. You’re responsible for your own investment strategy, and could screw up. But so can the institutional pension plan – which is also subject to political and regulatory pressures you cannot control.

The choice is simple. You trust others, or you trust yourself. In the context of this election, that might translate into supporting a fat annual TFSA contribution limit which will accrue during your lifetime, or you vote for guys who say we need a stronger public pension plan instead. It’s sure not the only issue, but it touches the eleven million people who have already opened a TFSA. Over 90% have not maxed their plans, but they all have the ability to do so as they age, and to thus increase control over their own futures.

Also remember that whatever your corporate pension plan, income from a TFSA is taxless and non-reportable. In retirement it will not boost you into a new tax bracket (as will money from an RRSP), nor reduce CPP or OAS benefits.

In practical terms – as stated at the outset – there’s a fair chance the roll-back-the-TFSA guys will win. So, obviously, you and your spouse should ensure you have made the $20,000 contribution for 2015 and maxed out all previous years – even if you have to borrow the money to do so by the end of December (interest is not deductible). Then, see what happens next Tuesday morning. If the red-orange wave happens, it’s unlikely Parliament will resume before Christmas, or that there’ll be a budget prior to February.

So on Monday, January 4th, make sure you max the 2016 contribution limit. It will be messy and difficult for a new government to disallow a portion of TFSA contributions made in that calendar year, so it all might be shuffled off with an effective date of 2017. Or, existing contributions could be grandfathered.

Of course, it’s dumb we even need to consider this. The anti-Harper guys could have been just as effective without removing a key tool for achieving personal financial independence.

But maybe they don’t want you to be free. I better ask Bill about that.

238 comments ↓

#1 conan on 10.12.15 at 4:04 pm

Sound advice Garth. Only exception would be Fed Gov pensions, there is no reason to ever leave that IMHO.
For the rest of people get out if you can. I have rescued people from Nortel, universities etc etc etc.

The real no brainer is if you smoke, drink, generally don’t run marathons (unless walking to the kitchen counts) get your pension out.
It is that important.

#2 No Name wouldn't be proper on 10.12.15 at 4:07 pm

For what it’s worth, I believe there isn’t a more fair minded, sympathetic, erudite judge than Justice Wilton-Siegal. If there had of been a foundation in law,to hold former Stelco workers harmless, I believe he’d of found it. This just another case which proves domestic ownership matters.

#3 bcc7 on 10.12.15 at 4:07 pm

How easy is it for gov’t to start fully or partially tax income from an existing TFSA? it’s not a roll-back, but it’s not TF either.

#4 Mark on 10.12.15 at 4:09 pm

“Huh? Shut down the TFSA, I don’t see this happening.”

IIRC, the Liberals phased out the Family Allowance payouts, and revoked certain long-term capital gains exemptions in the 1990s. So if it is their stated policy to reign in the TFSA, I fully expect that they will go forth with such.

As I’ve argued in other posts, the primary outcome (although not the stated intention) of the TFSA has been to create a preference for fixed income investment (as opposed to equity) for the Canadian investing public. Which is largely funnelled into RE mortgage credit by the banks. In an economy where equity investment is desperately needed, particularly for industrial revitalization, a future government looking towards encouraging economic growth definitely would want to look at the TFSA as being quite negative.

Harperites will argue that the TFSA has some benefit to low income families who face income tests for social benefits. Which might be true in theory. But in practice, relatively few actually have been able to take advantage accordingly.

As far as practical investor strategies to avoid tax and to obviate the need for a TFSA, I’d suggest simply buying and holding equities for the long term. Over the long term, equities are amazingly tax efficient and deferral of capital gains, over time, creates some very low effective annualized tax rates. The TFSA is really only of significant benefit to those who desire to hold fixed income, but there’s a good argument to be made that most fixed income investments are dramatically overvalued.

#5 ron b on 10.12.15 at 4:13 pm

Great post, Garth.

I still can’t believe how many of my friends (age 30 plus) have no idea what a TFSA even is. I try to explain but no dice.

Maybe next year they will no longer have to worry about knowing. Sigh.

#6 Missing The Point on 10.12.15 at 4:19 pm

Garth – as you have gone on about for months (years?), the majority of Canadians are living paycheck to paycheck. They have nothing saved. Ergo, they do not have an extra $5K a year to place into a TFSA. Many of them don’t earn enough to fill the existing $5K/yr limit. How does increasing the limit help them? It doesn’t.

The point is, the majority of Canadians are against an increase to the TFSA, as such an increase only benefits the minority. It’s seen as a tax break for the 1%.

The RRSP is a far greater gift to the wealthy. Ditch that, too? — Garth

#7 Mark on 10.12.15 at 4:24 pm

“How easy is it for gov’t to start fully or partially tax income from an existing TFSA? it’s not a roll-back, but it’s not TF either.”

Very easy. They can simply pass a law to de-register TFSA’s altogether, or they can effectively de-register amounts greater than a certain threshold by forcing such TFSA holders to file a return (much as excess RRSP account holders must file a return and pay a highly punitive rate on excess contributions). If they set that threshold to roughly approximate the growth of funds over the past 5 years in fixed income, they will basically not be stepping on over 80% of the TFSA holders who only hold fixed income or bank deposits in their TFSA’s (as Garth often laments!).

There are a small number of TFSA holders who have hundreds of thousands, if not low-digit millions in them. Largely derived through either concentrated positions, or active trading strategies executed with a particular element of luck. I am sure a future TFSA-disliking government would be keen to have those individuals pay their share of taxes in the future instead of deriving a disproportionate benefit from the TFSA.

#8 crowdedelevatorfartz on 10.12.15 at 4:29 pm

Amherst, it’s “glory days” long gone.

But, its near Pugwash, Fox Harbour golf, Joggins, and the PEI bridge, so it still has a place in my aging black heart…….

#9 vatodeth on 10.12.15 at 4:33 pm

Harper sailed us into this mess. So is he really the one to guide us out? I do understand that 2008 wasn’t his fault, but his policies afterward are. He’s basically followed George W Bush’s template in my opinion.

I don’t agree with many of his policies, outside of the economy either though. I think that’s what he’s completely missing with voters. His recent gaffes include attacking Muslim dress and telling Canadians that marijuana is infinitely worse than tobacco.

We honestly need a real leader and none of these guys are it. I really don’t know which candidate will honestly be able to guide us best. The next 4 years are going to be messy no matter what. Can Canada run effectively and navigate a recession with a minority government though?

I’m prepared for whatever comes our way, because I have nothing holding me back. I have no house and no debt. I have a decent job in IT, which gives me flexibility to work in virtually every industry.

Let’s Roll the Dice!

#10 Don on 10.12.15 at 4:33 pm

The only plan I’ve heard out of either the LPC or NDP is to roll back the annual limit once more: $5500 or $5K. That limit was unreachable for many, many people as of 2014 while it was still in effect. I’m confident that neither party is interested in messing around with accrued limit, even as they roll back the cap going forward. So whether or not a family manages to use the extra $9/10K now or later, I fully expect it will still be available on Oct 20th.

Going forward, 2017’s limit will probably be $5K again. There might even be talk of a lifetime limit, probably much higher than anyone’s accumulated room so far. Would a quarter million in lifetime contributions be enough for most people? At $5K a year, accumulated from eighteen to sixty-eight? I bet most Canadians would tell you that’s plenty to expect to be able to invest tax-free, and more than they can manage anyway. Plus, those that can save more are still welcome to use their RRSPs, and enjoy tax advantages for capital gains and dividends produced by non-registered investments.

I think not only do fewer people than we might hope enjoy the benefit of the CPC increased limit to the TFSA, but the wealth accumulation opportunity differential among those few is less than we imagine under the different parties.

#11 Freedom First on 10.12.15 at 4:37 pm

Trust. My family and friends tell me they trust me with their life. Trust is only earned through actions over time.

I agree. There was no reason to cut back the TFSA. Further, the Libs and Dippers insulted my intelligence with their avoidance of many critical issues facing Canadians. They had a Golden opportunity to boot H from the PM Office, but they let Canadians down. I hope H wins. The Libs and the Dippers dodged the real issues and should lose. H gave them every opportunity, and they couldn’t/wouldn’t do it. H is smarter, hands down. He judged the Libs and the Dippers well, and they didn’t disappoint.

#12 Dup on 10.12.15 at 4:41 pm

TFSA is the best gift a government ever gave to their people. It is not a handout, but an oportunity for all to make money tax free. Just for that the Conservatives have my vote. Harper is just a figure head, and they all are the same at the and…

#13 Edward on 10.12.15 at 4:42 pm

“There’s never been a time when I’ve been less optimistic,” he said. “The general public doesn’t know how bad it is. It just hasn’t hit yet.”

http://www.nytimes.com/2015/10/13/business/international/oil-sands-boom-dries-up-in-alberta-taking-thousands-of-jobs-with-it.html?_r=0

#14 Hawk on 10.12.15 at 4:47 pm

The TFSA is important and wonderful, but there are some things in a civilized functioning democracy that are more important than financials.

I am a lifelong conservative whose values would be further to the right of most other conservatives, such as belief in a flat tax, minimal government etc. But sadly, it is the people diametrically opposed ordinarily to my values (NDP) who seem to stand for what is good and decent, in their firm opposition to Bill-C51 and C24.

There is no real decent “conservative” who would be against equality and civil liberties for all, it is essential to conservative values.

This election we should vote first for our basic defining human rights and core civilizational values, and set aside our pocket books.

This is why we should vote for Mr. Mulcair, or if not, then Mr. Trudeau.

#15 liberals or conservatives on 10.12.15 at 4:50 pm

There isn’t much of a choice.

The conservatives have good policies for working Canadians. Yet they have been in there for too long and in the face of recession the status quo of limited government intervention might not be the best thing for the country.

The liberals have similar policies except they have a plan to help the country deal with the recession. They will also tax the 1% to do it, and reduce taxes to the middle class. The downside is that they will reduce the TFSA limit. BUT in 4 years in a regular portfolio (earning about 5%), under the liberals we might only loose about 22.55k of TFS amount in the TFSA accounts. If the conservatives get elected again in 4 years, after people decide they want the extra 5k/yr, that’s only about 60k loss of room in the TFSA over 20yrs of investing (at 5% returns). Or about $250 less/month of income stream from the TFSA after 20yrs. IF you are in the middle income bracket you will most likely make that up in the tax savings. If you are in the upper bracket you will be paying more.

I disagree with the opinion that taxing the 1% will cause the 1% to leave the country. Especially considering about 1/3 of those are doctors and lawyers. I guarantee you, if they leave, there will be someone there to replace them and be more than willing to work for 200k/yr or more, and these people know it.

I also disagree that increasing the taxes on corporations is a good idea. They create and maintain lots of middle class jobs. This policy is very different from taxing the wealthy. For this reason I believe that NDP is really not a choice, and these policies alone are what makes this party so different from the conservatives or liberals.

#16 Time for change? on 10.12.15 at 4:59 pm

I recently retired from a political career, surviving 4 elections, and I can pretty much assure you that the incumbent never wants to see a big turn out at the polls come election time.

People aren’t voting someone into office; they’re voting Harper out.

People are driven to vote by negativity and fear. They come out in big numbers to protect their families from the perceived evil.

Complacency is the byproduct of relative satisfaction. Apparently there aren’t a lot of satisfied people out there.

#17 TurnerNation on 10.12.15 at 5:08 pm

Wow….a 2-party system in the pipe (just like USA)? Even less choice and more control. Who’d have guessed…

#18 Lee bow on 10.12.15 at 5:08 pm

I talk to pension plans all the time due to nature of biz. Substantially underfunded. Many, except for that one, if you know what I mean.

#19 Ralph Cramdown on 10.12.15 at 5:11 pm

The problem is with the difference between theory and practice.

Most mutual funds do worse than the market. The average invested dollar in mutual funds do even worse than that, because investors chase returns, buy high and sell low. ETFs help a bit in some ways, but we’re starting to see more and more high fee, active strategy ETFs.

Most investors are their own worst enemy, and those towers at King & Bay and in Manhattan were built on their backs. Pension funds usually provide low cost, competent management, diversification into asset classes classes difficult for retail investors to access, longevity insurance, and longer term strategies than older individuals can afford to take. Knowing all this, why champion individuals’ freedom to screw up, just so a few can be Captain Alpha?

I mean, look at some of the market outlooks and investing strategies that commenters on this blog talk about. That’s from a self-selected group of people presumably MORE interested and well-read on investing than the average citizen. A group you’ve said shouldn’t do their own brake jobs, but they should handle their own retirement funds? Oh, the humanity!

#20 BC Guy on 10.12.15 at 5:20 pm

Harper has worst jobs record since the Depression:

http://www.cbc.ca/news/politics/canada-election-2015-stephen-harper-jobs-analysis-1.3254371

Harper makes secret deal with US Steal (whoops, Steel):

http://www.cbc.ca/news/canada/hamilton/news/secret-u-s-steel-deal-with-ottawa-to-stay-sealed-1.3080491

And you’re gonna trust this guy on the TPP?

Despite all the corporate tax cuts, the stripping of union rights, the numerous trade deals, the .75 cent Canadian peso, Harper still has the worst job creation since the 1930s.

And there are fools who will vote Conservative because of the TFSA limit. Nevermind the robocall scandal, proroguing parliament, Bill C51, the world’s biggest housing bubble, the TPP, outsourcing jobs to 3rd world countries, replacing Canadian workers with Temporary Foreign Workers, cutting your Old Age Security payments for one or two years, just give me my $10K TFSA limit – that’s all I care about!

Harper has let down almost every segment of our society:
– students with massive student debt
– graduates who can’t find jobs in their field
– too many young people who can’t afford to buy a house
– too many middle-class people sitting on record amounts of personal debt due to record housing prices
– veterans denied benefits
– a whole future generation whose OAS payments at age 65 and age 66 were cancelled – that adds up to about $20k
– too many Canadians whose jobs were outsourced

But no, as long as I have my $10k TFSA, that’s all that matters.

Fools.

#21 Mark on 10.12.15 at 5:29 pm

“TFSA is the best gift a government ever gave to their people. It is not a handout, but an oportunity for all to make money tax free. Just for that the Conservatives have my vote. Harper is just a figure head, and they all are the same at the and…”

And what exactly was wrong with buy and holding equities over the long term, deferring capital gains in the process almost indefinitely?

This is what I don’t get about the relatively sophisticated people on the greaterfool blog supporting the TFSA. Most posters here are smart enough to be able to take advantage of tax lowering strategies (whether long-term buy and hold, leverage, preferred shares, etc.), yet still stubbornly cling to the idea that the elimination of the TFSA would be a significant setback in their personal finances.

The even larger irony is that as TFSA funds mostly are invested in fixed income obligations of the banks, and as the banks mostly invest in mortgage credit and the housing/consumer debt bubble — advocating for a continuation/expansion of the TFSA is also advocating for a set of conditions that might allow the housing bubble, at least the financing side of it, to be blown even larger. And I think most greaterfool participants are opposed to the housing bubble.

I know correlation isn’t causation, but if the TFSA were such a great thing for the economy and for investors, why haven’t they done so much better over the past 6 years with the TFSA, than without? Could it be that the TFSA (similar to lowering the capital gains tax in the late 1990s to placate tech bubble investors) is actually a cause and source of malinvestment, particularly in bank deposits and fixed income?

#22 Trust | Realties.ca on 10.12.15 at 5:32 pm

[…] Source: http://www.greaterfool.ca/2015/10/12/trust-6/ […]

#23 omg the original on 10.12.15 at 5:33 pm

Victoria Real Estate Update
I asked you a long time ago to find an example of a COUNTRY that had a housing bubble where the bubble deflated in a safe, controlled, soft landing manner. You have failed to provide an example. Why have you failed? It’s simple – there is no example to find.
————————

“Safe, controlled and soft” those are your words – since 2009 I have been posting that the correction will be SLOW AND GRINDING – not “safe, controlled and soft”.

Anyways in the past few months I have posted 6 times about the only major correction in Canada’s recent history – that of the Ontario market from 1990 to 2005.

It was a long slow grinding correction that brought down “REAL” values in Toronto by 40% from 1991 to 1999 and by almost 50% in southwest Ontario (London, Chatham, Windsor) from 1991 to 2005(ish).

No great calamity to the broader Canadian economy, no great US style housing/banking melt down – a lot of people actually slept through it.

And the bubble run up to this correction was mammoth – but even given the overinflated level of the markets the actual dollar correction (i.e. not inflation adjusted) was only 20-25%.

The corrections you refer to as the model for housing corrections are all circa the Great Financial Crisis, a sample size of ONE. It was nasty in the USA, Ireland, etc – but that is all due to on event the world finical crisis. (of not other very bubbly markets of the day – CDN and AU to name two hardly burped during the GFC and have not looked back since)

I CHALLENGE YOU to give me another example of a housing correction that caused economic armageddon for the host country other than one triggered by the GFC.

#24 pinstripe on 10.12.15 at 5:34 pm

harpo has done an excellent job in the campaign by throwing out red herrings to the opponents and avoiding the real issue facing Canadians, which is the amount of DEBT held by all levels of government and individuals.

the next PM will have no choice but address the MESS created by harpo by either raising tax, fees, levies or reducing services.

ABC

#25 Mark on 10.12.15 at 5:42 pm

“harpo has done an excellent job in the campaign by throwing out red herrings to the opponents and avoiding the real issue facing Canadians, which is the amount of DEBT held by all levels of government and individuals. “

One man’s debt is another man’s savings.

If one advocates destroying debt, then one is also advocating the destruction of savings. Economic policy should thus be with the view towards increasing the output of the economy such that debt is serviceable without default for those entities which choose to use debt rather than savings to finance their consumption and investment.

Harper and company have completely and utterly failed on bringing forth an economic agenda that encourages productivity. I can’t say the Liberal one is all that coherent, but at least they seem to be making an attempt. And, as usual, the Dippers want to take everything backwards.

#26 Bobs ur uncle on 10.12.15 at 5:43 pm

TFSA limit affects me directly but is a non issue when it comes to getting this Harper out of office. He had a chance to govern in a fiscally conservative way without resorting to fear mongering. Or shutting out candidates from debates and the media DURING AN ELECTION!!! If that doesn’t show you his anti democratic bona fides, I dont know what would. Don’t blame Mulcair or Trudeau. Harper had all the cards – and he blew it.

#27 Popeye the Sailor Man on 10.12.15 at 5:52 pm

#1 conan on 10.12.15 at 4:04 pm
“Sound advice Garth. Only exception would be Fed Gov pensions, there is no reason to ever leave that IMHO.”

Sorry Conan,

Garth is correct in moving the funds to a financial institution even for the federal service.

I have myself just done so this June and the timing could not be any better. It must be done before age 50 (old rules). The amount that the pension fund calculates as a transfer value increases with years of service, average income and the very important “economic assumptions”. The transfer Value went up 20%+ the month after the interest rate drop in January. They have taken another drop since and I was told it was the same or more. (I transferred out before that drop). Now if the bank of Canada drops again after the election it should increase the amount even more.

The amount I got if left alone until I’m 55 (the year I could first collect anyway) I will have enough to be equal the “life time portion” of the pension. I will be short the “bridging” amount you get until CPP kicks in but the “several” $100K divided up by the Bridging amount would equal 46 years of payments. So I am way ahead. Also If I die my family will have all the money VS only half the pension payment, If we both pass the kids will get all moneys VS 1/5th until 18 then nothing.

You have to quit (break in service) to transfer the money out, but if you’re in demand at work (and not deadwood) they will hire you back. I’m now working the same (blue collar) job again (term), until I want to quit again (anytime).

I highly recommend any federal worker in there mid to late 40’s with 20+ years to call the Pension Center at 1800-561-7930 and provide your PRI# and find out what your transfer value is right now discuss this with your spouse and financial adviser.

Good luck all

#28 omg the original on 10.12.15 at 6:05 pm

THERE ARE TWO TYPES OF HOUSING CORRECTIONS

People have come to think that housing bubbles implode like a Super Nova similar to the disaster that was the US housing market from 2007 to 2011.

The massive nature of that meltdown brought the world credit markets to the brink.

But that type of sudden and severe housing correction is not the only way house prices correct.

A very typical deflation of a housing bubble is a slow and grinding correction over several years – sometimes longer than a decade. And most of the correction comes in the way of house values simply not keeping up with inflation.

Take the most recent correction in Canada which occurred in Ontario in the 1990s – Toronto and area RE dropped 20-25% in the early 1990s in nominal terms but continued to drop in inflation adjusted terms until the late 1990s.

Same thing holds true for several large US cities during the same time frame – LA, for example lost 30% of the inflation adjusted value of houses in the period of 1990 to 1999.

If you look at the Case Shiller index you will see several long periods were US prices just did a slow grind down – particularly the early 1950s to late 1960s, and mid 1970s to early 1980s.

Now nasty corrections do happen – take Vancouver in the early 1980s. Prices had in Vancouver had a huge run up from the last 1970s to early 1980 – some areas 250%+.

But central banks efforts to tame inflation raised mortgage rates to the high teen levels (anyone remember when a 16% mortgage was a deal?). In just a couple of years the Vancouver housing prices were almost halved.

My guess is in Canada we will see the slow grind down in prices over the next decade. There are just too many factors working to support inflated prices over the near the mid-term. The only wild card would be a quick and significant increase in interest rates – and I am not talking +2% rise over the next 3 years.

#29 parksville senior on 10.12.15 at 6:05 pm

To quote the Conservative ad with Stephen Harper speaking “its not about me”.

Maybe it isn’t, but it is about honor and honesty.

And a govt with the track record of senate appointments, Prime Ministerial advisors and members in legal difficulty that your govt has hanging around its neck.

Not a single reason to vote Harper.

His economic record makes him a legend in his own mind (and maybe Garth’s) but to any reasonable thinking soul he has been an abject failure.

Four more of the same—-I think not!

Yes, it is all about you and your hacks, Mr Harper.

#30 Senta on 10.12.15 at 6:15 pm

Good advise, Garth. I thought long and hard about TFSA etc. but still decided to vote for the kid. I could not bring myself to vote for a almost-fascist and dippers pissed me off with the Niquab thing even though its silly. Hey, I myself am a immigrant but I think people need to make an effort to integrate if they move countries and not go around town looking like its Haloween.

#31 Smartalox on 10.12.15 at 6:15 pm

The thing about the Liberals and NDP promising to roll back TFSA limits to their previous levels, neglects the fact that politicians usually end up BREAKING most of the campaign promises once they get elected.

Often, not out of malice, but because once they realize ‘how things work’ keeping those promises becomes impractical.

I plan on lobbying hard to keep the TFSA limit at 10k or higher, regardless of who leads the next government.

The upshot is that where the incumbents made a habit of ignoring the public will in favor of political dogma, the other guys might actually LISTEN to the will of the electorate after election day, and if the majority feel TFSAs are important, maybe we can provoke a change.

70% carries a lot of weight, and it’ll be a lot easier to change the Liberals’ or NDP’s mind on this one issue, than to try to change Stephen Harper’s mind about anything.

#32 Senta on 10.12.15 at 6:16 pm

Forgot to say that I availed myself of early voting. There was a line up and had to wait 45 minutes. Lots of people have made up their mind. Change is definitely here.

#33 JSS on 10.12.15 at 6:18 pm

I joined the public sector (provincial) around seven years ago, because of the defined pension plan. Now I’m wondering if I should leave at 55 with the commuted value and get a financial planner to handle it. There are pros and cons on both sides. I’ve got ten years until 55. Once I’m past 55 I don’t think I can pull the money out of the pension plan.

#34 Mark on 10.12.15 at 6:19 pm

“I CHALLENGE YOU to give me another example of a housing correction that caused economic armageddon for the host country other than one triggered by the GFC.”

Good points. Housing corrections/collapses are actually healthy in many instances as they liberate capital from being mal-invested in excess housing and direct such towards other industries legitimately in need of capital.

For instance, in Canada, we constantly talk on this blog of how RE is priced at roughly 3X that of the publicly traded (TSX) stock market if compared on an ‘earnings’ basis. A redistribution of wealth towards higher-returning asset classes should improve economic growth, even if a housing collapse is part of it.

This is why portfolio balance, as advocated by Garth et al, is so important. To be able to seize upon such opportunity. A housing collapse doesn’t destroy wealth, but it merely redistributes it elsewhere.

#35 Steve French on 10.12.15 at 6:22 pm

The Rapture Ready Index is sitting at 183.

Folks. That’s only 5 points off its all time high of 188 in February 2013.

There’s been a decline in Satanism. But UFO Sightings are up.

Note that if the Rapture Index is above 160, you should “Fasten your seat belts”

We are well into the danger zone!

Consider thyself warned.

#36 Steve French on 10.12.15 at 6:22 pm

http://www.raptureready.com/rap2.html

#37 Steerage bilge on 10.12.15 at 6:26 pm

TFSA’s are fantastic especially in a more mobile workplace. Real shame if they get scaled back, and/or capped. If if I was still in my twenties I would have been all over them. They are gift to the young. They aren’t for the rich at all. They are a terrific help to the middle class. If folks can’t max it out it ain’t the end. A small inheritance or windfall bonus down the line and you make slump sum.

But man o man harpos gotta go.

#38 Linda on 10.12.15 at 6:27 pm

Advocation of grabbing the commuted value of the pension plan – in hindsight, I rather wish I had done exactly that, despite the fact both my financial advisor (not a bank) had argued otherwise. Unfortunately the rules governing my plan state one must take the commuted value prior to turning age 55. If you don’t, the ability to take the commuted value evaporates. I didn’t, so can’t do it now. But given the pressures & the highly likely probability that the plan will be under pressure to reduce benefits (at best) in future, I now wish I had had the foresight to grab the money & run.

Now, I do know of some employees who did just that – one to become an entrepreneur & open a coffee shop – who then unfortunately lost the lottery & is now back to their former employer, with a DB plan gutted. Yes, that person can begin contributions to our plan yet again – in fact, has no choice regarding doing just that – we can’t ‘opt out’ but MUST pay into the plan – but given the age of the individual, even working to age 70 would not permit them to ever fully fund their contributions. Plus I’ve no idea if previous years of contributions count or not, but if they do then the individual in question is stuck paying into a plan that will never give a large return because they simply haven’t enough years left to replenish the well. And buy back at this point in their career would be ruinous – far better to maximize any TFSA or RRSP contributions instead. Problem with the RRSP is, the DB plan contributions ensure the RRSP contributions are minimal. Fortunately at this point in time the fact one might have a pension plan of any sort does not change the amount one is permitted to contribute to a TFSA.

As for the election & the TFSA issue, given how few people can or have maximized their limits I don’t see it as a deal breaker. Also, it appears the people who have maximized their contributions are most of them close to retirement in any case – & as Garth has repeatedly pointed out, time IS money – people aged 55+ simply won’t have the amount of time a 20+ aged person will have to build their assets up, TFSA included.

#39 For those about to flop... on 10.12.15 at 6:32 pm

Mark ,we both know anything is possible but with Canadians in record debt and the goverment pouring fuel on the house bubble fire as much chance as they can get surely we need some other investment encouragement.
With all three parties aiming to keep this thing going how about allowing the other 30% of non home owners another avenue to get a leg up in life.
Sure this Ponzi scheme needs new money but I think it will be the savers who start the next phase of growth after this thing pops.
One eye on today ,one eye on tomorrow is all I’m saying.

#40 Bottoms_Up on 10.12.15 at 6:33 pm

If the TFSA is such a great tool with little consequence, why cap the amount that is allowed to be put in?

#41 For those about to flop... on 10.12.15 at 6:34 pm

#192 Bottoms_Up on 10.12.15 at 3:29 pm
#165 For those about to flop… on 10.12.15 at 11:44 am
————————
Anyone that lumps timmies with SBUX clearly knows nothing about coffee quality. Like lumping kia and acura.

———————————–
Huh? Too many peach snapps this holiday ?

#42 Brian Ripley on 10.12.15 at 6:36 pm

There have been some media headlines about too many housing starts (over building) in Canada recently, but according to my long term (1956-2015) housing start chart…

http://www.chpc.biz/housing-starts.html

…since about the mid-1970’s housing starts in Canada have been dropping (lower highs and lower lows) relative to steady population growth which I plot over the housing starts data.

More supply should bring down prices in the hot markets and provide more rental stock provided land can be serviced and delivered to developers. Low rates appear to be with us for awhile and that helps keep development costs low.

Too bad those same low rates have driven a mania to flip property instead of develop property.

#43 Mark on 10.12.15 at 6:42 pm

” There are just too many factors working to support inflated prices over the near the mid-term.”

Like? If anything, we have conditions that support a collapse in Canadian prices even more rapidly than in the US.

Why?

1) $900B of our mortgage credit market is guaranteed by government, compared to ~$5T (so $500B equivalent using traditional 1:10 ratio) in the USA through Fannie/Freddie. The financing market is highly vulnerable to the withdrawal, diminishment, or loss of confidence in such guarantees.

2) 40% of Canadian loans reset overnight and nearly 100% reset in 5 years or less. Compare to the US where a significant chunk of loans are fully amortizing with no balloon payments.

3) US housing participation rates weren’t even as high as Canadian ones (>70% now). So there is incredibly little “pent-up demand”.

4) Canadian consumer indebtedness ratios are worse than the USA’s at peak. Canada’s devotion of GDP to the housing supply sector is greater than the USA’s at the peak. Canada’s economy appears to be less diversified than the US economy and significantly reliant on mineral/oil and gas production.

So what exactly supports Canada’s RE sector greater than seen in those other countries which experienced rapid collapses?

#44 dosouth on 10.12.15 at 6:47 pm

I think you are right this time Garth. Harper has not done a great job over the last er…let’s say…9 years and what is left to choose from are a fractured group of politicians vying for the top job so they can push their own private and corporate agendas (after the election).

Bashing Harper continually will certainly fracture the vote and yep, some blue will get in with 30% or even less if there are more than 2 viable candidates in the riding…..and then where will the bashers be?

So who to vote for….just still dunno?

#45 Burnaby Boy on 10.12.15 at 6:52 pm

33JSS I joined the public sector (provincial) around seven years ago, because of the defined pension plan. …….Once I’m past 55 I don’t think I can pull the money out of the pension plan.

After one year the public sector pension plan is vested.

#46 common sense on 10.12.15 at 6:53 pm

TFSA’s…

In a perfect world, a nice benefit provided by the gov’t to f help people with the means and discipline to invest after tax dollars to take a little burden off the future gov’t to ensure a better standard of living for it’s citizens…

In today’s world of low wage growth, excessive debt, job instability, a shrinking middle class, irresponsibility and a basic lack of financial understanding…a target for the gov’t and those irresponsible or ignorant of financial matters to target those who likely paid their dues by sacrificing the now to ensure a more secure future.

My take? One day if it still exists after this election will be used against the TFSA holder as part of a NET WORTH clawback assessment where RRSP holdings, TFSA holdings, PROPERTY holdings, perhaps BANK savings holdings will be used to determine just what your entitled to in OAS and possibly CPP…

#47 just vote on 10.12.15 at 6:55 pm

This is for people that don’t vote… Stop complaining!!! Harper is not a dictator, Mulclair is not a commie, Trudeau is not like his father, each is a decent choice compared to what I had back in my eastern European country 20 years ago elections.
If you have 5000 sitting around and losing 30% on highest tax bracket … good for you! If not learn, get a better job , manage your money better, etch
Tfsa is not the deciding point… maybe misallocation of capital in housing should be in this election…

#48 Show Me The Money on 10.12.15 at 7:00 pm

Garth I would like to borrow money to top up my wife’s tfsa, the problem I have is she’s a dual citizenship with the USA, she hasn’t lived there in many years but I hear they can still come after you for taxes. Any advice?

#49 Nagraj on 10.12.15 at 7:03 pm

HEARTACHE ?
HEARTACHE ??
HEARTACHE ???

” . . . there will be more Stelco-type heartaches down the road.”

When they can’t git their teeth fixed it’s TOOTH ACHE. And not chewin’ properly gits yas STOMACH ACHE. And squintin’ cuz yas can’t pay for prescription glasses gits yas HEAD ACHE. And alla that (and more) gits yas REAL MAD.

How about: There will be more Stelco-type FURY down the road.

In Les Miserables is it (or some other 19th century French novel) this gussied-up sweet young thing on a charity mission comes waltzing into this hovel with her brightly beribboned basket of delectable goodies.
There’s only an old geezer (a old Stelco guy) in the room, he wordlessly wraps his big hands around her dainty neck and squeezes and squeezes.
Next thing you know she’s on the floor, dead, her face blue with her pretty French 19th century bourgeois eyes buggin’ out. Yes sir.
(She sure won’t be feelin’ his pain no more, eh.)

Hope US Steel Canada’s exec suite don’ all die of HEARTACHE all at once.

*****************

Captain Alpha to #19 RALPH CRAMDOWN: How ya doin’?

*****************

Mr. Harper to Mrs. Harper at breakfast: “Laureeny honey, I had the weirdest dream last night. I dreamed I was on this hill, screaming “A horse! A horse! My kingdom for a horse!”

[Anyone NOT familiar with Olivier’s 1955 Richard III final death-throes scene? ] [I hope I don’t miss Harper’s concession twitchiloquy.]

***************************

P.S. for NORA L.

Yep, I spelled wisteria wrong.

I don’ know nuthin bout birthin babies, Miss Scarlett.

#50 Popeye the Sailor Man on 10.12.15 at 7:04 pm

TFSA and income splitting is very important to this Gen “X”er who is raising a single income family.

But I would like to see a minority liberal government, with the Cons as opposition. NDP getting enough seats to have a voice and the Greens getting at least 1-3 seats.

The liberals have been in the wilderness for a while so a Minority for the first term then if they do ok let them try a Majority government.

If we end up with a Con. minority I could live with that as long as it provokes a leadership change before the next election.

If the Liberal or NDP win this go around I will be sending in a letter stating my vote does not support the mandate to roll back the TFSA or income splitting.

#51 Mike T. on 10.12.15 at 7:11 pm

Trusting politicians?
Do people do that?

Figure out what it reallt means to be human and the non sense ends.
Your life will take on a whole new meaning.

Here is a start. Humans are rapport based, leave competition and rivalry behind. See what happens…

#52 Mark on 10.12.15 at 7:14 pm

“Garth I would like to borrow money to top up my wife’s tfsa, the problem I have is she’s a dual citizenship with the USA, she hasn’t lived there in many years but I hear they can still come after you for taxes. Any advice?”

There’s no tax treaty covering the TFSA between Canada and the USA. So in the eyes of the IRS, it is basically an offshore trust that must be dealt with accordingly according to US tax law.

In theory, she’s had an obligation to declare and pay tax upon all of her income from the time of gaining US citizenship (ie: Birth) until present. Her situation likely isn’t specific to the tax treatment of the TFSA by the IRS, but is rather more generalized to her overall status with the IRS for the entirety of her income sources.

As far as borrowing money to top up a TFSA, I personally don’t see the point. You can’t deduct the interest expense and you’re betting on a certain taxation outcome which may or may not materialize. Borrowing to invest in a long-term buy and hold equity portfolio position likely has a known better long-term tax outcome than non-deductible borrowing to fund a TFSA.

#53 For those about to flop... on 10.12.15 at 7:21 pm

#46 common sense on 10.12.15 at 6:53 pm
TFSA’s…

In a perfect world, a nice benefit provided by the gov’t to f help people with the means and discipline to invest after tax dollars to take a little burden off the future gov’t to ensure a better standard of living for it’s citizens…

In today’s world of low wage growth, excessive debt, job instability, a shrinking middle class, irresponsibility and a basic lack of financial understanding…a target for the gov’t and those irresponsible or ignorant of financial matters to target those who likely paid their dues by sacrificing the now to ensure a more secure future.

My take? One day if it still exists after this election will be used against the TFSA holder as part of a NET WORTH clawback assessment where RRSP holdings, TFSA holdings, PROPERTY holdings, perhaps BANK savings holdings will be used to determine just what your entitled to in OAS and possibly CPP…

————————————
I have been yammering on trying to say something to this extent but I don’t have your vocabulary .
You said it more eloquently than myself ,thanks

#54 Daisy Mae on 10.12.15 at 7:24 pm

“It’s why I’ve consistently recommended anyone given the option of commuting their pension – taking a lump sum payment rather than signing up for a monthly cheque from the administrator – grab it.”

*********************

Wow! Absolutely! Control your own destiny. There’s “nothing for sure but death and taxes” so look out for yourself!

#55 Mark on 10.12.15 at 7:26 pm

“…since about the mid-1970’s housing starts in Canada have been dropping (lower highs and lower lows) relative to steady population growth which I plot over the housing starts data. “

It could be argued that there’s been a shift in both demography (ie: family size in particular) as well as the durability/longevity of housing which has driven such trend.

If population growth goes to zero, then, over time, we would expect very few housing starts, except for the replacement of housing units which have been completely depleted/depreciated. Overall residential housing investment, which includes renovations/refurbishments, adjusted for inflationary/deflationary changes, may provide a better picture of whether residential housing investment is lagging or leading growth in the broader economy.

“With all three parties aiming to keep this thing going how about allowing the other 30% of non home owners another avenue to get a leg up in life.”

A good chunk of those “30% of non home owners” will never statistically be homeowners, shouldn’t be homeowners (ie: students who are in need of labour mobility), or just otherwise aren’t cut out for home ownership.

Given how overvalued housing is at the moment relative to other investments in the economy, it could be argued that wise people are eschewing home ownership in favour of other forms of capital allocation with much higher implied returns. I don’t see why any government would purport to ‘help’ these people by pushing home ownership onto them at elevated prices.

For example, I don’t own my home. But I have a stock portfolio large enough to buy several average ones. A government that attempts to rig the incentives to get me into home ownership at such elevated prices is depriving the economy of my investment in businesses that are likely far more worthy of investment than residential real estate.

Mark. Down, boy. — Garth

#56 Marco Polo on 10.12.15 at 7:35 pm

Yup,

Garth, i’ll make sure to top up my TFSA if we get a orange-red european left wing coalition. This is like topping up your gas tank before getting hit by a cement truck. Lower employment, lower investment, more funding for special interests, with an NDP or Liberal win, we’ll be in the same state as the UK in the 1970’s. Anemic growth, and no Maggie Thatcher in sight.

#57 For those about to flop... on 10.12.15 at 7:35 pm

Mark. Down, boy. — Garth

Haha ,I knew I shouldn’t have been encouraging dialog but he is all over this like shit on a blanket!

#58 Victor V on 10.12.15 at 7:35 pm

Bank of Canada Gov. Stephen Poloz speaks before the National Association for Business Economics at the Grand Hyatt Washington, Monday, Oct. 12, 2015, in Washington

http://business.financialpost.com/news/economy/bank-of-canada-studying-relationship-between-financial-stability-monetary-policy

#59 Rexx Rock on 10.12.15 at 7:36 pm

Real estate in Toronto and Vancouver will continue to do well until all foriegn money is dried up.Be happy most homeowners in the these two cities will be millionaires when they retire.Interst rates will go lower so whatever you do don’t lock in a 5 or 10 year term.

#60 Adam on 10.12.15 at 7:41 pm

Why all the talk of the TFSA doubling staying in if we end up with a conservative minority? Both the Libs and Dippers have said they would reverse it (or simply, not allow the proposed legislation to pass) so shouldn’t we be looking at the TFSA getting rolled back as long as the conservatives don’t get a majority?

FYI Garth – comment, number 6 – just because the RRSP is a greater gift to the wealthy doesn’t mean we should get rid of it, it means that we shouldn’t be giving more gifts to the wealthy at a cost to all other taxpayers. What a crap argument that was.

#61 Smartalox on 10.12.15 at 7:45 pm

With 70% of the electorate in favour of keeping the 10k TFSA, whichever ABC party to re-neg on their commitment to roll the TFSA back to $5k could walk away with a majority.

Just sayin’

#62 TS on 10.12.15 at 7:49 pm

Garth,

A senior couple gets $550 a month OAS each as long as they make less than $140,000 as a couple.

They get to sell their primary residence with no capital gains

They get the dividend tax credit

They get income splitting

They get RRSPs and $5500 TFSAs when Justin Wins

They have free healthcare and most drugs when they turn 65.

There’s Guaranteed Income Supplement and Canadian Pension Plan.

Stop pretending like Seniors have it rough. I know your rich clients would love to have $11,000 TFSAs to avoid paying even more tax in retirement, but it’s gone on the 19th.

Live with it

Actually I did not claim seniors are shafted. TFSAs are universal and offer everyone a chance to invest after-tax income in a way that’s far less preferential to the wealthy than RRSPs. As I wrote, this helps people control their own destinies, leaving less influence for partisans like you. — Garth

#63 Daisy Mae on 10.12.15 at 7:55 pm

#7: “There are a small number of TFSA holders who have hundreds of thousands, if not low-digit millions in them. Largely derived through either concentrated positions, or active trading strategies executed with a particular element of luck….”

**********************

Yes. I’m sure. “Hundreds of thousands”. Millions may have TFSAs…but a tiny portion of the populace will ever be able to take full advantage. Thus, Harper has catered once again, to the 1%.

#64 Get ready for change on 10.12.15 at 7:59 pm

People who vote for higher taxes, deficit spending, lower retirement contributions and more bureaucracy are truly insane…… If you are voting Alberta style…to punish rather than progress….look at what the Dippers have already done in Alberta….remember what the Libs did to the country with Trudeau and his Charter of Tears and judicial dictatorship.

#65 Daisy Mae on 10.12.15 at 8:00 pm

9: “Harper sailed us into this mess. So is he really the one to guide us out? I do understand that 2008 wasn’t his fault, but his policies afterward are. He’s basically followed George W Bush’s template in my opinion.”

****************

Yes. Harper, the ‘economist’, can’t think for himself. However, at the same time he is so devious. What a horrible man….

#66 Bottoms_Up on 10.12.15 at 8:02 pm

For those voting conservative, i hope julian fantino’s treatment of and standing up poor veterans crosses your mind as you place that X.

#67 Joe on 10.12.15 at 8:03 pm

Anyone who is reasonably informed and cares about this country will not vote for Harper. His flagrant abuses of power, obsessive control, disregard for democracy, and incredibly poor economic record don’t bode well for him. His “ethics” minister is in jail, a third of the Senate appointees are under criminal investigation…I could go on…

#68 conan on 10.12.15 at 8:04 pm

Popeye the Sailor Man on 10.12.15 at 5:52 pm

No need to say sorry but I appreciate it. I learned a lesson here to day and that is to be a little bit more careful on how I phrase my snappy paragraphs.

Trying to write like Garth but my degree in Reddit is still in limbo.

#69 Joe on 10.12.15 at 8:05 pm

Anyone stupid enough to vote for a party for a meager $5K tax free benefit shouldn’t even quality for a drivers license

#70 Daisy Mae on 10.12.15 at 8:09 pm

#11: “I hope H wins.”

***************

The only reason he won a ‘majority’ the last time around was because of our ‘first past the post’ voting procedure. He has never been popular. He’s an arrogant dictator. The last election was 65% opposed, 35% for. Which means 2/3rds of the electorate did NOT vote for Harper…and yet, he wins a ‘majority’?

#71 John on 10.12.15 at 8:11 pm

” The anti-Harper guys could have been just as effective without removing a key tool for achieving personal financial independence.”

Harper has ruined a key too for achieving financial independence: he’s wrecked the economy. He’s pissed away the Liberal’s surplus, bet the farm on big oil at the expense of manufacturing, given tax breaks and subsidies to big oil, which is now shedding jobs faster than ever, and cuts to R&D, which is one of the few ways of eventually generating high paying jobs. Of course with his grand plan to neuter CBC by selling off its assets, there will be no counterweight to corporate funded media, that is why so many people don’t have a clue to how badly he has governed this country.

#72 Joe on 10.12.15 at 8:13 pm

#2 No Name wouldn’t be proper

You can thank Lyin’ Brian Mulroney for getting rid of the Foreign Investment Review Act, which has resulted in massive foreign ownership, and Harper, who has accelerated selling off Canada’s assets.

#73 Daisy Mae on 10.12.15 at 8:14 pm

12: “Harper is just a figure head, and they all are the same…”

****************

Harper is a hateful dictator. He rules the roost. Period. End of story.

#74 Tripp on 10.12.15 at 8:16 pm

TFSA is not for the 1%. They have bigger, better(?) and more sophisticated ways to move and protect their money. The financially illiterate masses cheer for its reduction just because it is associated with the Conservatives, so it must be good for the “rich” and bad for everyone else.

Does anyone believe that someone with a quarter million or more yearly income wonder what to do with $5,500? It is likely they invest ten, twenty times more and couldn’t care less if a fraction of their return is taxed or not.

#75 For those about to flop... on 10.12.15 at 8:21 pm

#66 Daisy Mae on 10.12.15 at 8:14 pm
12: “Harper is just a figure head, and they all are the same…”

****************

Harper is a hateful dictator. He rules the roost. Period. End of story.
Yes. Harper, the ‘economist’, can’t think for himself. However, at the same time he is so devious. What a horrible man….
*

Yes. I’m sure. “Hundreds of thousands”. Millions may have TFSAs…but a tiny portion of the populace will ever be able to take full advantage. Thus, Harper has catered once again, to the 1%.

/////////////////////////////////////
So your saying that there is a chance you might vote Conservative ?

#76 GB on 10.12.15 at 8:30 pm

Right…I’ll make sure to run straight to the bank to invest that extra 20K I just can’t seem to spend on food…shelter…gas…insurance…childcare….heat….electricity….car payments….RESP’s….clothing…etc etc

Said practically NO ONE.

At least not 99% of Canadians anyway.

Don’t get me wrong…if you can do it then by all means please do. Good for you for sure.

This is not an election issue for me because as far as I’m concerned, if you can….you should.

But t’aint reality…no matter how much Garth believes it is.

TFSA room accumulates. When you are finished being young, bitter and unfocused, it will serve you well. — Garth

#77 Freedom First on 10.12.15 at 8:35 pm

#53 For those about to flop
#46 Common sense

Both of you are suffering from mental illness. Life must be painful. You should both get help. You are fabricating disaster scenarios that have not happened yet. Get help, and relax, then you will be able to invest in RRSP’s, TFSA’s, etc. in a liquid diversified portfolio without wasting your time worrying about the future. Look after yourself wisely, and everything will be okay. Trust me.

#78 pwn3d on 10.12.15 at 8:45 pm

#15 liberals or conservatives on 10.12.15 at 4:50 pm

“I disagree with the opinion that taxing the 1% will cause the 1% to leave the country. Especially considering about 1/3 of those are doctors and lawyers. I guarantee you, if they leave, there will be someone there to replace them and be more than willing to work for 200k/yr or more, and these people know it.”

————-
This is where the government relies on the ignorance of the 99% to pit them against the “rich”. The doctors won’t all leave, some may but let’s say none do. What they will do is take less income. They do this by incorporating, and taking some money as salary, lets say 150k. That way they can max their rrsp and not have to pay the extra tax that the ontario liberals passed. Then the rest they leave in the company and pay out as dividends as needed. They can pay dividends to their spouses, otherwise known as income splitting (hey i thought we banned that, right liberal sheep?) and then when their kids turn 18 guess who is also getting dividends since they probably won’t earn much until their mid 20’s. They will leave more money in their corporation which is bad for tax revenue and the economy, and then they will retire early or only work 2-3 days a week which is bad for patients, bad for tax revenue and bad for the economy.

And this is how JT is going to give a tax break to the 99%? You must be kidding. But the typical voter has no idea, and the media has no interest in educating them.

#79 common sense on 10.12.15 at 8:48 pm

Mental illness FF #76?

That’s pretty strong…

Just saying I do invest in everything..there has to be an exit strategy and trust me…I’d rather be safe than possibly sorry….

#80 For those about to flop... on 10.12.15 at 8:50 pm

#76 Freedom First on 10.12.15 at 8:35 pm
#53 For those about to flop
#46 Common sense

Both of you are suffering from mental illness. Life must be painful. You should both get help. You are fabricating disaster scenarios that have not happened yet. Get help, and relax, then you will be able to invest in RRSP’s, TFSA’s, etc. in a liquid diversified portfolio without wasting your time worrying about the future. Look after yourself wisely, and everything will be okay. Trust me.

——————————————————————-
Huh? Disaster?
I’ve got my TFSA maxed in a b and d portfolio.
Taken care of business ,no doomin and gloomin here.
I was just agreeing with some of his points .
Let citizens if they choose to look after themselves.
Your the last guy I look for advice from.Trust me.

#81 TS on 10.12.15 at 8:53 pm

#46

“My take? One day if it still exists after this election will be used against the TFSA holder as part of a NET WORTH clawback assessment where RRSP holdings, TFSA holdings, PROPERTY holdings, perhaps BANK savings holdings will be used to determine just what your entitled to in OAS and possibly CPP…”

As they should. OAS is senior welfare.

CPP is paid into by everybody. No way they ever try to claw it back.

#82 Freedom First on 10.12.15 at 8:53 pm

#69 Daisy Mae

You took one statement out of context from my well written Post? I pity the people in your life.

#83 pwn3d on 10.12.15 at 8:56 pm

Regarding commuting, the maximum commute value will seems really low. It would definitely be a deterrent for many with a government pension.

And a comment on advance voting. I went today. It was a total mess. The lineup wasn’t that big, but it would have been an hour wait. Why you ask? Because fing elections canada required a form to be filled out prior to voting. So each vote took 5 minutes or more. On election day a vote takes less than a minute. Not one media report I saw on the delays actually explained this. How lazy and pathetic media has become.

Anyways, I left once I realized what the delay was for. I can’t figure out why they added this form as I’ve advance voted before and not had to do this. Big fail. Makes me think the libs are getting a lot of advance votes because they are probably more likely to have free time to waste in line as the rest of us work for a living.

#84 pwn3d on 10.12.15 at 8:58 pm

#20 BC Guy on 10.12.15 at 5:20 pm

—–
speaking about fools, you do realize the TPP has to be ratified by the next government, which both the libs and cons would do because it would be good for the country.

#85 Nora Lenderby on 10.12.15 at 9:03 pm

#23 omg the original on 10.12.15 at 5:33 pm
I CHALLENGE YOU to give me another example of a housing correction that caused economic armageddon for the host country other than one triggered by the GFC.

Apart from Japan in 1990? And SE Asia in the late 90’s (although that was a generalized credit bubble, I think).

Anyway this is silly, isn’t it? I have no idea what exactly is going to happen which is why it’s so fascinating to watch.

We’re all ghouls, right?

#86 [email protected] on 10.12.15 at 9:05 pm

I advanced voted for my tfsa today. Choice was pretty simple funny how that works.

#87 gb on 10.12.15 at 9:07 pm

TFSA room accumulates. When you are finished being young, bitter and unfocused, it will serve you well. — Garth

Well I am not bitter…if you and I ever met you would find a very very proud father of two beautiful daughters with a wonderful wife, great family and plenty of friends to share a few wobbly pops with.

I chose to have a family and forgo wealth accumulation…that doesn’t make me bitter. That makes me an average Canadian.

I am also not unfocused. I read here don’t I? :)

I’m 45 years old…so I suppose you are telling me that in say….10 years….THEN I might happen to have 100K just laying around?

Maybe. I just don’t see it happening though.

#88 MC on 10.12.15 at 9:09 pm

does any of this matter? i hear statements like “i don’t know if i can handle another round of PC” or “we’re screwed if libs get in” etc. i’ll have the same job. i’ll pay the same tax. i’ll live in the same apartment. i’ll drive the same car. there’ll be the same number of potholes in the roads. there’ll be some scandal or another. etc. none of this means anything. it doesn’t matter who wins. not a single thing in my life will change. and other than government employees, pretty much no one else’s either. really, who gives a flying shit about it? what a complete waste of time. as if there’s gonna be any noticeable difference in your life.. there isn’t.

#89 common sense on 10.12.15 at 9:11 pm

TS #80

Very true…we pay into CPP and that is 99.9% sure of never being claw backed…

Change of age to start withdrawals? well….see OAS.

#90 common sense on 10.12.15 at 9:16 pm

And I have to ask Freedom First..

What is with the vengeance in your rebuttals?

Mental illness to 2 of us and Pity to another?

Lack of breast feeding as a youth? Take it easy fella…

We love you Freedom First and you may not realize it but their are other people in this world with a differing opinion of your world view. Show a little compassion for others opinions as we do for yours…geez…

#91 I'm stupid on 10.12.15 at 9:20 pm

Why can’t contributing members of a failed pension plan sue members of the same plan who got more out than they should have? A pension plan funded by employees that failed but the older employees got paid is a ponzy scheme and should be treated as such.

#92 common sense on 10.12.15 at 9:21 pm

and yes…Their should be there.

#93 Paul on 10.12.15 at 9:27 pm

#87 MC on 10.12.15 at 9:09 pm

does any of this matter? i hear statements like “i don’t know if i can handle another round of PC” or “we’re screwed if libs get in” etc. i’ll have the same job. i’ll pay the same tax. i’ll live in the same apartment. i’ll drive the same car. there’ll be the same number of potholes in the roads. there’ll be some scandal or another. etc. none of this means anything. it doesn’t matter who wins. not a single thing in my life will change. and other than government employees, pretty much no one else’s either. really, who gives a flying shit about it? what a complete waste of time. as if there’s gonna be any noticeable difference in your life.. there isn’t.
———————————————————-
Then why change, That’s what Justin and Tom are promising.
Change for Change sake no thanks.

#94 Nemesis on 10.12.15 at 9:31 pm

#It’sBetterInBC… #No,Really…

“There was one guy who had an oxygen mask on, he had a joint in his hand and his penis was very exposed,” Ms. Barnes recalled. “I said, ‘I’ll come back another time,’ and he said, ‘No, it’s all good. Let’s talk now.

[CBC] – Vancouver Centre candidates face naked tenants when canvassing

…Many tenants ask candidates how they got into the building. Under the Canada Elections Act, building managers must allow candidates into multiple-residence buildings to canvass between 9 a.m. and 9 p.m. during the writ period or risk a fine of up to $5,000, imprisonment for up to six months or both. Rare exceptions are allowed if residents’ physical or emotional well-being may be harmed as a result of this access; e.g. anyone diagnosed with Coulrophobia, Pupaphobia or Pogonophobia…

http://www.theglobeandmail.com/news/british-columbia/vancouver-centre-candidates-face-naked-tenants-when-canvassing/article26767922/

[NoteToGT: I may have exercised some editorial liberties…]

#95 Paul on 10.12.15 at 9:32 pm

#68 Joe on 10.12.15 at 8:05 pm

Anyone stupid enough to vote for a party for a meager $5K tax free benefit shouldn’t even quality for a drivers license
————————————————————-
Sounds like you don’t even know what a T.F.S.A is.

#96 Paul on 10.12.15 at 9:37 pm

#72 Daisy Mae on 10.12.15 at 8:14 pm

12: “Harper is just a figure head, and they all are the same…”

****************

Harper is a hateful dictator. He rules the roost. Period. End of story.
———————————————————-
Sorry, Daisy keep your pedals on a DICTATOR is not elected .

#97 Washed Up Lawyer on 10.12.15 at 9:38 pm

So, 7 days until the federal election here in Canada.

Keep your eyes on the ball.

49 days until the climate change conference in Paris.

Talk about a knuckleball ducking and diving.

Oversized catcher’s mitts are selling like hotcakes up here in Fort McMurray.

#98 Millennial Realist on 10.12.15 at 9:40 pm

Be careful, Garth – words have meaning. The seemingly quick and sloppy way you present some of your ideas underscores the underlying issues at play, that our current “leaders” have betrayed ordinary working people to favour the 1%.

“Over 90% have not maxed their plans, but they all have the ability to do so as they age, and to thus increase control over their own futures.”

“ability” ?

Are you serious?

More like “theoretical potential” is much closer to the truth. And that’s where it will remain for decades as the middle class continues to collapse in Canada. People simply don’t have the money to contribute, and that is only getting worse.

“Risks? Of course. You’re responsible for your own investment strategy, and could screw up. But so can the institutional pension plan – which is also subject to political and regulatory pressures you cannot control.”

Of course most of those pressures have been from companies that twist political arms so they don’t have to properly fund and manage pension plans, which should properly be a criminal offence. The better managed, large plans, like CPP, OMERS, Teachers etc… do very well. Most Canadians will be quite happy to trust those types of people managing similar plans, as proposed by some governments and candidates.

But trust other financial planners, or do-it-yourself? Not likely. Few will be lucky enough to find someone as capable and honest as Garth Turner to manage their money.

Most financial advisors are incompetent, and completely captured by MERs and a profound conflict of interest in basic dealings with their clients. The only thing most of us can trust about this sector is that we will be ripped off.

Is it any wonder so many turn to real estate for “investment”, when the overwhelming majority of the financial services sector is so dishonest and unreliable?

That won’t change with bigger TFSAs. Only with bigger, broader and well-regulated pension plans.

There won’t be any need to commute those.

“The anti-Harper guys could have been just as effective without removing a key tool for achieving personal financial independence.”

You seem to be suggesting that tax dollars (such as that lost due to no capital gains on extra TFSA profits) are abundant and we don’t need to recoup them.

Hmmm. Reminds one of those Reagan era neo-con-tards who used to say that resources were not “meaningfully finite”.

Just not true. The TFSA must be cut back, we need those extra tax dollars.

Silly statement. TFSA contributions are in after-tax dollars. Without the tax shelter one can only presume a lot of said money would be consumed rather than invested. As I have said repeatedly, the RRSP is vastly more favourable to the wealthy and poses a massively bigger loss of revenue to the government. You are hunting the wrong rabbit. — Garth

#99 RayofLight on 10.12.15 at 9:41 pm

#68 Joe on 10.12.15 at 8:05 pm
Anyone stupid enough to vote for a party for a meager $5K tax free benefit shouldn’t even quality for a drivers license
————————
Why is it I think this is a “sour grapes” statement from you? I do because you aren’t doing the math like an investor would. This is not a “one time “thing, but an annual thing. The extra $5,000/year, if invested at 10% over 20 years is a touch over $320,000. Some license ! This is investing monies that have already been taxed, monies the state has already received it’s “pound of flesh” for.

#100 Smoking Man on 10.12.15 at 9:46 pm

Ill be back when the election is over.

To many troll’s

#101 joblo on 10.12.15 at 9:48 pm

#85 [email protected] on 10.12.15 at 9:05 pm
I advanced voted for my tfsa today. Choice was pretty simple funny how that works.

Do you have a cow?

#102 I HAVE A QUESTION on 10.12.15 at 9:48 pm

In retirement it will not boost you into a new tax bracket (as will money from an RRSP), nor reduce CPP or OAS benefits.

WILL IT REDUCE OR ELIMINATE GIS ( GUARANTEED INCOME SUPPLEMENT IF NO OTHER INCOME IS RECEIVED ?

No. And stop yelling. — Garth

#103 Ponnaps on 10.12.15 at 9:49 pm

Nora Lenderby on 10.11.15 at 10:26 am
#259 Ponnaps on 10.11.15 at 1:23 am
Is the wearing of niqab about religious freedom or is it about personal choice? Everyone seems equally ignorant…

Actually it’s not any of my business (or yours).

If someone breaks a law, that’s different.

—————————————–

A rather foolish assumption that all laws that are needed to be made are already made..

It might not be any of your business but it isn’t your business to tell me it isn’t mine..

#104 Old stock Canadian on 10.12.15 at 10:00 pm

Is the government elected to care people well being or just job and economy. The government has a responsibility to translate job and economy into people well being. When average canadian earn a dollar, he or she owe the bank $1.63. because every government responsibilities such as infrastructure, housing and transportation were leave it to people hands. Have you seen three vans parked in the suburban homes and paying 407 Mike Harris fees. What is the difference between Canada and Greece? In Greece government owe the money, in Canada people owe the money. In fact the government hack their debt into Canadian people, this hack called economical action plan.
If you want to know the Canadian well being, check the historical sales of anti depressant drugs. Unfortunately, all that statics were not published and the scientists and statisticians were muzzled.

#105 Herb on 10.12.15 at 10:04 pm

#73 Tripp,

there are far bigger things at issue in this election, such as whether MPs continue to be bobbleheads or revert to serving contsituents, or whether committees of Parliament function again or stay irrelevant partisan platforms.

The “financially illiterate masses” can’t make their TFSA contributions of $5,500 a year, and wonder just why and for whom the $10,000 contribution limit is such a campaign issue.

I know both Trudeau and Mulcair (I presume you do not). They are every bit as autocratic and dictatorial as Harper. Nobody should think they are voting in this election for democratic renewal. Ain’t there. — Garth

#106 For those about to flop... on 10.12.15 at 10:06 pm

Thanks for sticking up for me Common Sense but maybe Freedom First is right after all and I do have mental illness .
After all the definition of insanity is to do the same thing over and over and expecting different results ,which I do by trying to show certain people on this blog that there more than one way to live life.
I am married and I rent can you imagine the horror!

#107 GenXer on 10.12.15 at 10:08 pm

I wouldn’t recommend commuting your pension if you are a private sector employee. I know many sad stories of teachers and government workers who were convinced to commute by financial planners. They consequently lost their life savings and are in a terrible place. There are very few examples of terrible pension situations out there – be careful in the choices you make!

People lose money (pension or otherwise) because they make bad choices, usually based on greed. Your generalization is useless. — Garth

#108 Wild roasted nutter on 10.12.15 at 10:08 pm

Took 5 minutes to vote. Harpo has got to go – list of reasons is endless.. fundamentally undemocratic.. love the TFSA but it ain’t a make or break for me…

Hopefully the airhead or the commie are limited to a minority. Brutal set of choices.

#109 GenXer on 10.12.15 at 10:09 pm

Oops – that should say public sector. Of course no one in the private sector has a pension these days anyhow. Lol.

#110 Ray Skunk on 10.12.15 at 10:13 pm

#69 Daisy Mae

Remarkable how the anti-Harper brigade always bang on about the “unfairness” of FPTP when the results don’t go their way.

Well, guess what, it works both ways.

Queen of the Ontario Kleptocracy Kathleen Wynne also got elected with a pitiful amount of popular support – I don’t see you moaning about that though.

FPTP is what we have. It was defined before Harper got elected, he got elected under that framework. Same for Wynne and any other ruling party that happens to ruffle feathers.

Deal with it – the same way I (and others) have to here in Ontario.

#111 Lobster Man on 10.12.15 at 10:21 pm

#80 TS on 10.12.2015 at 8:53 pm

The property tax you pay every year is a form of a “wealth tax”, based on the property’s assessment value (or the equivalent net worth). You pay with after-tax money. And guess what? To the tax collector, this is the most efficient form of taxing the masses.

#112 Steve French on 10.12.15 at 10:27 pm

i give Smoking Man 2 days before he’s back.

He’s more addicted to the greater fool than JD and UFOs.

Plus his 48 fan rating might start to slip, which would be disastrous for forecasted profit margins on his book sales.

#113 GenXer on 10.12.15 at 10:38 pm

People lose money (pension or otherwise) because they make bad choices, usually based on greed. Your generalization is useless. — Garth

Agreed – every situation is unique, which is why making a broad suggestion that individuals commute their pension is not particularly helpful either.

I provided considerations for and against. I can stop writing this pathetic (free) blog and just go and make money if you prefer. — Garth

#114 Masked Avenger on 10.12.15 at 10:42 pm

Well ya just knew this was gonna happen… ridem cowboy.

http://www.cbc.ca/news/canada/edmonton/1.3267816

#115 Bobby on 10.12.15 at 10:43 pm

I am a firm believer that many will vote how the election affects them. Many people I have spoken to realize they will have no pension benefits and the best way to achieve a reasonable retirement is the TFSA. RRSP’s are limited to 18% of income so many who are diligent savers are limited to how much they can contribute. With the increased TFSA limits they can contribute $10,000.
Mr Trudeau has tried to create a class war by pitting people against each other based on income. It’s sad but a wedge issue. What he has failed to mention is that it is those in the higher income brackets that hire workers and provide jobs. Maybe now I’ll do my own yardwork or make time to paint my own house. With higher taxes on the wealthier, many may be finding themselves without work. Be careful what you wish for. It just may come true.

#116 Tony on 10.12.15 at 10:47 pm

Re: #80 TS on 10.12.15 at 8:53 pm

The chances are high the Canada Pension Plan will go broke in the future. Garth’s advice about taking it at age 60 is very good advice.

My advice is sound. Your statement is nutso. — Garth

#117 Nora Lenderby on 10.12.15 at 10:49 pm

#49 Nagraj on 10.12.15 at 7:03 pm

The Bard of Avon also had trouble spelling, including his own name. Correctness is such a corset for the creative don’t you think?

As for heartache, wisteria doesn’t flower for the first seven years or so they say.

#118 Missing The Point on 10.12.15 at 10:54 pm

The RRSP is a far greater gift to the wealthy. Ditch that, too? — Garth

Firstly, that statement is highly debatable. Just ask the offshore guy with the $4M house in Van, reporting $20K/yr to Revenue Canada. Pretty sure he prefers the TFSA.

Secondly, I don’t recall RRSP contribution limits recently being doubled….

RRSP limits increase annually. This is a far more potent tax avoidance and deferral tool than the lowly TFSA. You guys are starting to sound far more dogmatic than practical. — Garth

#119 Freedom First on 10.12.15 at 10:55 pm

#89 common sense

Yes, you’re right. I will try to be more tactful. I think I am improving, but I have a few relapses now and then. Been on this Blog for years, and as people can tell you, I used to be an a$$hole a lot more often.

#120 Freedom First on 10.12.15 at 11:06 pm

#92 Paul
#94 Paul
#95 Paul

Paul, zing zing zing. One zinger after another! All perfectly delivered!

#121 Joe on 10.12.15 at 11:11 pm

Re 94 Paul on TSFA.

I do know what it is, and probably unlike you I’ve maxed it out each year, yet it is a paltry proportion of my investments.

#122 Smoking Man on 10.12.15 at 11:13 pm

If your a clueless investors that wants a safe bet , go with Garth. You wont lose.

But if your a greedy young ambitious cowboy. Trade like me.

Your problem, if your not dyslexic. If you cant filter the bullshit from reality, see it visually rather than fundamentay you will lose your shit.

I finally figured out Obama. Iran nuke deal, in action in Syria. Being attacked by the five neocon MSM outlets.

Neoconservatives out of control, what he says about Russia dose not correlate with his actions.

He’s out to get the cons..just wondering what the neoconservatives did to Obsmas mentor, Kissinger’s to piss him of so much. He’s always had Obama’s back.

Perhaps the old bastard finally grew a heart. Tired of the brutalization of the Palestinians, Knowing that NutAndYahoo has clearly gone coronal Kurts.

Dose not what to see the world end in a mushroom cloud, instageted buy phycopathic freeks.

John McCain time to retire. Or face the consequences of building 7

Its a comming.

#123 Joe on 10.12.15 at 11:17 pm

#98 RayofLight of Light

Nothing to do with sour grapes. I take advantage of it every year, yet 5K in savings a year is small relative to my total investments, even after 20 years my other investments will dwarf the TFSA investment. You are missing the point, in that voting someone to lead this country who has shown a lack of regard for democracy, transparency, accountability, and has a horrible economic performance just so you can get an extra 5K a year that is not taxed is very narrow minded.

#124 BillyBob on 10.12.15 at 11:26 pm

#68 Joe on 10.12.15 at 8:05 pm
Anyone stupid enough to vote for a party for a meager $5K tax free benefit shouldn’t even quality for a drivers license

—————————-

Anyone stupid enough to believe that the TFSA is simply a $5K tax benefit shouldn’t even qualify to comment.

As Mr. Turner has succinctly described, it’s about ideology: would you rather have the government control your retirement funds, or control them yourself? I know which one I’d choose, but then, I had to leave the country to find a decent living. So my faith in Canadian institutions isn’t exactly off the charts.

It seems most Canadians will vote like sheep, bleating for the government shepherd to protect them. Sad.

#125 Smoking Man on 10.12.15 at 11:45 pm

#118 Freedom First on 10.12.15 at 10:55 pm
#89 common sense

Yes, you’re right. I will try to be more tactful. I think I am improving, but I have a few relapses now and then. Been on this Blog for years, and as people can tell you, I used to be an a$$hole a lot more often.

Ive never thought of you as an asshole, just nice dude that never discovered love.

Nothing wrong with that..

#126 conan on 10.12.15 at 11:55 pm

Wednesday afternoon is game 5 and
Dr’s notes are skyrocketing on the futures market.
Its a bubble.

#127 Smoking Man on 10.13.15 at 12:03 am

#111 Steve French on 10.12.15 at 10:27 pm
i give Smoking Man 2 days before he’s back.

He’s more addicted to the greater fool than JD and UFOs.

Plus his 48 fan rating might start to slip, which would be disastrous for forecasted profit margins on his book sales.

Im starting to hate you.

#128 Adam on 10.13.15 at 12:10 am

If anyone thinks saving an extra $5k is the difference between them and the 1%, they are out of touch with reality. The top 1% investors save >$100k more than the average Canadian. And the sad thing is, an extra taxable 5k investments doesn’t even register with the so-called 1%. Taking away $5k from the current TFSA limit only hurts the middle class who work hard at saving the little they can.

#129 Observer on 10.13.15 at 12:17 am

Not Another Trudeau.

#130 boonerator on 10.13.15 at 12:18 am

#63 Daisy Mae on 10.12.15 at 7:55 pm

#7: “There are a small number of TFSA holders who have hundreds of thousands, if not low-digit millions in them. Largely derived through either concentrated positions, or active trading strategies executed with a particular element of luck….”

**********************

Yes. I’m sure. “Hundreds of thousands”. Millions may have TFSAs…but a tiny portion of the populace will ever be able to take full advantage. Thus, Harper has catered once again, to the 1%.
=============================

I remember reading about the people using their TFSA’s for very active and successful trading, i.e. making the millions referred to above.
CRA was very, very interested with bad news for the traders.
http://business.financialpost.com/personal-finance/tfsa/canadians-with-too-many-wins-in-their-tfsa-being-targetted-by-cra

#131 Ralph Cramdown on 10.13.15 at 12:19 am

#123 BillyBob — “it’s about ideology: would you rather have the government control your retirement funds, or control them yourself?”

How did we get to the point where some people think the “control it yourself” option is the one with a registered account, where the trustee reports every dollar deposited and withdrawn to the government?

#132 Adam on 10.13.15 at 12:21 am

And to the 45 year old guy who can’t manage to save $5.5K a year with 2 daughters and too many wobby pops, TRY HARDER! How much do you spend on wobby pops a year? I bet you can make some cuts in your budget and meet a measly $5.5k savings. You probably spend $5k a year on silly things like cable, a ridiculous cell phone plan, wobbly pops and a gym membership you don’t use often enough.

#133 Smoking Man on 10.13.15 at 12:27 am

To Hunter s Thomson.

You beautiful man.. You did everything right, but cared about write. Grammar and shit. Teachers pet friendly im thinking.

If it wasn’t for this blog, i wouldn’t even know you.

Im to god damm hammerd to try and understand why you typed Hemingway. Read shit thinking that would make you a better writer.

You freek…. Had you gone with you…and you only..

It would have been better. Not that im complaining.

Tell god, that a goon from jr hockey is pissed and whats going on, and we are having words.

#134 Kirk on 10.13.15 at 12:49 am

“The RRSP is a far greater gift to the wealthy. Ditch that, too? — Garth”

So the wealthy should prioritize RRSP. Glad we sorted this out. Next, what is the critical income/wealth below which the TFSA become preferable? Answer: in most cases 0. Meaning – RRSP are greater gift than TSFA to almost everybody.

This is why we should keep RRSP. TFSA are also gift to everybody, but smaller, and only some can take advantage of them (after correctly priotizing RRSP). Therefore, ditch it. Or put income caps as the Roth IRA in the USA.

#135 Smartalox on 10.13.15 at 12:52 am

FYI: notes from the advance polls!

http://www.cbc.ca/m/news/politics/pre-marked-ballots-dirty-vancouver-1.3267769

It’s important that voters verify that their ballots are clean and unmarked when they receive them at the polls. If your ballot has ANY marks on it (other than the mark you choose to make) it will be considered spoiled, and will NOT be counted.

Any smudge, or inkblot that’s on a ballot will spoil it, even if you clearly mark your choice.

If you are handed your ballot, and it is damaged, or has any marks on its white spaces, you have the right to return to the elections Canada official, and request (as many as you need) to receive a clean one.

#136 Obvious Truth on 10.13.15 at 1:00 am

Still say the kid wins.

He may win big game day at the ballot box!

#137 Rural Rick on 10.13.15 at 1:02 am

In the spirit of Canadians voting against politicians rather than for them. I offer this musical interlude.
https://www.youtube.com/watch?v=Brs6Xr9yzOY

#138 jim dandy on 10.13.15 at 1:05 am

#21 Popeye

I highly recommend any federal worker in there mid to late 40’s with 20+ years to call the Pension Center at 1800-561-7930 and provide your PRI# and find out what your transfer value is right now discuss this with your spouse and financial adviser.

Good luck all

I did just that last week and guess what? They won’t give me the value unless I terminate employment first! They did send me my “profile” and a link to actuaries in my area who will do the calculation for a fee.

B.C. just changed the Pension Benefits Standards Act and any plan can be converted to DC from DB, with no protection for current DB members (unlike Alberta). My coworkers were totally oblivious to these significant changes and prefer to keep their heads in the sand.

I turn 50 next year and the early retirement penalty is reduced from 25 to 15% so I’ll commute then.

#139 Valleyboy on 10.13.15 at 1:10 am

Capitol gains are only taxed at 6 percent. Aren’t you sniveling about the tfsa limit a bit much these days.

The max cap gains rate is 25%. — Garth

#140 Great Canadian Bubble Co. on 10.13.15 at 1:22 am

Wait, wait … aren’t houses the new DB Pensions? That’s what everyone keeps telling me.

LOCs, reverse mortgages, governments that support ownership for all and interest free capital gains. I don’t need a TFSA.

#141 Rabbit One on 10.13.15 at 1:54 am

Those who are unhappy with new $10,000 /year TFSA limit, did they even make it to old $5,000 limit?
Why $10,000 is bad and $5,000 was okay?

No one has to max TFSA contribution limit.
It is all your choice.
There is no penalty for not having TFSA account either.

Have they even contributed $1,000, or $2,000 in TFSA account in last 7 years?
If not, that was their choice.

TFSA is fair, it is your option and opportunities to grow your money tax free for long time.
Not to help wealthy to get richer.

In fact, the very wealthy ones I know, most don’t do RSP, or TFSA.

Those registered accounts do not help the wealthy as much as to the low to middle class people.

#142 Rodthebod on 10.13.15 at 2:24 am

I like my TFSA and credit you Garth for helping me get it started and managing it on my own. But damn, an increase in that is no reason to vote for cheater politicians who constantly chip away at our institutions while lining their pockets with our tax dollars.

#143 BS on 10.13.15 at 2:27 am

The choice is simple. You trust others, or you trust yourself.

This applies to pretty much everything, not just pensions. Those that trust their own judgement vote for smaller government, keeping their earnings to spend on what they choose and prefer to make their own decisions. They have no problem paying taxes for necessities in society including helping those with less, but they realize pensions, daycares, etc do not need to be run by the government.

Those that don’t trust their own judgement want a nanny state to run their life. I feel sorry for those people.

Lets hope we have enough people with good judgement voting.

#144 BS on 10.13.15 at 2:33 am

Firstly, that statement is highly debatable. Just ask the offshore guy with the $4M house in Van, reporting $20K/yr to Revenue Canada. Pretty sure he prefers the TFSA.

Someone making $20K per year pays no income tax anyway. They don’t need a TFSA or RRSP. Plus an “offshore guy” does not qualify for a TFSA.

#145 BS on 10.13.15 at 2:54 am

Right…I’ll make sure to run straight to the bank to invest that extra 20K I just can’t seem to spend on food…shelter…gas…insurance…childcare….heat….electricity….car payments….RESP’s….clothing…etc etc

In China the average income is probably less than 10% of your families but the average person manages to save 25% to 50% of it. They also require most of those things you listed. They just have more will power to save.

#146 Tripp on 10.13.15 at 5:53 am

#104 Herb on 10.12.15 at 10:04 pm

What I meant is that the TFSA works for a third of canadians that have one. One can label them as “rich” but most of them are hardworking middle class, many of whom made sacrifices to contribute $5,500 and could make more sacrifices to contribute $10,000. And they are voting as well. It has nothing to do with dictatorial politicians, it has everything to do with their financial future and retirement stability.

Meanwhile the true 1% are getting highly qualified and competent financial and legal advice how to invest much more than the TFSA limit. They will be the least affected since $10,000 for them is pocket change.

#147 Greg Stalikon on 10.13.15 at 6:27 am

To #40 Bottoms Up

If they want to cap or reduce the TFSA limit or put some lifetime limit or cap on TFSA’s, tax it or do whatever they want to get more tax revenue which is their ultimate goal, they should do the same for all equities, real estate and other capital gains advantaged investments.

Tax consistency and everyone paying the same taxes on their income which capital gains is a form of income for income tax purposes should be applied.

The Liberals and NDP ultimate goal is to make everyone more dependent on the government and make it look like they are the saviors of Canadians.

Tax people to death and make sure the everyone is poorer. Income equality with poverty for all.

The TFSA, along with the RRSP, is intended to be a tool to reduce dependence on the public pension system. I’d say that is in the best interests of everyone. — Garth

#148 The Other Chris on 10.13.15 at 7:11 am

IMHO, a person would have to be nuts to commute a Federal government pension — the Federal government is constitutionally prohibited from defaulting on pension obligations, and the actuarial assumption built into the Federal government pension plan is not that far away from the best case scenario you’d get with an indexed portfolio, particularly because it is given in real, not nominal terms.

Provincial pension plans are a little more of a wildcard, because the provinces can default, but in most cases, I wouldn’t consider commuting. You might have modestly better long term returns, but you don’t have the timeframe to recover if markets immediately go south. And the provinces would never default completely anyway… at most you’d get a Detroit-style haircut, where pensioners take a 20% benefit cut.

Private sector DB pensions though, commuting makes a lot more sense.

There is no ‘constitutional’ guarantee of federal pension benefits. Governments can change provisions with legislation. Beyond that, commuting any pension you are allowed to makes sense if you care about maximizing the transference of pension benefits to a widowed spouse or family. — Garth

#149 Ralph Cramdown on 10.13.15 at 7:32 am

“Those registered accounts do not help the wealthy as much as to the low to middle class people.”

I suppose I should be used to it by now, but I’m still not. How, on a finance blog, so many people demonstrate that they don’t understand the effect of the combination of graduated tax brackets, exponential growth and long compounding periods. Get out your favourite spreadsheet and learn yourself something!

#150 Bottoms_Up on 10.13.15 at 7:37 am

#27 Popeye the Sailor Man on 10.12.15 at 5:52 pm
—————————————
While i agree commuting a pension can make sense in order to ensure an asset is there for the kids, i think itbis reckless to promote people in their 40s to do this. They lose 50% employer contribution for the rest of their working lives, they won’t accumulate value due to extra years worked, and they lose access to the expert investor panel that has grown the pension fund at or better than Garth’s rate (8+% per year).

Unless you are leaving an employer, most DC pensions are non-commutable. — Garth

#151 maxx on 10.13.15 at 8:13 am

#6 Missing The Point on 10.12.15 at 4:19 pm

“The point is, the majority of Canadians are against an increase to the TFSA, as such an increase only benefits the minority. It’s seen as a tax break for the 1%.”

Let me finish your sentence: …….1% by congenitally house-horny fools who are up to their eyeballs in debt, or those who couldn’t balance a cheque book if their lives depended on it.

It’s a case of the green-eyed monster showcasing a petty, ugly side of many Canadians.

The green-eyed monster is operating at full tilt. Pure and simple, and this issue is a very handy device for the Dips and Libs.

Get the point?

#152 Craig Stevens on 10.13.15 at 8:17 am

If the NDP and Liberals wanted people to be less dependent on government, they would actually enhance not decrease the tax benefits of TFSA’s, RRSP’s, RESP’s, RRIF’s and other non-registered investments.

They would also allow people to save more taxes so they can be more in control and financially better, independent from government.

They do the opposite, this is especially true when a spouse passes away and there are now higher tax rates for the remaining spouse and family members. This can easily add thousands a year in more taxes.

Don’t forget, the Ontario Liberal government put a tax on funerals, cemetery, burial, cremation costs, 8% more to be exact.

This can be anywhere from $500 to $1,500, maybe more. These people have no shame or any conscience even after the death of a loved one.

#153 The Other Chris on 10.13.15 at 8:24 am

@Garth: 147

There is no explicit guarantee of federal pensions in the constitution, but the Constitution Act, 1867 guarantees that general federal liabilities cannot be abrogated.

Basically this means that *accrued* pension liabilities of the Federal government cannot be revoked or defaulted on by a change in legislation. The Federal government has the power to change pension accruals going forward, but it cannot retroactively change already accrued pension benefits. Basically past federal pension accruals have the same legal status of Federal government bonds. The Federal government has no choice but to print money if it cannot meet past accrued pension obligations; it cannot, constitutionally, default.

The provinces are a different story. Two provinces have defaulted in the past on their obligations, so this could happen again.

#154 Transparency on 10.13.15 at 8:36 am

Hi Garth,
Any comments on the Kevin Page book?
thank you

#155 Craig Stevens on 10.13.15 at 8:41 am

To #138 Valleyboy

Actually, 25% should be the highest income tax rate for capital gains but those paying that highest capital gains tax rates are losing OAS clawbacks from means testing and probably hit with other new surtaxes, income tax rates from provinces on high capital gains made in one year.

#156 SunShowers on 10.13.15 at 8:48 am

“I know both Trudeau and Mulcair (I presume you do not). They are every bit as autocratic and dictatorial as Harper. Nobody should think they are voting in this election for democratic renewal. Ain’t there. — Garth”
————————————————–

You sure about that Garth? Could I possibly trouble you for an example?

While I suppose it wouldn’t surprise me if it were true, Mulcair/Trudeau actually allow their MPs to talk to constituents about issues (such as proportional representation, which just so happens to be my biggest motivator for voting ABC). Conservative MPs are always “no comment”, much like you were told to do.

That’s a step up, I suppose.

Yes. Sure. — Garth

#157 L.I. on 10.13.15 at 9:18 am

Hi Garth,

I can’t commute my DB pension unless I quit before 55. Some jobs are not easily replaced. What would you recommend in this case?

Check with HR. Many plans allow you to commute at 55, but you certainly do not have to quit. — Garth

#158 Ernie on 10.13.15 at 9:19 am

TFSA’s are not for the 1% only ! TFSA’s are for all people of age 18 and up. Trouble is most {95%}are financially illiterate b/c of info passed on from parents , [email protected] etc. MSM doesn’t help any by printing misleading articles. Having read the comments for the past few days regarding TFSA’s far too many can’t see beyond the point of their nose. Give up purchasing the frivolous shit and trying to keep up with the Jonses .

#159 Dup on 10.13.15 at 9:32 am

Other option is to:
Spoil the vote if you believe that none of these clown politicians care about the country or it’s people.

That’s no choice, and nobody cares. You are wasting a gift. — Garth

#160 Bottoms_Up on 10.13.15 at 10:00 am

#157 Ernie on 10.13.15 at 9:19 am
——————————–
Food, hydro, insurance, daycare, mortagage etc. are not frivolous.

#161 Investorz on 10.13.15 at 10:07 am

“Not my job to prevent borrowers’ bad decisions” says Poloz:

On BNN:
http://www.bnn.ca/Video/player.aspx?vid=725497

#162 Herb on 10.13.15 at 10:08 am

” Nobody should think they are voting in this election for democratic renewal. Ain’t there. — Garth” (at #104)

If democratic renewal ain’t there, I’ll vote to change the party in power and keep the hope of democratic renewal alive.

You’d better resurrect digital democracy, Garth.

#163 Daisy Mar on 10.13.15 at 10:12 am

#11: “H is smarter, hands down.”

********************

Smarter? I’d say crafty. Devious. Untrustworthy. Arrogant. I could go on, forever.

#164 sean on 10.13.15 at 10:29 am

Can you expand a bit on what you mean by “return-of-capital” for a commuted pension not being added to taxable income?

My understanding is that if you commute you can transfer an age-related amount (based on the CRA’s “maximum transfer value” or “MTV”) to an RRSP, but that you pay tax at your marginal rate on any amount over the MTV. Like any RRSP, withdrawals are taxed so you end up paying tax on every dollar of the commuted value eventually.

The rationale for this is that the pension was funded by pre-tax (employer and employee) contributions.

The problem at the moment is that the CRA MTV amounts have not been adjusted to reflect the fact that at today’s extremely low discount rates you need a much larger commuted value to produce the stream of income planned by the pension. As a result, you can end up paying your top rate in a single year on more than half the commuted value.

I agree that commuting is beneficial to avoid the possibility of a future plan failure, but was under the impression that the tax penalty due to low MTV values made this option almost prohibitive. I would love to find out that I’m wrong about this.

#165 TurnerNation on 10.13.15 at 10:31 am

Well QSR.TO got its pop today. Good food? That’s a Whopper.

Timmys stock.

#166 Daisy Mar on 10.13.15 at 10:39 am

#30: “I thought long and hard about TFSA etc. but still decided to vote for the kid. I could not bring myself to vote for a almost-fascist and dippers pissed me off with the Niquab thing even though its silly. Hey, I myself am a immigrant but I think people need to make an effort to integrate if they move countries and not go around town looking like its Halloween.”

****************

“When in Rome….”

#167 liberals or conservatives on 10.13.15 at 10:46 am

#77

“What they will do is take less income. They do this by incorporating, and taking some money as salary, lets say 150k.”

pwn3d

Its not like they don’t do this right now. They absolutely do. Its not going to change much when the 1% get taxed more in the future.

This is the fear argument that the 1% use to argue against higher taxes in their bracket.

The government has information on all of the people with incomes over 200K/yr. They will be the first ones to know who is using loopholes to pay less tax in the future and they can adjust accordingly (may be someone has some information on the parties platform regarding closing these loopholes).

At the end of the day, 5-10k more per year won’t impact the lives of people making 200k or more, and they will most likely not make radical changes because of the increases. If they decide to leave the county because of the extra 8k that they pay on a 330k salary then that’s their loss. There is someone there waiting to replace them.

#168 Franco on 10.13.15 at 10:47 am

Beautiful post.

#169 Daisy Mae on 10.13.15 at 10:49 am

#32: “Forgot to say that I availed myself of early voting. There was a line up and had to wait 45 minutes. Lots of people have made up their mind. Change is definitely here.”

******************

I most certainly have. The wait was 1/2 hour…but I was amazed at the line-up 5 minutes after polls opened. Out the door! We still have to deal with the ‘first past the post’ method of voting….and Harper won his ‘majority’ with 35% of the popular vote which irks me.

#170 Julia on 10.13.15 at 11:03 am

#156
“Check with HR. Many plans allow you to commute at 55, but you certainly do not have to quit. — Garth”

I found this topic very interesting so I checked when I got back to the office today. My DB plan only allows me to commute if I leave my employment before the age of 55. After 55 I will not be able to even if I leave unless I retire. Then I can have the option of collecting for the rest of my life or commute.

#171 Gonkman on 10.13.15 at 11:09 am

@ #157 Ernie on 10.13.15 at 9:19 am
——————————–
Food, hydro, insurance, daycare, mortagage etc. are not frivolous.
—————————————-

Mortgage – If you have too much house you can’t afford it’s Frivolous – 1600 – 1800SQFT is big enough for a family of 4. Save up and PLAN Ahead.

Hydro – If your house isn’t big and you teach kids to turn things off it won’t be an issue. I have a Family of 4 and I pay $100-125 a month.

Daycare – Plan accordingly. I have been there shelling out $1200 a month. Better skip the Fancy new car if you want kids.

Insurance – Drive Used Vehicles and package your insurance together. Shop around.

Food – Buy on sale and stock up. I feed a Family of 4 for under $700 a month. Learn to Cook.

It’s all about choices and having a budget. Something EVERY Family needs to do. If you don’t have a Budget and a Plan = FAIL.

If people can’t take the time to Plan, Learn and Improve their own situation I have NO Pity for them.

You should know where every $ you bring in is going.

Run your Personal Finances like a business. And hears a hint if your books are in the RED that’s BAD…. or you have a government budget.

I wish my Province would Mandate our Educational System to teach a Personal Finance Course in High School as opposed to teaching them there are now 6 Sexual Genders.

Fortunately I am teaching my children about Personal Finance and how NOT to be a slave to Debt, Live within your means.

#172 Daisy Mae on 10.13.15 at 11:12 am

#74: “So your saying that there is a chance you might vote Conservative ?”

********************

LOL I just needed to let off steam….

#173 pbrasseur on 10.13.15 at 11:25 am

You are wasting a gift. — Garth

Very true that democracy is a blessing we are very fortunate to have. It is essential to throw the «bums» out!

BUT democracy should not become a path to socialism, powers of politicians should be limited and should not include for example the power to take anything they want from us no matter how virtuous the intent. Otherwise it’s the tyranny of the majority (actually it doesn’t even take that much in our system) , currently the only threat that stops socialists from taking everything from the «evil rich» is the threat of economic collapse. This is not right is a society based on individual freedom and free market capitalism.

This is why voting is in a way an encouragement for politicians to mingle in our lives more than they should, more than the constitution should allow.

From that point of view not voting IS a rational option, it’s a way to tell politicians get out of our lives already. From that standpoint a low participation is positive, it means that many people no longer think the solution(s) comes from government, to me that’s a good thing.

#174 Daisy Mae on 10.13.15 at 11:28 am

#109: “Queen of the Ontario Kleptocracy Kathleen Wynne also got elected with a pitiful amount of popular support – I don’t see you moaning about that though.”

****************

Maybe ’cause I don’t live in Ontario?

#175 CHERRY BLOSSOM on 10.13.15 at 11:32 am

One has to consider that the money generated from a large TSFA from untaxed Interest and Dividends gets transferred to ones bank account and spent on food and gas and other stuff. So it is good. I have voted for Greens every election since I was 21, my first vote. I would dearly love to continue to vote for Elizabeth May but I will vote for a man I hate, Harper, because I want the $10,000 limit on my TSFA. I don’t feel that Canada can or will ever be fixed or fair again. The Country is not the Canada we used to know and love. It is doomed. And Garth most Canadians feel this way also so we may as well get something out of it. TSFA all the way.

#176 pinstripe on 10.13.15 at 11:37 am

harpo did an excellent job making a non-issue into an election issue. Another red herring.

ABC

http://www.cbc.ca/news/canada/edmonton/masked-man-edmonton-election-voting-1.3267816

#177 Paul on 10.13.15 at 11:38 am

#162 Daisy Mar on 10.13.15 at 10:12 am

#11: “H is smarter, hands down.”

********************

Smarter? I’d say crafty. Devious. Untrustworthy. Arrogant. I could go on, forever.
———————————————————-
In case you haven’t notice you are going are forever !
Especially about someone you don’t know.
People like you just can’t see it!

#178 Bottoms_Up on 10.13.15 at 12:01 pm

#170 Gonkman on 10.13.15 at 11:09 am
————————————–
Ok, let’s say you are renting for $1400/mo, and making one daycare payment. Your no frills monthly expenditures are now $3500, not factoring in gas, snow tires, car payment, parking/transit, water, heat, clothing, footware, diapers, extracurriculars, car repair, internet, tv, phone, RESP, allowance, miscellaneous. Let’s add $1000 for that. So $4500 of after tax dollars, now you are going to find an extra $800 month per parent for TFSA, bringing your no frills after-tax monthly budget to $6100. That requires about a gross family income of $100k (and remember thus family is not paying property tax nor house maintenance). Now tell me again how the TFSA benefits the average family income household? Because in my reality upper-middle income families do not have enough to contribute to the TFSA.

#179 Ralph Cramdown on 10.13.15 at 12:02 pm

I’d like to put in a kind word for first-past-the-post.

It is true that we sometimes get a government that the majority of us don’t want. But we nearly always get a government, capable of governing, with the support of a large number of people (a plurality, usually). Contrast with the horrible systems in other countries like Italy, where governments collapse so often it isn’t even front page news, Isreal, where fringe parties with 5% of the vote often drive major policy decisions as government kingmakers. Or the United States, where half the informed population currently blames Obama for “gridlock” and the other half blames house Republicans.

I know that democracy wonks have all kinds of systems like party lists (secret machinaions in cigar-filled backrooms), and single transferrable vote (too complicated for voters who can’t even figure out strategic voting). Humbug.

The Westminster system has served a number of countries well for a combined sum of centuries, with few revolutions, civil wars or coups.

#180 Wild roasted nutter on 10.13.15 at 12:14 pm

#156 L.I. on 10.13.15 at 9:18 am

Hi Garth,

I can’t commute my DB pension unless I quit before 55. Some jobs are not easily replaced. What would you recommend in this case?

Check with HR. Many plans allow you to commute at 55, but you certainly do not have to quit. — Garth

——————-

Hard to believe you could continue in same position.
I can commute up to age 55, but I most certainly would have to quit my job to do so. Of course I have to quit because you have no choice to pay into it. There has to be a catch, they aren’t gonna just let folks walk off that easy, or the plans would have big problems with planning. It pisses me off – would be very interested in commuting but not looking to quit at 55. Would have much preferred a matching DC plan, which they are going to end up with at some point.

Speaking of preferreds .. tank those suckers some more!

#181 fancy_pants on 10.13.15 at 12:20 pm

it appears a lot of angry folk come out of the woodwork during elections. What motivates people is fascinating. ‘lets vote for change’. Really?

as long as people on the public handouts are voting, change will never occur, it will be more debt on the backs of the working class.

party rages on. but so do the clocks.
http://www.nationaldebtclocks.org/debtclock/unitedstates
http://www.nationaldebtclocks.org/debtclock/canada

don’t care what your little crystal ball says, when significant change comes it won’t be positive.

#182 Mark on 10.13.15 at 12:21 pm

“Capitol gains are only taxed at 6 percent. Aren’t you sniveling about the tfsa limit a bit much these days.

The max cap gains rate is 25%. — Garth

Both Garth and the other poster are correct here (weird, eh?). For very long term investment (ie: 40 years), the effective annualized rate on capital gains can go lower than 10%, and even as low as 6%. This is on account of deferral of actually paying the capital gains until the investment is sold.

If capital gains arising from an investment is ‘realized’ each year of the investment, rather than deferred, Garth is correct, the maximum rate approaches 25% (ie: one half of the marginal rate).

Thus the system of taxable capital gains highly favours those who invest in successful businesses over the long term. Which has its advantages (stability for the economy), and its disadvantages (potentially poor mobility of capital!).

I personally feel the point made by another poster, that the TFSA is a drop in the bucket for the ‘rich’, and that other tax breaks are available, is well taken. The TFSA is largely only a significant benefit to fixed income investors who at this point are likely investing in an asset class at its long-term peak. In other words, the government is basically herding people into this type of investment at one of the worst possible times through the tax incentive offered by the TFSA.

#183 Ralph Cramdown on 10.13.15 at 12:26 pm

#174 CHERRY BLOSSOM — “One has to consider that the money generated from a large TSFA from untaxed Interest and Dividends gets transferred to ones bank account and spent on food and gas and other stuff.”

If you’re poor, or one of those “die broke” folks. My familys’ will likely pass, minus a small inheritance tax, to the next generation.

#184 Millmech on 10.13.15 at 12:28 pm

#177
Yet they have money for at least 3-4 laptops,3-4 phones,3-4 tvs,plans for all that(internet,cable,phone plans).Most families I know have all that and their above mentioned plans are a big drag on family expenses.

#185 BS on 10.13.15 at 12:30 pm

Ok, let’s say you are renting for $1400/mo, and making one daycare payment. Your no frills monthly expenditures are now $3500, not factoring in gas, snow tires, car payment, parking/transit, water, heat, clothing, footware, diapers, extracurriculars, car repair, internet, tv, phone, RESP, allowance, miscellaneous. Let’s add $1000 for that. So $4500 of after tax dollars, now you are going to find an extra $800 month per parent for TFSA, bringing your no frills after-tax monthly budget to $6100.

It looks like you are budgeting $25K per year for daycare? $25K per year daycare is not required forever. TFSA room accumulates. Once the kids don’t need daycare or need less daycare when they attend school you can make up for missed TFSA contributions in a few years. Pretty short sighted to assume you can never use a TFSA. Of course if you want to never use a TFSA bad enough that is easy to do.

#186 Edward on 10.13.15 at 12:36 pm

Bank of Canada Governor Stephen Poloz says it’s not his job to stop people from making “bad choices.”

Well, if his rate cuts continue (driving household debt higher) and the result is a further heating and a resultant burst of the Canadian housing market, it will become his problem.

http://www.bnn.ca/News/2015/10/13/Pattie-Lovett-Reid-Dont-expect-Stephen-Poloz-to-help-Canadians-kick-the-debt-habit.aspx

#187 Terry on 10.13.15 at 12:45 pm

More evidence that a US Recession is on it’s way.

http://www.businessinsider.com/china-export-data-shows-global-slow-down-2015-10

There is no US recession now, next year or in the distance. — Garth

#188 Parsonage on 10.13.15 at 1:06 pm

178 Ralph Cramdown
I’d like to put in a kind word for first-past-the-post.
__________________________________________

Well said!
Thank you

#189 Holy Crap Wheres The Tylenol on 10.13.15 at 1:08 pm

#99 Smoking Man on 10.12.15 at 9:46 pm

Ill be back when the election is over.

To many troll’s
………………………………………………………………..
#121 Smoking Man on 10.12.15 at 11:13 pm
If your a clueless investors that wants a safe bet , go with Garth. You wont lose.
____________________________________________
Holy shit did I miss the election. Wow Smoking Man that was an astounding 90 odd minutes. Couldn’t help yourself could you!

#190 Gonkman on 10.13.15 at 1:10 pm

@ #177 Bottoms_Up on 10.13.15 at 12:01 pm

Now tell me again how the TFSA benefits the average family income household?

——————————————–

You win I agree I mean no family can save ANY money these days at all. Not even $500 a year….

Scrap the TFSA’s.

Also since not “everyone” benefits from the following lets scrap these too…

These cost us lost Tax Dollars too.. and they don’t benefit the average family household?

– RRSP’s
– Income Splitting
– Public Transit Credit
– Medical Expense Credit
– Charitable Donations Credit

TFSA’s can benefit anyone over 18 years old plain and simple.

No.. not everyone can Max it our right away but it is there and will be there when they have the opportunity to save for the future.

If you can’t see that well… I really hope in the near future you get $100,000 in a lump sum and have no where to shelter it.

I am sure the Government will gladly tax your gains.

#191 Holy Crap Wheres The Tylenol on 10.13.15 at 1:15 pm

#132 Smoking Man on 10.13.15 at 12:27 am
To Hunter s Thomson.
You beautiful man.. You did everything right, but cared about write. Grammar and shit. Teachers pet friendly im thinking.
If it wasn’t for this blog, i wouldn’t even know you.
Im to god damm hammerd to try and understand why you typed Hemingway. Read shit thinking that would make you a better writer.
You freek…. Had you gone with you…and you only..
It would have been better. Not that im complaining.
Tell god, that a goon from jr hockey is pissed and whats going on, and we are having words
____________________________________________
Smoking Man when you get there ask Hunter is it was suicide or was it murder?
The night before his death, Hunter told a friend:
“They’re gonna make it look like suicide”
“I know how those bastards think.”

#192 Barrie Madu on 10.13.15 at 1:18 pm

How do you find out your unused contribution limits for your TSFA

#193 Ralph Cramdown on 10.13.15 at 1:20 pm

Regarding Poloz’s recent comments, people might be interested in the whole speech, rather than capsule reviews from ex-bank cheerleaders.

http://www.bankofcanada.ca/2015/10/integrating-financial-stability-into-monetary-policy/

Frankly, I found parts of it quite worrisome. It seems the BoC’s DSGE model doesn’t incorporate the possibility of housing bubbles, but Poloz says he’s more of a stick-and-rudder man anyway.

#194 maxx on 10.13.15 at 1:24 pm

#31 Smartalox on 10.12.15 at 6:15 pm

“……TFSAs are important, maybe we can provoke a change.

70% carries a lot of weight, and it’ll be a lot easier to change the Liberals’ or NDP’s mind on this one issue, than to try to change Stephen Harper’s mind about anything.”

I’d rather vote on it than bet on it. It’s certainly not the only issue at stake during this election, however it is another useful item I want in my fiscal toolbox.

Moreover, I believe that the TFSA is most useful to those who’ve crafted self-sufficiency as opposed to refusing to detach from the government teat.

Single-asset strategists are increasingly coming to the realization and are pissed because they borrowed their brains out for housing and it is no longer a sure thing. Values are dropping across the country. Interest rate hikes will create havoc for this sad cohort and the ruling party will no doubt continue to try to “stabilize” the economy with more rate cuts and taxpayer money, but ultimately, it’s a fail. A huge fail.

A neighbour who recently sold his property was told by the realtard: “yours is the only one to have sold since January.”

Give me a TFSA over brick and mortar any day.

#195 eddy on 10.13.15 at 1:30 pm

Low interest rates are better than high rates, if people use debt for consumption it is Their problem, and consumption debt Is exactly what the banks want.

#196 Bottoms_Up on 10.13.15 at 1:34 pm

If advanced voting is an indication, we could hit 70% voter turnout this year. The last time that happened we were in the midst of a recession and the jays won the world series……

#197 TRT on 10.13.15 at 1:34 pm

Can’t wait to see all the crying in this blog when Harper loses his majority.

#198 Ralph Cramdown on 10.13.15 at 1:38 pm

#184 BS — “TFSA room accumulates.”

No, it does not. You just *think* it does because you don’t understand exponential growth.

Build yourself a spreadsheet with two scenarios. One starts in year one, contributes $5k/year for 25 years and earns 7%/year on the balance. The second doesn’t contribute for the first nine years, then contributes a lump sum $50k in year ten and $5k/year in years 11-25, earning the same 7%.

Scenario 2 is $50k behind in year 25, even though he contributes the same amount. In year 35, he’s down $100k. In year 45, he’s down $200k. In year 55, he’s down $400k.

#199 Nora Lenderby on 10.13.15 at 1:39 pm

#185 Edward on 10.13.15 at 12:36 pm
Bank of Canada Governor Stephen Poloz says it’s not his job to stop people from making “bad choices.”

Good link. Seems short-sighted. Sort of like the pharma industry claiming that over prescription of opioids causing addictions and deaths isn’t their problem.

#200 Holy Crap Wheres The Tylenol on 10.13.15 at 1:42 pm

The best part about this whole election is the god dam desperation in the other parties message. Had some stop by this weekend to give me a piece of their mind. I all I got was the same old Vote for anything but Stephen Harper, Send Stephen Harper a message, Stop Harper, Stop Harperism, Its time for a new thinking, Anything but Harper, Save Canada from Stephen Harper……etc…etc…etc. What a sad, sad group of losers out there touting this shit. I don’t want to hear your anti Stephen Harper rhetoric. Your lame ass excuses are rather drawl you dingbat, wackos. When I asked what was your platform, where do you stand on the economy, all I got was a blank stare back and a “I hope we can count on your vote comment.” They never did answer my questions. So to sum I up “sure I’ll vote for your lame ass anything but Stephen Harper crap ideology cause I’m a blind follower.” Didn’t Hitlers followers blindly follow what he preached as the truth? However it was clear that his followers believed him and that his professed beliefs formed the major body of what they were taught.
Right guys, see you on voting day!

#201 Pamela Velos on 10.13.15 at 1:45 pm

” … when you commute it a portion can be taken as return-of-capital, which is not added to your taxable income, hopefully keeping you in a lower tax bracket” Huh? Translation please O master Garth

#202 Holy Crap Wheres The Tylenol on 10.13.15 at 1:48 pm

The choice is simple. You trust others, or you trust yourself. In the context of this election, that might translate into supporting a fat annual TFSA contribution limit which will accrue during your lifetime, or you vote for guys who say we need a stronger public pension plan instead. It’s sure not the only issue, but it touches the eleven million people who have already opened a TFSA. Over 90% have not maxed their plans, but they all have the ability to do so as they age, and to thus increase control over their own futures.

Also remember that whatever your corporate pension plan, income from a TFSA is taxless and non-reportable. In retirement it will not boost you into a new tax bracket (as will money from an RRSP), nor reduce CPP or OAS benefits.
____________________________________________
That was also a question I asked of the weekend doorknockers. Why do you want to eliminate the TFSA? No answer back. Huh, the truth hurts when your trying to eliminate a great tax option for the masses.

#203 Saskatchewanite on 10.13.15 at 1:51 pm

#174 CHERRY BLOSSOM
One has to consider that the money generated from a large TSFA from untaxed Interest and Dividends gets transferred to ones bank account and spent on food and gas and other stuff. So it is good. I have voted for Greens every election since I was 21, my first vote. I would dearly love to continue to vote for Elizabeth May but I will vote for a man I hate, Harper, because I want the $10,000 limit on my TSFA.

********************************************
How refreshing to hear someone mention Elizabeth May. I too have voted for her in years past but voted strategically this year for the TFSA & to ensure the Conservatives be held responsible for fixing their mistakes. IMHO, the most upright comments and educated analysis in recent elections, including this one, have been offered by Elizabeth May.

#204 Retired Boomer - WI on 10.13.15 at 1:59 pm

A bit too many smiling 45 year old guys who ‘can’t save anything’ on this blog.

I know few who earn a “high salary” >80K a year. Most are between 30K and 80K somewhere for BOTH working partners. A few do hit the 150’s.

Funny, but those who earn an average salary do a better savings rate than those who hit that 150K. Why? Perhaps because they KNOW they HAVE to, to finance retirement, help a kid let through college etc.

While yes, there are differences between the US and Canada, it is NOT that wildly different. The respective societies just screw their people slightly differently, but the effect is largely the same.

Don’t worry whether the TFSA is 5G or 10G. It is what the money is invested IN that makes the difference in 30 years. You can always use the RRSP to try and “offset” any change to TFSA.

I see too many in retirement with precious little in reserve beside the government old fart benefits. You do NOT live well merely on those numbers, exist yes, but not live in the manner this guy has grown to enjoy.

The choice dear dogs is entirely yours! The vote is your as well. The future is out of your hands as far as length of time, but totally yours in terms of quality of time.

May you get both length of time & quality of time. We never know what’s over the next hill, probably another hill.

Earnings season is here! I don’t expect to see many great reports, and more below par numbers. Easy come, easy go. I don’t expect the FED to move rates until 2016 sometime.

#205 fancy_pants on 10.13.15 at 2:11 pm

#191 Barrie Madu on 10.13.15 at 1:18 pm
How do you find out your unused contribution limits for your TSFA

create an account. http://www.cra-arc.gc.ca/myaccount/

check your unused room, and take note, I don’t think it records contributions you made earlier this calendar year (or withdrawls – although you only get that back the following year and by then CCRA has recorded and adjusted for that)

#206 saskatoon on 10.13.15 at 2:27 pm

daycare = child abuse

#207 Paul on 10.13.15 at 2:36 pm

#196 TRT on 10.13.15 at 1:34 pm

Can’t wait to see all the crying in this blog when Harper loses his majority.
————————————————————-
If that’s all you live for sad!

#208 Mark on 10.13.15 at 2:39 pm

“How do you find out your unused contribution limits for your TSFA”

Sign up for an account on the CRA website, and it will show you.

Low interest rates are better than high rates, if people use debt for consumption it is Their problem, and consumption debt Is exactly what the banks want.

Exactly. High rates are typically associated with negative after-tax real rates of return. “Be careful what you wish for” is something I’d say to those nostalgic for the days of much higher interest rates.

“Well, if his rate cuts continue (driving household debt higher) and the result is a further heating and a resultant burst of the Canadian housing market, it will become his problem.”

Credit-worthiness is now emerging as such an issue that rate cuts are unlikely to provoke an expansion of household debt to any level of significance. The housing bubble mostly stopped expanding over 2 years ago. Banks and highly solvent corporations will be the chief beneficiaries of rate cuts, but in the case of the former, they might not even benefit that much on account of needing to take higher reserves for loan losses and increases in the regulatory capital required to hold such positions.

#209 IHCTD9 on 10.13.15 at 2:50 pm

I work in Manufacturing

I live in Ontario

I am a saver.

I will be voting Harper.

I’ll need the withdrawable tax sheltered savings for when my most recent employer again goes bankrupt. I watch the Ontario Liberals stand on the sidelines blaming broke, insolvent Corporations for screwing their employees. I watch more and more Manufacturers leave. I watch the labour market shrink, wages shrivel, investment evaporate, all while our leadership gives the public sector raises and worries about sex ed.

If all of Canada was as bad as Ontario is now after McGuinty and Wynne, things would be so bad we’d take George W Bush out of retirement rather than another round of intense Liberal stupidity.

#210 Leo Trollstoy on 10.13.15 at 2:55 pm

I’m part of the 1%

I don’t care who’s in power.

All parties fight for our benefit.

Because they become our brethren.

#211 joblo on 10.13.15 at 3:10 pm

Another ditty bout Harpo for your listening pleasure.

https://youtu.be/y3C1SWVquXA

#212 Vundo on 10.13.15 at 3:10 pm

With respect to the TFSA limit for 2016: is it not the case, as when Joe Oliver announced the increase to 10k, that as soon as it is announced the new limit takes effect without the need to pass a budget with that change in it? So if the new government immediately, upon being sworn in, announces that the 2016 limit is $5500, doesn’t that prevent us from making that 10k deposit on Jan. 4?

No, an announcement is not a budgetary measure. — Garth

#213 Leo Trollstoy on 10.13.15 at 3:11 pm

#205 saskatoon on 10.13.15 at 2:27 pm
daycare = child abuse

I agree. Saskatoon sucks on many levels.

#214 BillyBob on 10.13.15 at 3:15 pm

#130 Ralph Cramdown on 10.13.15 at 12:19 am
#123 BillyBob — “it’s about ideology: would you rather have the government control your retirement funds, or control them yourself?”

How did we get to the point where some people think the “control it yourself” option is the one with a registered account, where the trustee reports every dollar deposited and withdrawn to the government?

———————————————————–

Registered or not, having gains from self-directed investments grow without being taxed gives far more control to the individual than simply hoping for the best with some government pension scheme. Surely that’s obvious?

I know of which I speak, I have not paid tax of any kind for the last ten years since moving to the UAE. Perhaps partly as a result of this, if I were a resident of Canada, I would certainly be voting for any party that offered tax relief on investment income, and against any that tried to take it away.

Government institutions have their place, but that doesn’t mean you should trust them blindly.

#215 jess on 10.13.15 at 3:15 pm

#13 Edward on 10.12.15 at 4:42 pm

so would say our youth need more math perhaaps should it be ethics ?
North Dakota’s Oil Boom Draws John Oliver’s Critical Eye

Leave it to a salty-tongued Brit in New York City to shed light on worker safety in North Dakota’s Bakken oil fields.

discounts on fines ?…. okay kids do the math.

http://thetyee.ca/Video/2015/10/13/John-Oliver-North-Dakota-Oil-Boom/

#216 pwn3d on 10.13.15 at 3:20 pm

#166 liberals or conservatives on 10.13.15 at 10:46 am

Its not like they don’t do this right now. They absolutely do. Its not going to change much when the 1% get taxed more in the future.

This is the fear argument that the 1% use to argue against higher taxes in their bracket.

The government has information on all of the people with incomes over 200K/yr. They will be the first ones to know who is using loopholes to pay less tax in the future and they can adjust accordingly (may be someone has some information on the parties platform regarding closing these loopholes).

At the end of the day, 5-10k more per year won’t impact the lives of people making 200k or more, and they will most likely not make radical changes because of the increases.

———————–

The government may have the numbers, but the numbers don’t add up. If nobody did anything they would raise about 2 billion extra tax with this. But as we have seen in every jurisdiction that raises taxes, people do not just pay up, they do things to prevent paying. Especially in a bracket higher than 50% which is what we’re proposing, in many provinces it would be closer to 55%. Even Mulcair understands this is a bad idea. People do not need to make radical changes, small changes will allow them to pay less taxes.

But even if you count best case scenario it isn’t enough to pay off the tax break for the rest.

#217 Mark in Guelph on 10.13.15 at 3:21 pm

There is no US recession now, next year or in the distance. — Garth

This is another of those “The Fed moves in ______” rebuttals. You’ll eat these words too soon enough Garth.

Read my lips. No US recession. — Garth

#218 Pete on 10.13.15 at 3:22 pm

#208 IHCTD9

Well said, my sentiments exactly!

#219 conan on 10.13.15 at 3:23 pm

#208 IHCTD9 on 10.13.15 at 2:50 pm

Wynn will drop the pension plan if Trudeau wins.
The Ontario Liberals are not related to the Fed Liberals.
You have an accurate eye on what is happening with the economy. It was hidden before by ample flesh but ,now a lot of people have been cut to the bone and it shows.

#220 jess on 10.13.15 at 3:27 pm

nora

first the mircle followed by addicts then the ban.

http://www.todayifoundout.com/index.php/2012/02/the-pharmaceutical-company-bayer-coined-the-name-heroin-and-marketed-the-drug-as-a-non-addictive-cough-medicine/

#221 pwn3d on 10.13.15 at 3:29 pm

Oh and I forgot to calculate that the 1% would also save the same 670.50 that everyone else would get, so in reality they will take in less than 2 billion.

One thing they didn’t mention is if it will be indexed, or if they will do the same nasty tax increase every year like the ontario liberals are doing at 150k.

#222 AB Boxster on 10.13.15 at 3:33 pm

Re: Preferred Share prices

I can understand why many preferred ETF’s (many of which contain rate reset preferred shares) or individual rate reset preferred shares, are much lower over the past year given the current low 5 year Gov of Can rate and the possibility of a much lower dividend upon reset.

However, why would regular individual perpetual preferred shares be lower as well?

For example, preferred shares of Power Financial Corp. have one of the highest DBRS ratings (pfd-1L) which is even higher than the Canadian big bank ratings (pfd-2H).

Yet Power Financial preferreds such as PWF.PR.S (which is a perpetual share and does not reset) is now selling at $20.62 a share.

This preferred (floated at 4.8) is thus now providing an annual dividend yield of 5.8%.

What gives?

#223 SeeB on 10.13.15 at 3:47 pm

Hi! I’ve been away for a while. A serious question: how much is appropriate to pay a fee-based advisor to help set up my portfolio? I live in Vancouver.

A fee-for-service guy (paid hourly) will design a portfolio but will not build it, manage or rebalance it. That typically costs $3,000 to $10,000. A fee-based advisor will do all of the above with no up-front cost, and should charge a management fee of 1% annually on the assets under administration. Less if a sizable amount. — Garth

#224 Nuff Said on 10.13.15 at 4:06 pm

Stephen Poloz…the Booby Prize Clown Prince of the Canadian economy states unequivocally that ‘low rates are not the cause of high home prices’…..BWAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA…..WHAT A BOOB…WHAT A JOKE…WHAT AN EMBARRASSMENT…..nuff said .

It’s sad really…that an unelected, uneducated, untrained bureaucrat can become BOC governor…..seriously…..shameful.

#225 Doug in London on 10.13.15 at 4:06 pm

But maybe they don’t want you to be free.
————————————————-
What? You think governments actually plan that far ahead? I wouldn’t bet more than 2 Nortel shares (now a penny stock) on it.

#226 Bottoms_Up on 10.13.15 at 4:15 pm

#205 saskatoon = joke

Child abuse is what happens when a parent willingly avoids getting their child vaccinated.

#227 Bottoms_Up on 10.13.15 at 4:18 pm

#200 Pamela Velos on 10.13.15 at 1:45 pm
————————————-
Basically a portion of the pension amount you get tax free. The remaining needs to be shelted to avoid tax such as putting it into your RRSP.

#228 Mark on 10.13.15 at 4:25 pm

“However, why would regular individual perpetual preferred shares be lower as well?”

In the case of the banks (and financials like PWF), preferred shares are used to provide leverage to the common. Just looking at the P/E ratio of PWF, it appears to be under 10, implying a return of slightly over 10%/year before growth.

At some point, distress in the common makes its way into distressed pricing in the preferreds, and eventually, even into pricing on the debt that is contained within the firm’s capital structure.

Whether its rational or not, that’s anyone’s guess. I personally don’t think the Canadian economy and the Canadian banking sector is going to fall off the cliff anytime in the future. But obviously that seems to be the sentiment of much of the investment community towards Canadian financial sector shares. Hence, it may be a great buying opportunity.

Many non-real estate assets in Canada’s economy are selling at some seriously distressed prices, dramatically below replacement cost or even stated book value. This is an artifact of so much speculative enthusiasm being vested in the housing market and the fixed income investments that have propped up its supporting debt bubble. Opportunities for wise contrarian investors have likely almost never been greater!

#229 Ralph Cramdown on 10.13.15 at 4:44 pm

#213 BillyBob — “Registered or not, having gains from self-directed investments grow without being taxed gives far more control to the individual than simply hoping for the best with some government pension scheme. Surely that’s obvious?”

Of course.

But we know what happens when we give individuals more control over their retirement savings.
a) most of them underperform well run pension plans, for a variety of reasons
b) many don’t save enough, or, because of a) end up with not enough
c) because our society doesn’t like to see seniors starving, we create senior welfare programs
d) the seniors that saved enough say it isn’t fair that their taxes pay for those that didn’t
e) the welfare gets extended to more seniors, along with other tax breaks
f) but that still doesn’t shut them up
g) young people with fewer assets end up paying higher taxes to support (or reduce the taxes) of older people with more assets

None of the above is speculation; it’s a description of history. So it isn’t hard to figure out how things won’t be different going forward. These are the problems that pensions were designed to solve. And we want to make the same mistakes all over again?

Corporate pensions are dying. Get used to it. — Garth

#230 Nora Lenderby on 10.13.15 at 4:53 pm

#205 saskatoon on 10.13.15 at 2:27 pm
daycare = child abuse

You may have some experience or anecdotes of something bad happening – if so, I urge you to report it to the police.

Or you may just be being your charming self. Daycare is useful for all kinds of reasons and children usually end up better for having it.

#231 GB on 10.13.15 at 4:58 pm

Adam post #131 said:

And to the 45 year old guy who can’t manage to save $5.5K a year with 2 daughters and too many wobby pops, TRY HARDER! How much do you spend on wobby pops a year? I bet you can make some cuts in your budget and meet a measly $5.5k savings. You probably spend $5k a year on silly things like cable, a ridiculous cell phone plan, wobbly pops and a gym membership you don’t use often enough.

Okay Adam,

First off…you sound angry.

Secondly, I can and do save 5.5K per year in a TFSA. Your apparent anger may have clouded your ability to read.

I said that few (less than 1%) are able to happen to have an extra 5 K on top of that.

I don’t have a cell phone. I see no use.

Wobbly pops? I go out every Thursday with the boys and have one Rickards red.

I am a real person here…with a better grip than most on finances (I wonder…do you write down ever single dollar you spend every day…I do).

The simple fact is for an average family raising kids today, Garth’s perception that only twits can’t find the extra 10K (both adults) per year is shockingly naïve.

Suggest you settle your emotions here and re-evaluate your personal situation and see if you are actually providing real insight. Are you an average income earner? Do you have a family (kids?), have you NOT inherited some extra cash etc etc?

I am more than confident in my calculus here. How about you?

#232 L.I. on 10.13.15 at 5:34 pm

Check with HR. Many plans allow you to commute at 55, but you certainly do not have to quit. — Garth

Garth,

Thanks for the reply. I checked with HR and my plan doesn’t.

The lady explained to me that participation is mandatory as long as I am an employee. The plan does not offer a choice of commuted value to retirees. As early retirement can start at 55, commuting is only allowed when quitting before 55 (or for the spouse portion in case of a divorce before retirement).

#233 liberals or conservatives on 10.13.15 at 7:14 pm

#215

“But as we have seen in every jurisdiction that raises taxes, people do not just pay up, they do things to prevent paying.”

What I didn’t make clear enough in my comments is that the people who are making over 200k are most likely already doing everything they can to avoid taxes, within their situation. Not everyone can incorporate to work for a company, some people are hired as individuals making over 200k, as CEO’s etc. I don’t know the whole scope of the situation, but the government definitely does with the tax returns and can do its own analysis. Based on this a government that is in power can make further policies to achieve its means.

In the case of the liberals its making the higher tax bracket contribute more than the middle bracket. For the conservatives its the status quo.

At the end of the day we are voting for a party with the best ideals that suit us as individuals. Their policies will not all be perfect as in taxing the upper bracket, and its effectiveness. But if you believe in what they are trying to achieve then you should vote for them.

Its a 4 year term. If the party doesn’t produce in the 4 years what they promised and what you were expecting, then there is always another election in 4 years.

#234 Daisy Mae on 10.13.15 at 8:20 pm

#176: “In case you haven’t notice you are going are forever! Especially about someone you don’t know.”

****************

And, you do?

#235 Daisy Mae on 10.13.15 at 8:25 pm

#196: “Can’t wait to see all the crying in this blog when Harper loses his majority.”

***************

Majority — 35%?

#236 bag Lady on 10.13.15 at 9:23 pm

DELETED (anti-Muslim)

#237 bag Lady on 10.13.15 at 9:50 pm

DELETED

#238 Popeye the Sailor Man on 10.14.15 at 11:48 am

#150 Bottoms_Up on 10.13.15 at 7:37 am
…While i agree commuting a pension can make sense in order to ensure an asset is there for the kids, i think itbis reckless to promote people in their 40s to do this…
___________________________

Sorry for the late reply, I was at sea and wrapping up a trip.

If you read carefully I promoted to call and find out what your transfer Value is and discuss this with your spouse. Everyone situation is different but a person should know all the info. The reason before age 50 is that this option is lost once you turn 50 in the federal service (old rules). For me the amount was far greater option if left invested until I would need it even at a 5% rate of return. I happen to be employed at a job in high demand and with a shortage a skilled workers. So I was able to Quit, transfer the money and get rehired with only missing one pay check. I could have also gave up the marine job for good, and worked as a Power Engineer in Alberta which was PLAN A but for age 49 ½ . But the amount ballooned so much with the rate cuts and poor economic assumptions right now the math came out in favor of doing it at 47 ½ because I could end up with even less in 2018 if rates go up .75%-1% which is very likely. So Plan B developed; quit, transfer out, get rehired work 6 years (Min.) have another small pension of 8-9K with benefits. Then decide to work part time or seek another employer maybe the oil industry will have picked up by then.

The main point is find out your transfer value, do some math and thinking, the economic assumptions are poor according to the actuaries, and if the BOC drops rates by another .25% it could be like winning the lottery or taking a sweet buyout package but with the advantage of possibly returning back to the employer one week later as casual until the transfer is complete.