The finale

Once upon a time my father was a high school principal. He always drove white Buicks, had a legendary moustache and eventually made $10,000 a year. Huge deal or, as a child, I would not have been informed of the achievement. In the early 1950s my parents bought a house in the Toronto burbs – two stories, deep lot, garage, leafy street – for $18,000. Big mortgage. Fourteen grand. They took in a boarder to help pay it.

Anyway, as an educator he had a pension. The majority of employed people did back in 1957, but benefits were small. On my birthday in that year the federal finance minister, Walter Harris, delivered a budget speech which created a shiny new thing – the RRSP. A few months later the government of Louis St. Laurent was punted by voters in favour of the populist, Canada-first firebrand John Diefenbaker. Dief, in his wisdom, kept the retirement thingy, which at that time let people shelter $2,500 a year, or 10% of their income.

Blah, blah, history, blah, blah. I get it. But here’s the key point: retiring somewhere other than under a bridge has always (since 1957) been built on three pillars. A small public pension. A corporate pension. And your own savings – made easier by the RRSP.

These days 70% of people have no corporate pension. None. Zilch. For many who do it comes in the form of a half-baked, low-energy group RRSP stuffed into the lifeless mutual funds of a moribund, no-pulse insurer with a peppy logo. The public pension plan is anemic, at an average of $7,500 per year, plus another seven grand in OAS when you hit geezer status. And RRSP contributions have dropped off a cliff particularly among millennials many of whom – with the attention span of tropical fish – prefer TFSAs. For them retirement is not only in the remote, hazy future, but likely impossible given a gig economy. Besides, they can raid a tax-free account at any time.

Yes, this is the third and final time for an entire year that this pathetic blog will focus on RRSPs. They have become maligned, misunderstood and unsexy over the past decade with our accumulated room growing wildly. Canadians are paying hundreds of millions a year in income taxes that could be deferred for most of a lifetime while failing to reap the benefit of tax-free growth.

Why?

Sure, TFSAs have sucked off a lot of the investing energy but the real reason is property. My old man spent less than 2x salary to buy a detached house in a demand area. Today the same house is valued at $2 million and the average high school principal earns $120,000. Do the math.

For the record, the deadline for making a contribution (to get a 2018 tax break) is next Friday. You can contribute up to 18% of your income, to a max of just over $26,000. Look on your 2017 Notice of Assessment to see the room you have available from all past years. The contribution can be deducted from taxable income, so the more money earned (and the higher the tax bracket) the bigger the refund or tax reduction.

As mentioned here, a spousal plan will help split income within your family or finance a mat leave. A contribution in kind lets you use existing assets to contribute. An RRSP loan actually creates money out of nothing when you use the refund to repay it. You can use an RRSP to reduce the withholding taxes on your paycheque. Money taken from an RRSP for a house down payment is tax-free, but must be paid back. Money taken from an RRSP to pay an advisor’s fee is tax-free and does not need to be repaid. You can borrow from your plan for schooling – also repayable and triggering no tax. Your house mortgage can be put into an RRSP, so you make payments to yourself. Money can stay growing in an RRSP until age 71 when it’s converted into a RRIF – also a tax shelter, but with tiny annual withdrawals. However both an RRSP or RRIF can yield tax-free payments if melted down carefully. In short, this is a complex, flexible, modern vehicle for tax avoidance, tax deferral and tax-free growth which just gets better the more money you make.

Even if you never plan on retiring, this allows tax to be shifted from a year in which income is good to one in which life sucks or you decide to do nothing. As mentioned the other day, it also shields your wealth from creditors – something a TFSA can’t do.

So only a few more days. Use it, lose it. Your choice.

 

109 comments ↓

#1 Penny Henny on 02.19.19 at 4:59 pm

I think the biker to the left has a nitrous kit

#2 Chanchito Panchito on 02.19.19 at 5:05 pm

Is interest paid on a loan used to fund an RRSP tax deductible?

Nope. – Garth

#3 Danforth on 02.19.19 at 5:06 pm

Hi Garth
Two Questions

1) You wrote:
You can contribute up to 18% of your income, to a max of just over $26,000.

I understood that you can contribute and deduct any amount, so long as you have the accumulated room from past years plus current year.

That 26K number is really the maximum amount your room grows per year. But it isn’t the max you can contribute, or apply as a deduction, in a taxation year.

Is that correct?

2)
I roughly understand that if planning a retirement without a pension, your nest egg is best set-up as a blend of RRSP and TFSA/Unregistered (as opposed to being all RRSP). This way you can keep your taxable income lower in retirement years.

If planning a retirement fund of about 1.3M, with no employer pension, what would be a the ideal blend of RRSP/TFSA/Unregistered holdings ?

Tx!

(1) Correct. Contribute all you want, claim it against income to your benefit according to annual income. (2) Need to know you to answer. – Garth

#4 Hans on 02.19.19 at 5:12 pm

Given that the government is running serial deficits and the debt load continues to grow….would it be safe to assume that future tax rates are likely to increase? This has been my only real problem with RRSPs as a savings vehicle. The assumption is that you will be able to pull the money out at some time in the future at a lower tax bracket than when you contribute it. Sudden unemployment or underemployment, a long vacation, etc…..I guess that’s where it would make sense. But for anyone with a pension coming (yes, I understand that this is a shrinking portion of the work force), the RRSP will likely hurt you more than help you.

Out of curiosity….how are RRSPs treated in the event of a death?

#5 lifexprt on 02.19.19 at 5:16 pm

RRPS Question

Can you pull an amount out of your self directed RRSP account and put back exactly the same amount within the same year? The idea is to use the funds elsewhere for the year and not suffer any tax consequences.

No. Withdrawals are taxed in the year of withdrawal according to your income in that period. Once used, the room’s gone. Unlike with a TFSA it does not restore the following year. – Garth

#6 bdwy sktrn on 02.19.19 at 5:16 pm

BC NDP likes the prospects for 604 RE.
from the budget , just released…
——————————————-

However, the government does not necessarily think lower construction and sales will translate into lower prices for housing.

“The average home sale price in B.C. is expected to increase moderately over the forecast horizon,” read the budget

https://vancouversun.com/news/local-news/live-b-c-budget-2019-government-offers-only-modest-new-spending

#7 Rowland Haggart on 02.19.19 at 5:29 pm

Garth, Why do they call it a tax free saving account if you say it’s for investing? A simple name change could really influence people to invest for their future instead of saving for new linoleum and countertops.

#8 Different Picture? on 02.19.19 at 5:33 pm

Can we get a different picture?

The HA is a criminal organization, and its members are responsible for a lot of death an pain.

Can’t we go back to cute pictures of puppies and toddlers?

#9 Unhinged Trader on 02.19.19 at 5:45 pm

The only solution is to invest in innovative assets that promise growth beyond the relative performance derby of equities and ETFs.

Everyone should be holding a mix of Ethereum and Bitcoin, which BTW, are in the process of being cleared for public fund managers to park money.

#10 BlogDog123 on 02.19.19 at 5:55 pm

And if you haven’t done it already, fill out that T1213 form every year and give the response letter to your payroll rep at work. If there’s a postal strike you can even fax the form to the tax office in the November before the new year to have your January paycheques adjusted properly. Just like the infomercial: “It’s my money and I want it now!” Bigger paycheques now, smaller refund.

From google: “In case you didn’t know, the T1213 (entitled “Request to Reduce Tax Deductions at Source for Tax Year”) is a form from the Canada Revenue Agency that lets you take back the interest-free loan to the government you give them every time you get a huge honkin’ tax return.”

#11 George on 02.19.19 at 6:01 pm

#6 Are you serious??

Prices of housing are plummeting across BC!!

#12 espressobob on 02.19.19 at 6:02 pm

The TFSA should be a TFIA. That is a Tax free investing account. This seems to be a well kept secret for some reason. Why would anyone use it for GICs or cash storage? Not much upside doing things that way.

Free dough and no requirement to report to the CRA. This is a no brainer.

#13 For those about to flop... on 02.19.19 at 6:03 pm

Race to a million.

This detached in Vancouver is following a similar trajectory to the house I showed you on Manor street in Burnaby a couple of days ago.

Different jurisdictions, same result.

Both houses started of at 1.24 and now these guys have slowly drifted down to 1.07.

The one in Burnaby just took the next step and went below a million at 988k.

The details…

3665 Monmouth Ave,Vancouver.

Originally asking 1.24

Now asking 1.07

Assessment 1.21

So both the houses mentioned in this post are among the cheapest options in their respective cities and they have been on the market over 200 days trying to find where the bottom is currently at.

The bottom in Vancouver is below 900k for a liveable place in East Van.

Not saying this place will sell for that.

Westside of Vancouver, the bottom sits at 1.5m

In Burnaby, as in North Vancouver the resistance band is a little tighter and the bottom sits at one million at this stage.

Richmond is in the middle, with the bottom of the detached market around 950k.

People are hesitant to rush in, because they know it will be cheaper in a couple of months.

The market is on mothballs…

M44BC

Feb 15, 2019 $1,075,000 Price Reduced

Nov 30, 2018 $1,149,000 Price Reduced

Sep 28, 2018 $1,199,900 Price Reduced

Jul 13, 2018 $1,249,000.

https://www.rew.ca/insights/170371/3665-monmouth-avenue-vancouver-bc

https://www.zolo.ca/vancouver-real-estate/3665-monmouth-avenue

#14 JSS on 02.19.19 at 6:06 pm

A house bought in the early 1950’s in Toronto for $18K, and is now worth around $2M today, represents around a 7% compound rate of return. Similar return on average as the TSX. But of course, the house doesn’t have the ability to shelter or defer tax, such as using an RRSP or TFSA.
Interesting…

#15 Yukon Elvis on 02.19.19 at 6:21 pm

I miss the days when the leader of the country and the village idiot were two different people.

#16 TheDood on 02.19.19 at 6:25 pm

#6 bdwy sktrn on 02.19.19 at 5:16 pm
BC NDP likes the prospects for 604 RE.
from the budget , just released…
——————————————-

However, the government does not necessarily think lower construction and sales will translate into lower prices for housing.

“The average home sale price in B.C. is expected to increase moderately over the forecast horizon,” read the budget

https://vancouversun.com/news/local-news/live-b-c-budget-2019-government-offers-only-modest-new-spending

_____________________________________

“….the government does not necessarily think…..” – I don’t think you need to read much further past these words. There is not one current Canadian Politician (Federal, Provincial, doesn’t matter) qualified to run a lemonade stand, never mind comment on the direction of real estate pricing.

If you’re hoping prices will maintain current level in the face of falling sales, increasing rates, stress test, and increasing household debt, then I wish you well.

#17 BillM on 02.19.19 at 6:42 pm

No doubt RRSPs are a good thing … but
Putting money into an RRSP when you are paying little or no tax can mean paying at a higher tax rate when with drawing. But it has the benefit of growing over the years.
At least you still have the funds that might have been blown on whatever. It can also can be a rainy day fund, job loss or other (real) emergency.
You are less likely to draw down RRSP funds than unregistered investments for that toy you really can live without.
As a RRSP or RRIF is treated as normal income, no dividend tax credit and no capital loss deduction against capital gain.
Too big a RRIF is also a problem (many would like to have). You should plan on drawing down the plan in retirement to minimize the taxes on it. Drawing the minimum required is not always the best idea, depends on how big it is. You can always bank (invest) the excess you draw down outside the RRIF.
Of course you usually have no idea how long you will live
The other issue is OAS clawback, another problem but a problem most with average income will not have.
When you and your spouse (that the RRIF will be transferred to) eventually die, a large fund with say $400,000 still in it will be taxed as a lump at something like 50%. But that is a issue for your heirs.
But considering you saved these funds for YOUR retirement would you not want to enjoy it yourself rather than see so much of it go to taxes.
Just my observation but I say max it out and watch it grow. You will be glad you did when you get old ….

#18 espressobob on 02.19.19 at 6:50 pm

Bitcoin and Ethereum,

Commodities tend to cycle over time and it seems reasonable to invest accordingly. A tulip farm might prove to be a stellar outperformer for this very reason. Not sure why exactly?

I’m not the sharpest knife in the drawer anyways and consequentially should stick with a time proven wealth building portfolio of corporations and bond/prefs for no other reason. My loss?

#19 theoryAndPractice on 02.19.19 at 6:56 pm

” Today the same house is valued at $2 million and the average high school principal earns $120,000. Do the math.”- GT

—–
I did, x16.6 times of the salary.

So ,

What are the % of total population can buy this house for 2 mil?

2mil purchase price: 8.3K monthly mortgage payment for 1.6mil after 400K down payment. Omit even land transfer and legal expenses.

1%’ers as defined here let’s choose min(conservative) level of 250K approximate to be in %1.

https://www.theglobeandmail.com/news/canada-1-per-cent-highest-paid-workers-compare/article36383159/

and
https://www.huffingtonpost.ca/2018/03/14/top-one-per-cent-canada_a_23385825/

Well how a Canadian bank would pre-approve mortgage for example TD with below calculator

https://tools.td.com/mortgage-affordability-calculator/

Now 400 down 250K annual income with no debt, no monthly payment, no expense, one can get approved for 1.25mil with above calc (including 400K down payment) max.

So, 750K is still missing for %1’er. (and 99% is already discarded)

Then, the million dollar question is ‘who is buying?’

#20 AGuyInVancouver on 02.19.19 at 6:58 pm

“..Sure, TFSAs have sucked off a lot of the investing energy but the real reason is property. My old man spent less than 2x salary to buy a detached house in a demand area. Today the same house is valued at $2 million and the average high school principal earns $120,000. Do the math…”
_ _ _
Why has there been nothing written, academically or otherwise, on why this huge increase in property prices has occurred? What’s driving it?

#21 VanLoserRenter on 02.19.19 at 7:00 pm

#8 Different Picture? on 02.19.19 at 5:33 pm
Can we get a different picture?

The HA is a criminal organization, and its members are responsible for a lot of death an pain.
—-

Totally agree. Why give these murderous creeps any oxygen.

There’s nothing cute about beating an unarmed man to death on a street corner in broad daylight over a petty dispute.

http://www.kelownadailycourier.ca/news/article_ca2a16a2-d5a1-11e3-a983-0017a43b2370.html

#22 Phylis on 02.19.19 at 7:00 pm

a comment on rrsp over-contribution advantages/perils might be of interest. $2000.

#23 Not sure on 02.19.19 at 7:01 pm

Not sure but can a Corp in which you are sole director/ owner / whatever also shield you from creditors after you personally ?

#24 Yellow Vest on 02.19.19 at 7:11 pm

Fast forward to 2019. The civil service is BANKRUPTING Canada with their million dollar pensions.

Vive la résistance!

#25 Easter Bunnies of Odin on 02.19.19 at 7:14 pm

Huge deal or, as a child, I would not have been informed of the achievement. In the early 1950s my parents bought a house in the Toronto burbs – two stories, deep lot, garage, leafy street – for $18,000.

What the feline?! $18,000 doesn’t even pay for a year’s worth of rent in Toronto for a student!

#26 mike from mtl on 02.19.19 at 7:20 pm

Again keep slag RRSP but unless you’re totally aware of all the (current) rules on contribution and withdrawals, I’d guess in most cases it’s better going with TFSA and non-reg.

Filling RSP with GICs and lousy mutuals making at best 2% then pay full income tax on exit makes no sense. RRSP are good containers for the mutual fund hockers because they’ll never explain all the details like how their active funds constantly get hit with churning cap gains, what goes into melting it down, and how inefficient it is.

RSP has its place for sure but really given a bit of knowledge there’s better options now – this isn’t the 80s.

#27 Barb on 02.19.19 at 7:25 pm

Comrade Horgan just eliminated interest on student loans in B.C.

https://www.beachradiovernon.ca/2019/02/19/okanagan-student-unions-thrilled-over-governments-decision-to-eliminate-loan-interest/

Now the kids can have money for their RRSPs.

#28 Terry on 02.19.19 at 7:28 pm

“But here’s the key point: retiring somewhere than under a bridge has always (since 1957) been built on three pillars. A small public pension. A corporate pension. And your own savings – made easier by the RRSP.”

It’s safe to say that if you are in your mid to late forty’s after working about 20 years making good money and you don’t have a corporate pension or at least $500,000 in RRSP’s and other savings then you are out of time. Your ship has sailed. You won’t have enough time left to get those larger amounts to double a few more times to have enough to comfortably retire on. You have to get to the bigger capital amounts early enough in life for the doubling to work for you. When the time to save is gone………….it’s gone……..and so is your ability to ever retire.

#29 For those about to flop... on 02.19.19 at 7:28 pm

Pink Snow falling in West Vancouver.

Just like the house on John street in Vancouver, these guys might be regretting their decision to go with an artists rendering instead of the tried and true photo of the front of the house.

The exterior of the house looks quite respectable for its age, and the block looks like a park.

The details…

102 Deep Dene Rd,West Vancouver.

Paid 2.22 December 2015

Originally asking 3.38

Now asking 2.29

Assessment 2.43 down from 2.88

There are people in way worse predicaments in West Vancouver, but these guys could be on their way to a Deep,Dark place…

M44BC

https://www.zolo.ca/west-vancouver-real-estate/102-deep-dene-road

https://www.rew.ca/insights/60011/102-deep-dene-road-west-vancouver-bc

#30 Advisor fees on 02.19.19 at 7:30 pm

> Money taken from an RRSP to pay an
> advisor’s fee is tax-free and does not
> need to be repaid

That’s the first time I hear about this. What kind of advisors, and what particular kind of work by them, qualify for this?

The sexy kind. – Garth

#31 What do I think I know about this? on 02.19.19 at 7:31 pm

If you’re young, the best strategy for financial security in old age, is to buy as many rental units as you can. They will increase massively in value given enough time. Then, when you are retired, you can sell them or live off the rent. This is a foolproof strategy.

#32 MF on 02.19.19 at 7:34 pm

I’m definitely thinking about making my first RRSP contribution this week. I’m one of those millennials Garth mentioned in today’s post who prefers the TFSA and who generally thought of RRSP’s as anachronistic. However my income keeps creeping up slightly and I am starting to get hit with bigger tax bills. Something needs to be done.

Garth might have missed one other reason why RRSP are being shunned: the life cycle and age. Most of us have post secondary education and debt. By the time you are finally making money and saving you are most likely around 30 and thinking about upcoming large purchases related to the life cycle (real estate, businesses, marriage etc.). The idea that money contributed will be stuck in there, with consequences of its withdrawal, makes me feel uncomfortable. I guess I’m not alone in thinking that. I’ll try to focus on the benefits.

MF

#33 crowdedelevatorfartz on 02.19.19 at 7:43 pm

@#8 Different Pic.
“Can’t we go back to cute pictures of puppies and toddlers?”
+++++

Puppies can grow up to be attack dogs and all Hell’s Angels were once cute toddlers…….

#34 Boomer Bill on 02.19.19 at 7:57 pm

#14 JSS

That house, if it is a principal residence, compounded a tax free 7% which is an excellent return. Stocks gains are taxable…

#35 Smoking Man on 02.19.19 at 8:01 pm

A good chuck of the 70% boomers who don’t have pensions have all there loot in their homes. Their going to list at the same time. And judging by what’s on the MLS the time is now. With my epic skill at calling major market moves over the years. Why do you not sell spring of 2017.
Garth knew it peeked.

I hated leaving Canada but T2 despite all the shit he’s into will win again because conservative vote will be split.

And then those of you who stuck around will see true communism and wealth confescation.

#36 NoName on 02.19.19 at 8:06 pm

This one is funny.

https://imgur.com/6m8nm1D

#37 april on 02.19.19 at 8:21 pm

#6- Take that housing statement with a grain of salt….

#38 Bob Dog on 02.19.19 at 8:28 pm

When housing goes from 3X family income to 14x family income it’s time to start hanging lawmakers and politicians.

Canada has been enslaved to banks with the full concent of the government that is supposed to represent us.

#39 expat on 02.19.19 at 8:39 pm

This is why you thought you were socialist. You have been brainwashed.

CBS insider tells all….

https://www.zerohedge.com/news/2019-02-19/cbs-news-chief-policital-correspondent-breaks-ranks-admits-journalists-are-now

Wag the Dog folks. All along you thought the news was balanced and lo and behold – watch CBC’s coverage of the Turdgate. They literally are trying to chnage the narrative you watch to one of – so what….

#40 expat on 02.19.19 at 8:53 pm

Real estate is a dead investment that can be very hard to move quickly in bad markets. (Besides the fact that the bubble has burst and the millions who should have sold – didn’t)

We now have most wealth in Canada tied up in an illiquid asset that is shrinking in value and real estate tax revenues from it are collapsing. Public sectors are feeling the pain in loss of revenue.

The future should require to consider liquid assets that can be moved quickly….

As socialism pushes to the the extremes. They start running out of whacky things to tax and then it happens…

They start looking at you like a zombie looking for brains to eat. And you are stuck in a house you can’t sell to retire away from the zombie madness

If 85% of Canada is brainwashed to be socialist from socialist newspapers and media and there are no wealthy left to tax because they have all left the country….

Who do they go after?

You….

Some will be more equal than others – said the little piggy… You better hope you are one of them

#41 dakkie on 02.19.19 at 8:56 pm

London Housing Meltdown: “If you are looking to buy a house in Q1 you will have the market to yourself.”

https://www.investmentwatchblog.com/london-housing-meltdown-if-you-are-looking-to-buy-a-house-in-q1-you-will-have-the-market-to-yourself/

#42 Jason on 02.19.19 at 9:07 pm

Garth,

Taxes on investments gains inside an RRSP aren’t deferred, they are avoided entirely, just the same as a TFSA.

The RRSP has another feature of a tax refund, which is in essence a loan from the CRA which grows at the rate of return on the RRSP. The eventual repayment of said loan is hopefully reduced in principal by a lower marginal tax rate. It is important not to confuse this as a federal of tax because it isn’t.

#43 Chaddywack on 02.19.19 at 9:11 pm

Does anyone know if there is any advantage to paying back the HBP earlier than scheduled?

Further, anyone see a point to the HBP?

Seems like a small amount that is fairly inconvenient to have to pay back.

#44 Barb on 02.19.19 at 9:19 pm

#20 AGuyInVancouver on 02.19.19 at 6:58 pm

Why has there been nothing written, academically or otherwise, on why this huge increase in property prices has occurred? What’s driving it?
——————————————

It occurred after 40 years.
Not 40 weeks, as young folk want.

#45 Hells Angel Coquitlam Chapter on 02.19.19 at 9:28 pm

You can contribute up to 18% of your income, to a max of just over $26,000. Look on your 2017 Notice of Assessment to see the room you have available from all past years?

Mine says 32,000 on the Notice. I have the means to max out lump sum payment into RRSP. Why can’t I max 32,000 out if that is what my contribution room is?

Occupation: Laundry Machine Operator.

#46 TurnerNation on 02.19.19 at 9:28 pm

Picture says it all. It represents a patriot flag-bearing taxpayer on the left, and the taxman on the right bearing his own patch of money.

#47 Danforth on 02.19.19 at 9:32 pm

#38 Bob Dog on 02.19.19 at 8:28 pm
When housing goes from 3X family income to 14x family income it’s time to start hanging lawmakers and politicians.

Garth, I know you audit and delete aggressively to maintain sanity in the comments… appears this threat of violence against our elected leaders slipped through.

Perhaps give that comment (and the poster) the heave-ho!?

I left it, perhaps in error, to underscore how we love to blame others for the consequences of our own actions. – Garth

#48 Vampire Studies on 02.19.19 at 9:35 pm

5 lifexprt – Garth has to be quick with responses and he probably could have used a few more details of your
particular situation

If the withdrawal is within you contribution limit, then I would say you can do it. It is added to your income, then the re-contribution would reduce that income
back to the original level ie no additional tax. I’m sure
there is an amount withheld for tax though, and you
would lose that contribution room, so I think the
question is why would you do this?

30 Advisor fees – I had to think about this one. If you pull money out of RRSP then it is taxable like income, but the money paid to the advisor can be declared, so no net tax is paid.

On advisor fees from an RRSP – they normally come out monthly and are not considered income. So, no tax payable on money you got a tax break to invest. In other words the government pays a hunk of those fees for you. – Garth

#49 Mdq on 02.19.19 at 9:37 pm

Hi Garth

I was wondering if you or one of your financial smarty pants could explain to me why preferreds have decreased 20% in price in the last 6 months. I was under the impression that reset preferreds were not so directly correlated to interest rates changes. They are still yielding 5%, I liked them 6 months ago… I like them more now but I was curious to hear your thoughts.

Thanks

#50 Swiss Gold Vault on 02.19.19 at 9:39 pm

1950s my parents bought a house in the Toronto burbs at 140% debt to income.

2019 – on the same teacher income is 2,352% debt to income.

That is 36% growth averaged out year over year for 69 straight years.

Housing dictates government financial policy, welcomes the international drug trade money and is pumped in sync with money printing.

Let’s face it. All money finds a home. If you build it, they (with money) will come.

Ghost city, Trudeau real life.

#51 lifexprt on 02.19.19 at 10:02 pm

Can you pull an amount out of your self directed RRSP account and put back exactly the same amount within the same year? The idea is to use the funds elsewhere for the year and not suffer any tax consequences.

No. Withdrawals are taxed in the year of withdrawal according to your income in that period. Once used, the room’s gone. Unlike with a TFSA it does not restore the following year. – Garth

Coming back to this, hypothetical scenario.

Pulling out 100k from RRSPs in calendar 2019 in order to build an addition on the house, intention is to refinance and pay this back before March 1, 2020, if there is sufficient carry over contribution room from prior years would this not offset any taxes payable for calendar 2019?

#52 tdshredder on 02.19.19 at 10:07 pm

Garth

RRSP – what happens if you hold a mortgage inside a RRSP when you have to roll it over when you turn 71 (?)

#53 Raj on 02.19.19 at 10:09 pm

I didn’t get .. “Your house mortgage can be put into an RRSP, so you make payments to yourself.“ .. can someone please explain or point me to some details on this.. thx!

#54 Edmguy on 02.19.19 at 10:13 pm

One comment you made I hadn’t thought about before:
“Money taken from an RRSP to pay an advisor’s fee is tax-free and does not need to be repaid”

I have always had my advisor take all of the fees from my unregistered account. The thinking being that it was best to keep as much as possible in my TFSA and RRSP. I think I am still right on the TFSA but should I rethink the RRSP? I originally thought it was better to have more money in there, but maybe I should be thinking about pulling money out. Thoughts?

#55 MF on 02.19.19 at 10:18 pm

#40 expat on 02

-They say 73.6% of all statistics are made up.

For this “expat” poster, it’s more like 100%.

“85% of Canadians are socialist”…laughable comment.

I guess these types of posts showcase the negatives of social media, where forums and platforms can become echo chambers. Rumours and fake statistics can spread and become normalized, even though reality is far different.

“85% of Canadians are socialist”. Just unbelievable.

MF

#56 David Driven on 02.19.19 at 10:23 pm

You can bet that Trudeau has TFSA/RRSP confiscation in his sights. As a lickspittle of UN boondoggles like Africa 2060, he is told what to do with Canadians money and as everyone sees he’s giving billions every year to list causes and dictators. Wasn’t it proven that under McGuinty and Wynne that Butts was responsible for sending billions into the hellfire of Liberal Socialist He hasn’t resigned folks, not by a long shot. He’s being directed to another office in the PMO by his American handlers. Did anyone see David Axelrods resignation letter? He handles Trudeau for the Rockefellers, Clintons and Soros Foundations. Trudeau isn’t in charge….they are!!

https://business.financialpost.com/investing/cibc-sees-canadian-dollar-falling-to-15-year-lows-on-weak-exports

Now we see that Trudeau and Poloz will fall back on currency manipulation, not just to keep the recession denial charade in place but to further anger President Trump into accuse Canada of dumping….as a lead up to the 2020 election, a play for media sympathy and more finger pointing.

Did Butts resign? Did Rasputin ? Will Trudeau flood the ballot boxes with fast tracked voters? Of course. Because that’s exactly how the Democrats put illegals into the polling booth during Obamas underhanded campaigns. Think it’s silly business to temporarily swell the populations of small urban ridings with fast tracked votes. It’s because people like Obama then Clinton through evil manipulators like Soros and David Axelrod are using focused democracy busting techniques to take down Canada’s rural ridings with manipulating temporary populations. Smarten up people.

#57 AFD on 02.19.19 at 10:29 pm

“…Too big a RRIF is also a problem (many would like to have)…..”

Wait…what? I’ve seen comments about large RRSPs and RRIFs and being a problem. Why is this a problem? If it is, what’s too big?

#58 Remembrancer on 02.19.19 at 10:30 pm

#45 Hells Angel Coquitlam Chapter on 02.19.19 at 9:28 pm
You can contribute up to 18% of your income, to a max of just over $26,000. Look on your 2017 Notice of Assessment to see the room you have available from all past years?

Mine says 32,000 on the Notice. I have the means to max out lump sum payment into RRSP. Why can’t I max 32,000 out if that is what my contribution room is?

Occupation: Laundry Machine Operator.
————————————————————
$32,000 on notice means you have been under contributing previously. You can use all of that in one shot or balance out a couple of years, depending on how many tax brackets you want to drop. Another way to look at this is if you don’t contribute anything, 2019 allowance will be $32k + whatever allowance you get in 2018 based on eligible reported income, laundry machine guy…

#59 Blackdog on 02.19.19 at 10:47 pm

Imo, some of the ‘everyone should take CPP at 60’ crowd miss that CPP is more than a pension/annuity but is also an insurance policy. As with all insurance plans, some people put more into it than they get out of it. So when you are trying to decide when to take CPP, think about the insurance aspects of it as well as ‘break even points’ and tax implications. Some people need (need being a subjective term) the insurance but others do not.

#60 Nonplused on 02.19.19 at 10:58 pm

Garth, you seem much more generous in your opinion towards RRSP’s than you have in the past. Oh well I am on board with the new line, and it is consistent with what I remember of “Money Road”.

I personally think it will be much harder for Trudeau to mess with the RRSP than it was for him to mess with the TFSA. As you point out, it’s all most of us got.

I have about 1/2 of my liquid assets in RRSP’s. I’m happy with that, I can trade the assets just like a brokerage account. My financial adviser can make recommendations and transact those I approve. I expect to be at a lower tax bracket when I draw on those funds than I was when I put them in (although I don’t know what the % tax will be, but I was at the top bracket when I salted the money away.)

In my case though, a spousal RRSP doesn’t make a lot of sense. My wife works and inches in to the a high bracket. So what we do is make sure she has enough money by March 1st to knock that bracket down using her own RRSP. Whether the money comes from me or her doesn’t matter much because it’s all household money. So even if I give her cash to put in the RRSP but she paid for all the skiing, it all washes and we still get a nice refund. And with 2 RRSP’s, we will both be in a lower bracket when we retire, assuming nothing in the tax code changes.

Having a working wife has several advantages, one of which is increased RRSP room.

Having been previously divorced, at first I thought “why give her money she’ll just take that with her if she leaves”. But then I thought that sort of pessimism doesn’t correspond well with having got remarried. And she would take it with her anyway, no matter which account it was in. Thus, I decided the correct course of action was to the extent possible reduce both our high tax brackets. I don’t go into the bottom 2 brackets though because why bother we’ll probably be paying in those brackets upon retirement.

So I say allocate according to tax bracket and maximize the total refund. Of course, for most people that means you will run out of spare money before you run out of contribution room, but do what you can. For anybody in the tax paying class, which is only about 20% of us, about the sweetest thing you can do in the spring is get a nice juicy tax refund. I think I’d take that over a date with Jenifer Lawrence. Youth and beauty fades and becomes a sad reflection of it’s former self. Money depreciates too but not at the same sort of rate, and you always need it.

#61 yorkville renter on 02.19.19 at 11:06 pm

Was lucky enough to make a good contribution this year – $20k – not my usual minimum HBP repayment… my tax bill for the year should be under $2k.

Here’s to 2019!

#62 Risktopia on 02.19.19 at 11:30 pm

Can’t count on a db pension when you’ll get fired in your 50s.

https://www.risktopia.com/2019/02/the-corporate-scapegoat.html

#63 Rentin on 02.19.19 at 11:57 pm

The main difference is that people in the 1950’s had a tenant or boarder or did odd jobs to pay down the principle of what is likely considered a cottage or shack.

No granite, no new furniture, no media room…..

People new how to save and what the real cost of money was.

And then came inflation.

#64 Russ on 02.20.19 at 12:31 am

If regarding the offen pic:

The dude on the Hog is chatting a chick on the scooter. She has no teeth.

If geriatric sex is your thing then just keep thinking…

#65 Bottoms_Up on 02.20.19 at 12:36 am

#19 theoryAndPractice on 02.19.19 at 6:56 pm
—————————–
Various buyers. The independently wealthy, as homes, as investment. Move up buyers (that might have a lot of equity already).

#66 Fortune500 on 02.20.19 at 12:49 am

Keep the picture. Man! When did we all become so easily offended? It is actually good to see the dirty side of life. Should we ban Picasso’s Guerinca because it depicts the effects of Nazi aerial bombing?

It is an interesting capture that speaks to the viewer. Just because it is up there does not mean anyone is condoning the Hell’s Angels.

Plus, I love dogs, but it was getting old.

#67 BailinginBC on 02.20.19 at 1:00 am

#51 lifexprt on 02.19.19 at 10:02 pm

If you pull $100k out of your RRSP for an addition, refinance and then repay the RRSP back (assuming you have an extra $100k contribution room to start with) the withdrawal and contribution will equal each other out. You will however be using $100k of contribution room for very little benefit. I’d try to find another way to finance it and use your RRSP room for retirement.

#68 Dolce Vita on 02.20.19 at 2:11 am

#35 Smoking Man

No he won’t.

The story come October will be how many Liberals crossed the road and voted Conservative instead, just to rid themselves of the “bums in power”.

An age old Canadian voting tradition.

You’ve been dulled by living in America.

In 2015, an 8% popular vote swing (1.3 MM votes) = landslide +148 seats and they kicked out the then “bum du jour” Harper, in spectacular style.

17,559,353 voted in 2015, 7.4% of those voters made all the difference.

As is usual in life, the broom sweeps both ways. We’ll see if that holds true come October.

#69 Basil Fawlty on 02.20.19 at 3:02 am

https://www.reuters.com/article/us-deutsche-bank-settlement-gold-idUSKBN13R2N1

Deutsche Bank agrees to $60M class action lawsuit settlement , for gold price manipulation, enough said.

#70 Jamie Dimon on 02.20.19 at 6:09 am

Sooooo let’s say your RRSP limit for 2018 was 20,000 and you put 40,000 in in the first 60 days of 2019. Come tax time is it simple as saying 20 grand was for 2018 and other 20 was for 2019??? Basically what (if any) repercussions for blowing over?

The overcontribution limit is $2,000. After that you pay. – Garth

#71 Steven Rowlandson on 02.20.19 at 6:26 am

“My old man spent less than 2x salary to buy a detached house in a demand area. Today the same house is valued at $2 million and the average high school principal earns $120,000. Do the math.”

$2,000,000/$120,000=16 2/3 years pay.
$480,000/ $4250=113 years pay rounded up (my situation as of last year) My 1986 to 2009 average profit was $15,600.
My dad’s first home. (1965)
$6,700/$5,200= 1.29 years pay. He was a private in the RCAF and had a wife and 3 sons to support.
Dad always stayed within the dictates of the three years pay rule but then again he also got promotions and pay raises and that made it possible plus he started out buying the cheapest house around when the raised bungalows in Comox were going for $30,000 +/- .
Not everyone is so fortunate to buy right.

#72 not 1st on 02.20.19 at 7:28 am

Garth do you think virtual real estate flipping using bitcoin is a good business to get into?

https://www.bloomberg.com/news/articles/2018-06-12/making-a-killing-in-virtual-real-estate

#73 Brandon on 02.20.19 at 7:34 am

Garth,

Could you do one more post about RRSPs? When is the best time in your career to use them for deferral vs using a TFSA instead?

For example, I know one guy who makes 90k and expects his salary to hit 150k as he moves to a new company in a higher role. Should he be saving up his contribution room for when he makes the big bucks so he can generate a larger deferral? I know another person who will not make much more than 45k during his entire career. Should he even bother with the RRSP?

#74 not 1st on 02.20.19 at 7:35 am

#68 Dolce Vita on 02.20.19 at 2:11 am
—–

Certainly looks like JWR has been bought off now with some deal. Met with cabinet, sat in the minsters chair. Bet they all make up, try to sell it as she experienced it differently and hope we all forget in 6 months.

I was hoping JWR had integrity but she has yet to follow through on it. The opposite is looking more likely.

And while we are at it, watch the Liberals handiwork here in Canada. Another LNG project shut down, loonie heading to 71c. Canada is about to be lost for a generation if we don’t turn this ship.

https://www.cbc.ca/news/canada/british-columbia/steelhead-lng-pulls-out-of-vancouver-island-project-1.5024343?cmp=rss

https://business.financialpost.com/investing/cibc-sees-canadian-dollar-falling-to-15-year-lows-on-weak-exports

#75 dharma bum on 02.20.19 at 7:42 am

Even if you never plan on retiring, this allows tax to be shifted from a year in which income is good to one in which life sucks or you decide to do nothing. – Garth
——————————————————————–

I love RRSPs.

Because of maxing out my contributions over a lifetime,
I now get to do nothing. Oh, and ski.

Feels like free moolah.

By the way, that picture is priceless. I always knew Hells Angels were angels.

#76 young & foolish on 02.20.19 at 8:01 am

Why is your house worth 14x earnings ????

The growth has been in credit. America shifted from a industrial production economy (main street) to a credit economy (Wall street). We are living with the consequences.

Consider what has gone down in value (TVsets, computers, clothing) … all foreign made. Now think about what’s gone up (hidden inflation) … everything that you actually have to buy.

#77 Remembrancer on 02.20.19 at 8:07 am

#59 Blackdog on 02.19.19 at 10:47 pm
Imo, some of the ‘everyone should take CPP at 60’ crowd miss that CPP is more than a pension/annuity but is also an insurance policy.
——————————————————-
Opine away, but no its not an insurance policy, its a state-sponsored mandatory contribution retirement plan. I’ve been working since I was 14 and will be damned if anyone is going to guilt me into not collecting.

Is this that socialism that the grumpy westerners are warning about?

#78 Remembrancer on 02.20.19 at 8:12 am

#22 Phylis on 02.19.19 at 7:00 pm
a comment on rrsp over-contribution advantages/perils might be of interest. $2000.
————————————————————
That one’s easy, the taxman cometh with a mad on…

https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/rrsps-related-plans/contributing-a-rrsp-prpp/what-happens-you-over-your-rrsp-prpp-deduction-limit.html

#79 maxx on 02.20.19 at 8:16 am

From yesterday’s post:

“After all, if T2 could do it to TFSAs without much of a public whimper, well…”

Great point. Since the TFSA saw the light of day, I have felt like a lonely sentinel as regards trying to message all of the bounty and benefit this amazing vehicle provides. “max the RSP, take the tax refund, shove it into the TFSA, rinse and repeat.”

Crickets and/or deer in the headlights. Makes me want to scream “wake up!!!!!!!!!!” Oh, and the mils……”it’s only for the rich”. Can’t think further than their noses or at best their iPhone screens. Unbelievable.

I’m not surprised that not much more than a whimper manifest with the TFSA being decimated by Mr. Socks. People are sooooooooooo f’n slow to catch on.

It’s obvious that people make their own beds, done incrementally, over significant time. I’ve complained repeatedly, thinking that I was in good company. Not so, seemingly.

If ever there existed a rung on the ladder, a light through the crack in the door, a solid opportunity for wealth creation, THIS IS IT. And no contribution room lost. Years down the road, an inheritance or unexpected windfall can be stuffed in, up to the allowed limit.

Thank goodness for this blog…..like sailing into a friendly port on a sunny day, even with the yowling, growling and barking.

So healthy. So un-sheeple.

#80 Remembrancer on 02.20.19 at 8:28 am

#72 not 1st on 02.20.19 at 7:28 am
Garth do you think virtual real estate flipping using bitcoin is a good business to get into?

https://www.bloomberg.com/news/articles/2018-06-12/making-a-killing-in-virtual-real-estate
————————————————————-
Thanks !1st, that made my day. Using real money to convert to fake currency to buy fake real estate is a hoot! Obviously the Second Life crowd continued to breed and their kids came up with this…

It makes gaming companies pay-to-play advancement / in game purchasing look like liquor store stick ups compared to the Great Train Robbery….

#81 Remembrancer on 02.20.19 at 8:36 am

#55 MF on 02.19.19 at 10:18 pm
#40 expat on 02

“85% of Canadians are socialist”. Just unbelievable
———————————————————–
Maybe meant “Sociable!” and got spell corrected?

#82 Tater on 02.20.19 at 8:42 am

#5 lifexprt on 02.19.19 at 5:16 pm
RRPS Question

Can you pull an amount out of your self directed RRSP account and put back exactly the same amount within the same year? The idea is to use the funds elsewhere for the year and not suffer any tax consequences.

No. Withdrawals are taxed in the year of withdrawal according to your income in that period. Once used, the room’s gone. Unlike with a TFSA it does not restore the following year. – Garth
—————————————————————-
This has always bugged me. Let’s say you lose you job in your mid 30s and use your RRSP to live. You pay tax on the withdrawal but can’t re-contribute. You’ve lost twice. First a year or two with no income, and you deplete your savings and can never make them back up.

#83 TurnerNation on 02.20.19 at 8:48 am

#56 David Driven – Africa 2060? Global mining and drug companies have a stranglehold over it.
Coming soon here..what is this baffle gab but more control by an outside party. Who needs help and why? We have a functioning system. For now…

https://www.investmentexecutive.com/news/research-and-markets/tmx-joins-un-sustainability-effort/

“The initiative, launched in 2009, works with global exchanges to facilitate sustainable investment and help pursue the UN’s sustainable development goals through research, guidance development and other technical assistance. “

#84 Midnights on 02.20.19 at 8:57 am

A LARGE divide in Canada…

https://www.armstrongeconomics.com/armstrongeconomics101/economics/the-divorce-agreement-to-avoid-revolution/

#85 baloney Sandwitch on 02.20.19 at 9:21 am

Tax the crap out of the population and throw in a bone or two like RRSP and TFSA, and the poor peasants go away happy. While the politicians and the bureaucrats enjoy gold plated defined benefit pensions.

#86 Howard on 02.20.19 at 9:22 am

Not only will SNC-Lavalin the corporation likely escape justice. The individuals involved are walking away laughing too. Anyone tired of this yet? Where’s Canada’s yellow vest movement?

https://montrealgazette.com/news/local-news/unreasonable-delay-former-snc-lavalin-vp-stephane-roy-avoids-trial

Proceedings against former SNC-Lavalin vice-president Stéphane Roy were suspended on Tuesday because it has taken too long to bring him to trial.

#87 Toronto_CA on 02.20.19 at 10:02 am

“For example, I know one guy who makes 90k and expects his salary to hit 150k as he moves to a new company in a higher role. Should he be saving up his contribution room for when he makes the big bucks so he can generate a larger deferral? I know another person who will not make much more than 45k during his entire career. Should he even bother with the RRSP?”

For the first example – if the person knew their income would go up to $150k in the near future they could invest using the RRSP now, enjoy the tax free growth, but defer making the tax deduction until at the higher tax bracket. You can carry forward contributions to future tax years:
https://business.financialpost.com/personal-finance/retirement/rrsp/the-difference-between-an-rrsp-contribution-and-deduction

For the second example, someone on $45k probably has limited means to invest. The best place would be their workplace DC pension/group RRSP scheme assuming they have one and get an employer match (up to the maximum that is matched) – which is common. Beyond that match, they should maximise the TFSA rather than RRSP as the tax savings are minimal and the TFSA is much more flexible and does not impact GIS or OAS clawback in retirement should they be on low/no income.

#88 Boomer Bill on 02.20.19 at 10:15 am

#71 Steve Rowaldson

“$480,000/ $4250=113 years pay rounded up (my situation as of last year) My 1986 to 2009 average profit was $15,600.”

Look at the bright side Steve, you will be mortgage free in 2132!:)

#89 BillyBob on 02.20.19 at 10:19 am

#55 MF on 02.19.19 at 10:18 pm

“85% of Canadians are socialist”. Just unbelievable.

MF

==================================

I agree. I would think the number is much higher.

Socialism comes in many shades.

There’s the garden-variety NDP-voting eat-the-rich types. Always had those. Union-worhsipping, slightly left of Stalin types.

There’s the corporations privatizing profit while socializing risk. The monopolies and the duopolies. Gee, should I choose Telus, or Bell? Westjet or Air Canada? So much choice!

Then of course your own cohort of millennials braying for ever-more government “salvation”. Hey, in BC there’s no more interest on student loans. Free money! Yay!

Tell me which one doesn’t fit Canada to a T?

The free-thinkers took their skills, their capitals, or both out long ago. Always to the sneering comments, of course, of “good riddance”. Except, what’s left? Read the comments on any Canadian news article to get a taste.

85% is low.

#90 jess on 02.20.19 at 10:39 am

add to that what the royal commission found out

https://www.news.com.au/finance/economy/australian-economy/let-the-bloodbath-begin-house-prices-in-sydney-and-melbourne-could-halve-in-worst-crash-since-1890s/news-story/5918ea13042d5f819cb13c77629f060a

#91 Smoking Man on 02.20.19 at 10:43 am

68 Dolce Vita on 02.20.19 at 2:11 am
#35 Smoking Man

No he won’t.

The story come October will be how many Liberals crossed the road and voted Conservative instead, just to rid themselves of the “bums in power”.

An age old Canadian voting tradition.

You’ve been dulled by living in America.

In 2015, an 8% popular vote swing (1.3 MM votes) = landslide +148 seats and they kicked out the then “bum du jour” Harper, in spectacular style.

17,559,353 voted in 2015, 7.4% of those voters made all the difference.

As is usual in life, the broom sweeps both ways. We’ll see if that holds true come October.
…..

You’re not factoring in the newly schooled. Taught by commies, these little activists are hell bent on destroying capitalism. Justice for all. T2 feeds into their programming. As logic dies off and makes room for emotion. Our way of life is doomed.

I would not be surprised if Mad Max has a connection to Soros. Why would he split the vote and guarantee socks boy another 4 years. If he gets those years, he will import millions of liberal voters to hand Canada over to the UN.

#92 Gravy Train on 02.20.19 at 11:21 am

#72 not 1st on 02.20.19 at 7:28 am
“Garth, do you think virtual real estate flipping using bitcoin is a good business to get into?” Sarcasm?Garth is showing remarkable restraint (by not answering your question). You do know that his blog is called The Greater Fool, don’t you? You do understand the concept, don’t you? No? Here, click on this link:
https://en.wikipedia.org/wiki/Greater_fool_theory

Now, go back to praising the archcriminal—and your sweetheart—Donald Trump! :)

#93 Enlightened on 02.20.19 at 11:35 am

“Money taken from an RRSP to pay an advisor’s fee is tax-free and does not need to be repaid.”

Garth, I pay approx. $1100 a month for advisor fees on all my Non Reg, RESP and TSFA accounts. My Master Card gets charged monthly as per my request and as a small perk I collect some cash back rewards. If I understand correctly I could pay this $1100 a month by pulling from my RRSP account without any tax implications even though I am paying fees for Non Reg holdings ?

If so would this be a better solution ?

#94 IHCTD9 on 02.20.19 at 11:58 am

Went out for supper with the family on Monday. We had reservations, good thing because the restaurant was packed. It was packed with 50+ y/o folks – as per usual. There were zero young families, not even one (on “family day”).

I’ve been watching hoards of commercial buildings hit the MLS locally for the spring market. For sale, for lease, for rent, will subdivide. Prime locations and some of these buildings have been empty for years.

What I am watching here in small town Ontario, is actually the future for all of Canada. Head north and it’s even worse. Schools closing down and/or combining. Fertility in Canada is toast. It’s terrible now, and it’s going to get much worse. If Canada stopped bringing new folks in tomorrow – we’d be in a population decline scenario immediately.

Keep an eye on our demographic future. We’re headed for 2 workers for every retiree (we’re more than double that now), 25%+ of our population will be over 65 in 15 years or so. Huge numbers of single mothers are coming, record breaking quantities of single person households, fewer and fewer high paying jobs, and a steady erosion of those we have left.

Not sure what the outcome of the above will be, but a good guess would be a terminally insolvent government, and a population less able to deal than any Canadians who had come before.

Shorten that up and you have a giant need for government revenues, and population never so unable to deliver. I expect they’ll try everything before the tough love comes. Better watch the Loonie.

#95 Mattl on 02.20.19 at 12:08 pm

#71 Steven Rowlandson on 02.20.19 at 6:26 am

$2,000,000/$120,000=16 2/3 years pay.
$480,000/ $4250=113 years pay rounded up (my situation as of last year) My 1986 to 2009 average profit was $15,600.
My dad’s first home. (1965)
$6,700/$5,200= 1.29 years pay. He was a private in the RCAF and had a wife and 3 sons to support.
Dad always stayed within the dictates of the three years pay rule but then again he also got promotions and pay raises and that made it possible plus he started out buying the cheapest house around when the raised bungalows in Comox were going for $30,000 +/- .
Not everyone is so fortunate to buy right.

——————————————————–

With all due respect you have a serious income side problem. If you have been been working since 1986 and your income has averaged 15K net, home ownership is not for you. That’s paper route money.

A private in the RCAF with 3 kids could have bought in almost all Canadian markets up to 2010, and can still buy into 95% of markets in 2018. You can’t compare an upper middle class job with a pension to what is a very low income job (whatever it was, am curious to know).

Ya homes today are ridiculously expensive, I’d like to live in Kits, but come on, if you make 15K net a year that’s clearly the issue.

#96 Boomer Bill on 02.20.19 at 12:26 pm

#85 Figure it Out on 02.20.19 at 9:20 am

“The Mop’n’Pail is reporting that Derek Pannell, chair of Nutrien, sold 6,221 shares @ $71.5516, from an RESP he controls.Anyone else find it a bit eyebrow raising that a 73 year old controls an RESP worth at least $450k?
I mean, there may be legitimate reasons… but I’m wondering if I’m missing any tax planning tricks.Anyone?”

Well start by being a CEO of a corporation..
You sure it was an RESP? You can only contribute a lifetime maximum of $50,000…

https://help.wealthsimple.com/hc/en-ca/articles/115004109707-Is-there-a-maximum-amount-I-can-contribute-to-an-RESP-

#97 not 1st on 02.20.19 at 12:40 pm

#93 Gravy Train on 02.20.19 at 11:21 am
——

Dude spare me your SJW faux outrage. it was a tongue in cheek comment based on Garths couple past blog posts on RE and bitcoin. He was smart enough to figure it out, but you got triggered. Says a lot.

#98 Ubul on 02.20.19 at 12:54 pm

#87 Howard on 02.20.19 at 9:22 am

Not only will SNC-Lavalin the corporation likely escape justice. The individuals involved are walking away laughing too. Anyone tired of this yet? Where’s Canada’s yellow vest movement?

https://montrealgazette.com/news/local-news/unreasonable-delay-former-snc-lavalin-vp-stephane-roy-avoids-trial

Proceedings against former SNC-Lavalin vice-president Stéphane Roy were suspended on Tuesday because it has taken too long to bring him to trial.

===

Interesting timing coincident. The crime is gone, the bruhaha can go away.

The easiest political interference with the justice system is to bring a case to trial “too long”. In worst case a low level fall guy gets a slap on his/her wrist to maintain the appearance of law and order.

#99 IHCTD9 on 02.20.19 at 2:00 pm

#76 young & foolish on 02.20.19 at 8:01 am

Consider what has gone down in value (TVsets, computers, clothing) … all foreign made. Now think about what’s gone up (hidden inflation) … everything that you actually have to buy.
_____

Down: Pretty much every consumer good you can name (compared to income).

Up: Everything related to RE, Energy, and Government. Government includes a good chunk of said energy, plus education, health care and much more.

You are right, and this is why all efforts should be taken on every front to pay less taxes. The areas you need to concentrate on are listed above.

At this point in the game, our taxes will always fall short of the costs. Spending will always exceed revenues, and it’s not because someone made a budgeting error. No one cares. Nothing is going to change until the SHTF.

Your taxes will keep going up, but you will see no increased benefit for the expenditure. The money is being mopped up by a giant bureaucracy, ideological garbage, dumbass policy, and airheaded SJW pursuits. The money flows into the fog bank never to be seen again until your retired teacher neighbour buys that new RV.

Slap a tourniquet on it, choke down the flow. It’ll do you and most other Canadians more good in your own wallet rather than in the soft pink hands of balloon heads like Trudeau.

#100 James on 02.20.19 at 3:15 pm

#92 Smoking Man on 02.20.19 at 10:43 am

68 Dolce Vita on 02.20.19 at 2:11 am
#35 Smoking Man

No he won’t.

The story come October will be how many Liberals crossed the road and voted Conservative instead, just to rid themselves of the “bums in power”.

An age old Canadian voting tradition.

You’ve been dulled by living in America.

In 2015, an 8% popular vote swing (1.3 MM votes) = landslide +148 seats and they kicked out the then “bum du jour” Harper, in spectacular style.

17,559,353 voted in 2015, 7.4% of those voters made all the difference.

As is usual in life, the broom sweeps both ways. We’ll see if that holds true come October.
…..

You’re not factoring in the newly schooled. Taught by commies, these little activists are hell bent on destroying capitalism. Justice for all. T2 feeds into their programming. As logic dies off and makes room for emotion. Our way of life is doomed.

I would not be surprised if Mad Max has a connection to Soros. Why would he split the vote and guarantee socks boy another 4 years. If he gets those years, he will import millions of liberal voters to hand Canada over to the UN.
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Wow your still sober at 10:43 AM? Must be a slow day Old Man. One has to pose this question to you Old Man, why do you care about this country, you left it and you have done nothing but denigrate it since you left. Your ass was broomed out the door due to your inability to secure a decent paying income here in the Dominion and I might add it was in your own words due to the fact that you lost your home. So posing as a great prognosticator of real estate doesn’t fly with any of us have memories Old Man! You had to sell! Now granted the Dominion does have its problems but it is for those of us whom live here, earn an income here and have families here with roots to solve our own social and political concerns of which none are currently of your concern.
Nothing brings a group of assholes together that something that’s none of their freaking business.
BTW: Freaking was really another word that is not appropriate.

#101 EB on 02.20.19 at 3:27 pm

” If Canada stopped bringing new folks in tomorrow – we’d be in a population decline scenario immediately”

I guess they defused that population bomb that was going to kill us all in the 1970s.

#102 Barb on 02.20.19 at 3:31 pm

#99 Ubul on 02.20.19 at 12:54 pm

“The easiest political interference with the justice system is to bring a case to trial “too long”. In worst case a low level fall guy gets a slap on his/her wrist to maintain the appearance of law and order.”

—————————————

Many years ago, a lawyer looked across his desk at me and an individual (who was going to sue someone for breach of contract), and said:

“The legal system was created to keep people like you (middle class) from getting to/at people like them (the financially powerful).”

It hasn’t changed in all these years.

#103 Steven Rowlandson on 02.20.19 at 3:36 pm

Re #89 those were theoretical numbers for me. There is no way I could rent or buy a place to live on my income.
I need a miracle to happen like silver going to 10s of thousands of dollars per ounce or me winning a lotto max jack pot. Work when I can get it is good but not enough to deal with big expenses.

#104 IHCTD9 on 02.20.19 at 4:18 pm

#102 EB on 02.20.19 at 3:27 pm
” If Canada stopped bringing new folks in tomorrow – we’d be in a population decline scenario immediately”

I guess they defused that population bomb that was going to kill us all in the 1970s.
___

Yeah, that population explosion thing is toast. I believe even the UN lowered their global population estimates going forward.

If you look for an answer as to why this downturn in fertility is taking on a global scale, your’re going to have trouble escaping a few common denominators – the most prevalent and consistent being the effects of educating Women, and sending them into the workforce. Right behind that one is the effect of Religious conviction on fertility.

The more I read about it, the more I think many will eventually agree that getting piles of Women into the workforce may not have been the best idea for the long run.

Either that, or the fertility problem will sort itself out naturally once all the aged feminists and progressives have yielded their positions having been totally out-bred by Africans, Middle Easterners, and God fearing folks the world over.

#105 Smoking Man on 02.20.19 at 4:25 pm

James I can talk about anything I want with in the GF rule book. Now go shovel your driveway.

#106 KLNR on 02.20.19 at 4:39 pm

@#90 BillyBob on 02.20.19 at 10:19 am
#55 MF on 02.19.19 at 10:18 pm

“85% of Canadians are socialist”. Just unbelievable.

MF

==================================

I agree. I would think the number is much higher.

Socialism comes in many shades.

There’s the garden-variety NDP-voting eat-the-rich types. Always had those. Union-worhsipping, slightly left of Stalin types.

There’s the corporations privatizing profit while socializing risk. The monopolies and the duopolies. Gee, should I choose Telus, or Bell? Westjet or Air Canada? So much choice!

Then of course your own cohort of millennials braying for ever-more government “salvation”. Hey, in BC there’s no more interest on student loans. Free money! Yay!

Tell me which one doesn’t fit Canada to a T?

The free-thinkers took their skills, their capitals, or both out long ago. Always to the sneering comments, of course, of “good riddance”. Except, what’s left? Read the comments on any Canadian news article to get a taste.

85% is low.
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LMAO, sure billybob.

#107 marcus on 02.20.19 at 6:19 pm

“Why would anyone want $16,000 worth of silver? The metal pays no interest or dividends, costs money to store and is 27% lower in value than it was five years ago.” I know right! Why the hell would you buy a physical asset when it is cheaper by 27% Crazy town! YOu just cannot teach some people! LOL!

#108 maxx on 02.20.19 at 8:15 pm

@#28

…especially in a gig economy.

#109 Islander on 02.21.19 at 10:37 am

$2,500 RRSP deduction room in 1957? Wow. On 90k last year my RRSP room was $3700. I have contribute to a small non cola’d telco pension and the Pension Adjustment just kills my RRSP room.

Question: Which government screwed the middle class employees lucky to have a small pension?

This pension is not guaranteed by the company in any way. If the pension fais I get nothing. Fair enough but I was prohibited by the government to build a bigger nest egg.

Oh well, I retired last month so I guess I’m on the side where a small RRSP is better. But I would like to know which government brought in the PA.