The fixer

 – Andy Seliverstoff photo

Days ago we flummoxed over the possibility Ottawa could sideswipe TFSAs. This came on the heels of a socialist economist suggesting tax-free savings accounts favour the wealthy. Contribution limits should be capped (at current levels) he argued. And there also needs to be a lifetime limit on what an account can hold in taxless assets.

In response, naturally, this blog slobbered and squirted in protest, pointing out TFSAs are (unlike RRSPs) democratic and universal. We all get the same chance to make some dough and pay no tax on it. So is it the fault of those who do, that most people don’t?

To refresh your memory: the limit now is $69,500 per person, or almost $140,000 for a couple. If you invest that in a nice B&D portfolio, and keep making the annual contribution, this will become about $1.1 million in twenty years. That will produce at least $5,000 a month in cash flow, no tax. Add in a couple’s CPP and OAS and, presto, a household retirement income of (at today’s benefit level) of about $80,000. No income tax.

Obviously it’s a money machine. This bothers the lefties who argue average people cannot find $6,000 a year to stuff into their TFSAs, so nobody should. On their planet everyone should have a universal basic income, which rolls into a livable public pension. Who funds it all? Other people, of course.

Now, what are most folks doing?

According to an Ipsos poll of the four-in-ten little beavers who have opened a TFSA, 42% have their money sitting in cash, most often a HISA. A chunk of others have GICs at 2% or 3%. And what do people use their accounts for? What life goals?

A quarter keep day-to-day savings in there – money used for nice shoes and Puerto Vallarta. One in ten are saving for a house. Another 35% keep it in cash as an emergency fund (have you ever had one?) About a third are holding TFSAs for retirement. And guess what? Wealthy people are not more into TFSAs than anyone else. Just 23% of 1%ers max their plans, about the same as lower-income folks.

Well, let’s assume no changes are made to the TFSA for a while, despite the haters. Here are six strategies to consider:

  • If you make a modest amount, have no gold-plated defined benefit pension and your parents won’t leave you their portfolio of Tesla stock plus a house in Kits, then stuff the TFSA for retirement. After all, you may have to rely on public pogey – CPP plus OAS and the GIS payment. None of those things will be taxed away if you take regular income from a fat TFSA.
  • Conversely, if you make a lot, save a lot, have an boodle invested and a rich pension there’s a good chance your marginal tax rate will be as high, or higher, when you retire as it is while working. In that case, having a mess of RRSP money could mean paying more in tax when you take income than the break received for contributing. Sucks. So a TFSA is a better alternative than a registered retirement plan.
  • If you’re young and clever build a sizzling TFSA now, then shift some of that money over into RRSP later on where your career flowers and income jumps.  Use TFSA tax-free growth to get a big tax refund when its slides into the RRSP. Smile.
  • Planning to die? Me neither, but it’ll probably happen. So make sure your squeeze is named as ‘successor holder’ on your plan, and not as beneficiary. That way your entire TFSA becomes his/her property with no assets moved out.
  • People heading for retirement with low incomes and RRSPs might consider this: slowly cash out those retirement plans and move the money into TFSAs. The tax paid on collapsing the RRSPs will likely be less than the amount of government benefits  that are lost after you retire.
  • And for wealthier folks with RRSPs, when your estate is settled retirement plans are deemed to have been cashed out and the assets fully taxed. So move  money into TFSAs, which are taxless. Your spawn will be happy.

Most of all, use this vehicle fully. Now. Find a few hundred a month to keep it loaded. Invest in a sane mix of growth assets. Lend your spouse money to max his/her account. Ditto for your adult children. No gains will be attributed back to you. It matters not if you’re a 1%er or a 99%, have a fat DB pension, or none. This is a flexible, modern tool that can substantially improve your financial future.

Unless the commies take it. Over my chiseled abs.

 

117 comments ↓

#1 Nat on 02.05.20 at 4:11 pm

Does successor holder override beneficiary status? Is it possible to have both ie. list successor holder then beneficiary as a second place option (assuming successor holders death)?

#2 Tater on 02.05.20 at 4:17 pm

#124 Phylis on 02.05.20 at 3:00 pm
#87 Tater on 02.05.20 at 8:15 am Ok i’ll bite. What happened that was interesting?

———————————————
I’ll give you a hint, 673.52 is now the key level on Tesla.

#3 Linda on 02.05.20 at 4:18 pm

Aw, the dog in today’s picture looks so proud of the floral bouquet:)

TFSA’s forever!!! Totally an excellent idea to shift RRSP funds into the TFSA prior to being forced to convert it to a RRIF – always supposing, of course, that one has funds to shift in the first place.

As for funding that TFSA, the current contribution limit is $6K. That translates to just over $115 per week or not quite $16.50 per day. For all those busy little beavers who cry they can’t possibly save that much, three questions. First, do you brown bag your lunch or do you purchase it? Second, do you bring a thermos of your beverage of choice to consume at work during the day, or do you purchase it? If the answer to the first 2 questions is ‘I purchase it’ my third question would be ‘how much does that cost you each day?’. Bet the answer would be at least $15-$20. There is the better part of your weekly TFSA contribution right there.

#4 Yukon Elvis on 02.05.20 at 4:30 pm

Unless the commies take it.
………………………….

Commies will try to take it. It is what they do. TFSA is just too sweet of a deal for the average peon.

#5 Big Bucks on 02.05.20 at 4:30 pm

In all honesty ,do you really believe the government will allow a couple to make $80,000.00 a year in retirement and pay no tax on that amount?Supertramp sang it best….Dreamer…nothing but a dreamer…

#6 Ubul on 02.05.20 at 4:33 pm

Not guilty as charged.
Not guilty as charged.

Spare the papers!

#7 unbalanced on 02.05.20 at 4:36 pm

Who’s to say there will be any government pogey in the future. Theres clawbacks now so whats stopping the future. Boomers will leave alot on the table. NOT this guy.

#8 Piano_Man87 on 02.05.20 at 4:39 pm

#5 Big Bucks on 02.05.20 at 4:30 pm
In all honesty ,do you really believe the government will allow a couple to make $80,000.00 a year in retirement and pay no tax on that amount?Supertramp sang it best….Dreamer…nothing but a dreamer…

——————————————————————-

Anyone can already get ~$37,500 in dividends from Canadian corporations tax free, due to the generous Canadian dividend tax credit. I did the math one day and I believe that’s the max amount before you start paying tax. So that’s 75k for a couple. Many already do this. That’s why they say the rich get richer… principal grows, and they live off the interest.

#9 Capt. Serious on 02.05.20 at 4:47 pm

Even if they ever come after the TFSA, they’ll have to do something like lifetime cap it or grandfather it. There is nothing tax dodgy about the TFSA given it was expressly created by the government.

#10 Michael on 02.05.20 at 5:01 pm

Hello,

Can someone please elaborate on the below point? Specifically the shifting of money over to the RRSP. I understand the benefits of both vehicles, but why would you take money out of your TFSA? and what money? Money you have made or money you have contributed?

“If you’re young and clever build a sizzling TFSA now, then shift some of that money over into RRSP later on where your career flowers and income jumps. Use TFSA tax-free growth to get a big tax refund when its slides into the RRSP. Smile.”

Thank you!

#11 Oh Ho ... on 02.05.20 at 5:08 pm

Looks like Garth might be heading to Ottawa after all. In fighting form too. Maybe get in the ring with you know who again. Battle of the TFSA …

#12 FAKE NEWS on 02.05.20 at 5:10 pm

ACQUITTED!!!

HAVE A SPLENDID EVENING….

#13 Camille on 02.05.20 at 5:14 pm

Thank you Garth. I am changing the assets i hold in my TFSA to generate income. Hearing TFSA every day flipped a switch.

#14 Sold Out on 02.05.20 at 5:22 pm

If I’d been in charge at its creation, I’d have insisted that TFSA income count towards OAS cut-off. Why should someone with a DB pension and $50k TFSA income receive a low-income support? In fact, the cut-off should probably be lowered.

Surely that’s something all those commie hating, small gov types can get behind.

#15 FreeBird on 02.05.20 at 5:33 pm

#3 Linda on 02.05.20 at 4:18 pm
————
Agreed. I’ve been leaving similar tips. Daily Starbucks and or Timmies could be added along with others but from experience it’s where you start to get push back from many. Bottom line I guess is wants vs needs and delayed gratification balanced with some joy in daily life. My mom always handled family money and was an expert budgeter and queen of making do but believed we need to enjoy life a bit too otherwise what’s the point? Am I the only ones whose parents knew 101 ways to cook hamburger, dilute koolaid to stretch it and buy the huuuge bag of puffed rice cereal? They gave those up by my teens but fun times ; )

#16 Shawn Allen on 02.05.20 at 5:33 pm

Government Haters?

#14 Sold Out on 02.05.20 at 5:22 pm
If I’d been in charge at its creation, I’d have insisted that TFSA income count towards OAS cut-off. Why should someone with a DB pension and $50k TFSA income receive a low-income support? In fact, the cut-off should probably be lowered.

Surely that’s something all those commie hating, small gov types can get behind.

***************************
No, not at all. Government haters LOVE any aspect of government that works to their own advantage. This is not about intellectual honesty. Self-interest rules.

#17 david on 02.05.20 at 5:37 pm

based on todays market close, I think my very balanced fully registered portfolio is approaching 20% YoY return. yes, the first digit HISA losers is a two.

#18 Smartalox on 02.05.20 at 5:38 pm

Garth,

Can one make investments in another’s TFSA?

My parents’ TFSAs are pretty empty, and I’d like to be able to help their monthly cash flow in retirement. IF (a big if) I were able to find the money, could I gift it to them to fund some dividend-paying investments in their TFSAs, have them use the income to supplement their CPP and OAS (and GIS) and have them name me the ‘successor holder’ so that the captial comes back to me, eventually?

The current funding model is that I send them money (i.e.: capital) out of pocket every month.

Give them money and they can then contribute. No attribution. – Garth

#19 TheSpangler on 02.05.20 at 5:38 pm

#14 Sold Out on 02.05.20 at 5:22 pm
If I’d been in charge at its creation, I’d have insisted that TFSA income count towards OAS cut-off. Why should someone with a DB pension and $50k TFSA income receive a low-income support? In fact, the cut-off should probably be lowered.

Surely that’s something all those commie hating, small gov types can get behind.
—————————————————————-

Everyone has access to the TFSA, it was your choice not to contribute to it.

#20 FreeBird on 02.05.20 at 5:47 pm

#10 Michael on 02.05.20 at 5:01 pm
Hello,

Can someone please elaborate on the below point? Specifically the shifting of money over to the RRSP. I understand the benefits of both vehicles, but why would you take money out of your TFSA? and what money? Money you have made or money you have contributed?

“If you’re young and clever build a sizzling TFSA now, then shift some of that money over into RRSP later on where your career flowers and income jumps. Use TFSA tax-free growth to get a big tax refund when its slides into the RRSP. Smile.”
————————-
I’m sure some others and or Garth who are know more about taxes then me can explain but I think he’s saying

1. RRSPs are most valuable with higher incomes, ie usually when older and income is higher so best to utilize TFSA while young/er

2. When/if it makes sense based on age/income to take out an RRSP move some money from now grown/larger TFSA to start funding an RRSP. Take refund from RRSP and put into TFSA.

Does this help?

#21 The Wet One on 02.05.20 at 6:01 pm

All the way around (except for the august folks who frequent this blog and its author) are basically dumb. The author of the article is dumb. The well to do who don’t use their TSFA’s are dumb (or alternatively have better things to do, but more likely dumb), the less affluent folks who don’t max it out are dumb.

It’s just dumbness all the way around.

But that’s how it is with money matters.

In fact, I’m dumb too since I haven’t used my TSFA to its fullest potential either.

Like I said, dumbness is everywhere and all but universal.

Despite this, somehow or another, we abide.

It’s actually rather amazing when you really look at it.

#22 Bob Dog on 02.05.20 at 6:03 pm

I have a lot of room in my RRSP contribution limit. What is the maximum I can contribute in a single year? Obviously I cant reduce my tax to zero but how close to zero can I get considering an income of 100K.

You can contribute whatever your room is, and claim a deduction from taxable income. If you think you’ll earn more in future years, then contribute now, grow the money but wait to claim it, for more relief. – Garth

#23 IHCTD9 on 02.05.20 at 6:11 pm

#15 FreeBird on 02.05.20 at 5:33 pm
——-

We got the puffed wheat instead. Also cream of wheat, French toast, rolled oats, mashed potatoes, plenty o Hamburg, and all manners of canned and garden veggies.

I’m sure it was cheap, but I didn’t really appreciate having taste buds until I struck out on my own…

#24 tkid on 02.05.20 at 6:19 pm

https://www.reddit.com/r/China_Flu/comments/ezdoa0/life_is_hard_really_hope_this_could_end_soon/

At the top of the page are links to jpgs, translated, of the plight of ordinary Chinese.

#25 TurnerNation on 02.05.20 at 6:22 pm

Can’t wait hearing from tonight’s crop of Infectious Disease experts.
Look if you’re getting info from any mainstream source be aware that a tiny handful of Media and Entertainment (cough) global corps own all of these.
Their job is not news but repeating pap to keep you pacified – at a profit.

No wonder, blog dogs report reading this pathetic weblog over their morning tea/afternoon beer/evening whiskey/late night bong/early morning crackpipe. You can tell.

#26 Igor on 02.05.20 at 6:31 pm

Garth, it is possible that T2 (or whoever will be after him) will go totally bananas in 10 years and make TFSA gains taxable too? I know it will be double taxation, but we can expect anything from them, can’t we?

#27 Sail away on 02.05.20 at 6:39 pm

#2 Tater on 02.05.20 at 4:17 pm
#124 Phylis on 02.05.20 at 3:00 pm
#87 Tater on 02.05.20 at 8:15 am Ok i’ll bite. What happened that was interesting?
———————————————
I’ll give you a hint, 673.52 is now the key level on Tesla.

——————————-

Darn, it went down. I thought it would continue daily 20% gains forever. Better sell this dog.

#28 Sail away on 02.05.20 at 6:47 pm

Trump acquittal- great news for the Geo Group (company running private prisons and detention centers under government contract).

It pays a juicy 12% dividend and could easily double from here.

#29 BlogDog123 on 02.05.20 at 6:50 pm

re: #22 Bob Dog on 02.05.20 at 6:03 pm
I have a lot of room in my RRSP contribution limit.

==
Look at the T1/ provincial tax forms from last year for a rough idea. RRSPs work best when you contribute enough to have you fall out of range of those higher tax brackets (fed, provincial). Say you’re making 100k a year, contribute enough so your net income falls below that higher 26,29% bracket you’re in. You can apply some contributions from today to a later year to stay out of those higher brackets. That’s why young folks should start their careers filling up the TFSA (while they earn in the 20.5% bracket), save that RRSP room, and then contribute to their RRSPs when they finally make the big bucks (26,29%).

When you’re retired and you take money out ideally you’ll be in those lower tax brackets, as you’re ‘earning’ less from your RRIF and other sources of income…

Doesn’t someone have a fancy spreadsheet for optimizing how much to put in each year to get the lowest overall tax hit?

In 2020, Canada’s (Federal only) Income Tax Brackets are:

15% on the first $48,535 of taxable income, plus
20.5% on the next $48,534 of taxable income (on the portion of taxable income over $48,535 up to $97,069), plus
26% on the next $53,404 of taxable income (on the portion of taxable income over $97,069 up to $150,473), plus
29% on the next $63,895 of taxable income (on the portion of taxable income over $150,473 up to $214,368), plus
33% of taxable income over $214,368

#30 Alessio on 02.05.20 at 6:58 pm

All I can say is WOW! Stocks skyrocketing up! House value up! Xo do value up up up!!!! Sky’s the limit in this new era! Love it. I don’t feel any richer though but love seeing green! Bad news is good news. Good news is good news. No news is good news! Woohoo! Buy the dip. Buy the bull. Buy the bear. Buy a house. Buy a condo. Buy ETFs. Buy it all!

#31 Mr. Nirp on 02.05.20 at 7:07 pm

@#12 FAKE NEWS on 02.05.20 at 5:10 pm

And do you have a problem with that?

Uncle Trump has every right to be acquitted just like he has the right to do like whatever! And you better get used to it. Uncle Trump not only will get re-elected this year and in 4 years time. But … yes that’s right…. get elected again in 4 years afterward, and then 4 years after that, 4 years after that… (rinse, repeat).

Hmm.. Uncle just doesn’t have such a glorious ring to it.
Trying to think of some other terms to call uncle, but most are already taken. Terrific Trump? Magnificent Trump? Trump the Great? Dunno maybe someone who is not linquistically (sp?) challenged can provide some ideas. A new republic has to have a new great great awesome fantastic leader. History will probably name Obama is the last president of the old boring republic.

PS: Uncle(tentative title) Trump will likely implement negative interest rates, just like Mr. Nirp prophesized(sp??) that he would.

#32 Linda on 02.05.20 at 7:11 pm

#15 ‘Free’ – to be fair, a lot of people these days have little or no cooking experience. So brown bagging it may not be that easy until they gain some. I was fortunate enough to grow in a family where everyone could cook & cook very well. So I was play cooking when I was all of 4 years old & doing ‘real’ cooking by age 8. I was too short to use the stove by myself prior to then, but once I was tall enough it was game on. Let’s just say my brown bag meals are as far from cold cuts slapped between two slices of Wonder Bread as possible. It is easy to resist eating out when what one brings from home is so much better & cheaper to boot.

#33 MF on 02.05.20 at 7:35 pm

Nancy Pelosi:

I don’t dislike her, and I was actually a bit of a fan, but her acting like a child during the state of the union address was pretty dispicable.

Honestly she should be ashamed and apologize. Seriousy.

..

The Acquittal:

Was a foregone conclusion from the beginning. No one took any of the trial seriously unless they were delusional, or just didn’t like Trump (or both). Does nothing but play right into Trump’s main strategy where he says the “establishment” is against him and he is a rogue. Average people, whether they like Trump or not, can’t figure out why so much time and effort was spent on nothing.

The Democratic party is clearly and increasingly out of touch with reality, and in shambles.

Back in 2016 I said expect 8 years of Trump -and I was right.

MF

#34 WUL on 02.05.20 at 7:44 pm

#26 Igor on 02.05.20 at 6:31 pm

… and make TFSA gains taxable too? I know it will be double taxation, but ….”

tired…tired…tired…

I really tire of this “I’ve already been taxed on that $.”shit we get here in this comment section.

You have not been taxed on the gains. That’s new money.

#35 Cici on 02.05.20 at 7:48 pm

All I know is that if they do gut the TFSA, I will be voting Conservative for the very first time in the next election!

#36 Xi Jinping on 02.05.20 at 7:54 pm

Thank you for support in releasing Meng from Vancouver.

I have asked Steven Guilbeault to exempt you from the blogger tax / licensing fee.

Very good.

#37 mike from mtl on 02.05.20 at 8:01 pm

By the way for the QC readers out there, specifically for the TFSA, that needs to be in the Will. There’s no provision for a successor holder as far as Revenu Québec is concerned.

#38 Genesis II on 02.05.20 at 8:10 pm

26 Igor on 02.05.20 at 6:31 pm

Garth, it is possible that T2 (or whoever will be after him) will go totally bananas in 10 years and make TFSA gains taxable too? I know it will be double taxation, but we can expect anything from them, can’t we?
———-

Sure, but they’d have to change the name to TSA (Taxed Savings Account).

However, since very few are utilizing it maximally, I doubt the negative publicity would be ‘worth’ it. But I never underestimate Governments from doing stupid things, so we’ll have to wait and see.

#39 Samantha on 02.05.20 at 8:15 pm

Lefties should focus on earning more money, not counting someone else’s! Inequity is a fact of life, so instead of complaining, ask yourself “what am I going to do about it?”. And “screwing anybody more successful than me” is the wrong answer!

#40 Vicguy on 02.05.20 at 8:22 pm

@Michael

You’re making way more complicated than it is. I use the same online broker for my self managed TFSA, RRSP and kid’s RESP.

I simply request they move either cash sitting in my tsfa or an investment (ETF, stock, bond or whatever) to my RRSP. There aren’t any taxes owed implications (like trying to do the reverse) and it doesn’t matter if it is money you contributed, cash from dividends, equities that have capital gains.. doesn’t matter, remember withdrawals from a TFSA don’t induce a tax hit. It’s post tax money where the gains aren’t taxable. The benefit of transferring investments is you don’t incur commissions (assuming you want to hold the same investment in your RRSP as you had in your TFSA).

Why would I do such a thing? I’m in a higher tax bracket than years past, so moving some money to my RRSP gives me a much better refund (which can be stuck back into my TFSA).

#41 the ryguy - In cabo on 02.05.20 at 8:26 pm

#24 tkid on 02.05.20 at 6:19 pm
———————————–
Damn..those are brutal stories. I hadn’t even thought of that side of it…everyone is going into the hole. Peter Zeihan has a new book coming out in march, and I heard an interview with him a couple days ago. He was asked about the stability of China and he said something like “I have a whole chapter about China, but honestly its possible they collapse before my book comes out”. I’m sure that’s fairly facetious but it makes you think..what is it they say about how one goes bankrupt? Slowly at first and then very quickly.

#42 Sold Out on 02.05.20 at 8:32 pm

#19 TheSpangler on 02.05.20 at 5:38 pm
#14 Sold Out on 02.05.20 at 5:22 pm
If I’d been in charge at its creation, I’d have insisted that TFSA income count towards OAS cut-off. Why should someone with a DB pension and $50k TFSA income receive a low-income support? In fact, the cut-off should probably be lowered.

Surely that’s something all those commie hating, small gov types can get behind.
—————————————————————-

Everyone has access to the TFSA, it was your choice not to contribute to it.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxx

You know you’re reaching when you attack an argument that no one was actually making.

At no point did I say that no one should have a TFSA because I don’t have one. Mine is stuffed to the gills, and growing like a weed. Everyone should contribute, if possible.

The argument that I was making is that someone with $77,580 in income, from any source, doesn’t really need the $613.53 per month, and that OAS may do more good if it were increased and targeted at lower income retirees. Cutting off high income retirees would offset the increased costs.

I’d start clawing it back at $60k, phasing it out by $80k. Good policy, bad politics.

#43 Sail away on 02.05.20 at 8:33 pm

#38 Genesis II on 02.05.20 at 8:10 pm
26 Igor on 02.05.20 at 6:31 pm

Garth, it is possible that T2 (or whoever will be after him) will go totally bananas in 10 years and make TFSA gains taxable too? I know it will be double taxation, but we can expect anything from them, can’t we?
———-
Sure, but they’d have to change the name to TSA (Taxed Savings Account).

———————-

Haha, yes. Or even an account that is “Taxed Really Unequally (to) Defend Extraneous And Useless Programs (TRUDEAUP)”.

#44 WIN not lose on 02.05.20 at 8:48 pm

Thanks Garth
2 Newfie pictures in three days.
Newfies are the best.
My wife wrote a great book about Newfies, past and present, Newfies to the Rescue.

#45 Mohammad on 02.05.20 at 8:51 pm

Love your blog Mr. Turner.

#46 Phylis on 02.05.20 at 9:01 pm

#27 Sail away on 02.05.20 at 6:39 pm
#2 Tater on 02.05.20 at 4:17 pm
#124 Phylis on 02.05.20 at 3:00 pm
#87 Tater on 02.05.20 at 8:15 am Ok i’ll bite. What happened that was interesting?
———————————————
I’ll give you a hint, 673.52 is now the key level on Tesla.

——————————-

Darn, it went down. I thought it would continue daily 20% gains forever. Better sell this dog.

——————————

Best i can figure is that you are implying a support level, but im not sure how the volume was important in that determination. Seems that sailaway supports your theory as he is thinking of selling. The bubble definition moment?

#47 Barb on 02.05.20 at 9:02 pm

Today’s photo is magical.

#48 TheUnhealthy on 02.05.20 at 9:08 pm

I believe Doug touched briefly on the topic recently but I wanted to know what you and the team think about investment allocation regarding TFSA’s. I have been treating all of my investments in different accounts as one big portfolio. Preferreds, cad etfs, US etfs in my margin. Bonds, reits, international etfs in tfsa and bonds in RRSP. Any spillover gets put in what I believe to be the most tax efficient accounts. My question is have you, your team or anybody you know of calculated the long term outcome of holding more growth oriented assets(or even a 60/40) as a “separate” portfolio in a tfsa vs. one split amongst various accounts? For example: If someone has a million in assets, their tfsa and RRSP would only have bonds and/or reits. If they do a 60/40 in a tfsa, they lose out on foreign withholding refunds and pay their marginal rate on bond/reit income.
Hopefully this is less painful for you to read than me to write. My brain hurts. I tried to calculate for myself but it ended up being above my pay grade.
For what it’s worth. I knew nothing about finance the first time I visited your blog in Jan 2013. Everything I learned stemmed from here. Maxed TFSA’s(successor holder), tax deductible RRSP contributions, joint margin, maxed resp’s and the cardinal rule… it’s all noise. I initially invested immediately prior to “the fiscal cliff.” :). I may not be doing everything perfectly but my financial situation would be non-existent if not for you. Thank you! Really! Thank you!

#49 Barb on 02.05.20 at 9:08 pm

“Wealthy people are not more into TFSAs than anyone else. Just 23% of 1%ers max their plans, about the same as lower-income folks.”

Perhaps Mr. Morneau will be sent this sentence…

#50 crowdedelevatorfartz on 02.05.20 at 9:35 pm

@#34 WUL
“I really tire of this “I’ve already been taxed on that $.”shit we get here in this comment section.

You have not been taxed on the gains. That’s new money.”
+++++

Spoken like a true socialist.

Well.
Look at it THIS way.
The money I RISK on investment was already taxed 25% BEFORE I decided to take a chance and RISK losing it on a bad investment.
Why should I be penalized AGAIN by paying taxes on the profit of MY money that I RISKED?

Perhaps we should all stop putting money into the markets and see what a panicked govt will do to generate cash flow to stimulate the economy…besides borrowing more.

I know.
Lets lock all the socialists in a room with enough food for 100% of them.
The 1st day we’ll then take 25% of the food away as a tax.
The 2nd day we’ll weigh all the people.
If anyone has gained weight….we’ll take 25% of THEIR food because , they obviously dont need it.
This will continue day after day until their is no food left to take.

Taxes by govts that cant balance budgets……

#51 DON on 02.05.20 at 9:59 pm

#23 IHCTD9 on 02.05.20 at 6:11 pm

#15 FreeBird on 02.05.20 at 5:33 pm
——-

We got the puffed wheat instead. Also cream of wheat, French toast, rolled oats, mashed potatoes, plenty o Hamburg, and all manners of canned and garden veggies.

I’m sure it was cheap, but I didn’t really appreciate having taste buds until I struck out on my own…
**************

What about the powdered milk?

#52 cramar on 02.05.20 at 10:05 pm

Now that will be the battle of the decade! Mr. Chiseled Abs vs. Mr. Socks. The stakes are massive—nothing less than the survival of the TFSA.

Go Abs, go!

#53 DON on 02.05.20 at 10:20 pm

#50 crowdedelevatorfartz on 02.05.20 at 9:35 pm

@#34 WUL
“I really tire of this “I’ve already been taxed on that $.”shit we get here in this comment section.

You have not been taxed on the gains. That’s new money.”
+++++

Spoken like a true socialist.

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

I just got a flashback to an Archie Bunker moment.

Good chuckle!

#54 T-Rev on 02.05.20 at 10:22 pm

“Over my chiseled abs”

Can we take this of official confirmation that you’ve changed your mind and will now be seeking leadership of the CPC? Lead us forth to the promised land of financial literacy and balanced portfolios oh bearded one!!!

#55 Cici on 02.05.20 at 10:22 pm

#32 Linda

I think you were right the first time round: everyone, regardless of cooking skills, is capable of brown bagging it. Doesn’t take much skill or equipment to pack a simple tuna, egg, turkey, cheese and lettuce or peanut butter and jelly sandwich along with some carrot and celery sticks, crackers and an apple or other piece of fruit.

One smart roommate I had would cut up all his veggies and prepare five days’ worth of sandwiches all on a Sunday morning and then throw them in the fridge for a guaranteed lunch every day of the week.

I didn’t follow suit because I thought I was too good for soggy bread. Boy did I ever pay the price.

#56 SoggyShorts on 02.05.20 at 10:30 pm

#104 Early FI Wannabe on 02.05.20 at 11:38 am
The absolute Best answer to that question I’ve been able to find is at the earlyretirementnow.com blog.
In-depth yet simple calculations and explanations.
I was a Trinity study 4%er for almost too long before finding that site, changed my entire outlook and I made a very significant shift in my plans.

#57 DON on 02.05.20 at 10:33 pm

@MF

If Trump gets re-elected, which seems likely, he will have a free pass to ‘drain the swamp’ like he said he would. That border wall may be back on the table, if the GOP wins both the house and the senate.

Definitely gonna be interesting. The Democrats only have themselves to blame. Better go with Bernie and his army at this point. What will Mr. Bloomberg do?

#58 SoggyShorts on 02.05.20 at 10:49 pm

32 Linda on 02.05.20 at 7:11 pm
Even for those who can’t cook, a home-made sandwich and some soup in a thermos beats 95% of bought lunches.
The only downside is the prep time, so

We went a step further and bought a $200 meat slicer and a $200 bread maker. You could go(much) cheaper, but with a little practice we were able to make prep the bread maker at night in under 2 minutes(we timed it) and it was a fool-proof machine.

Buying an entire ham instead of sliced cold-cuts is 50-60% cheaper for some reason so that machine paid for itself pretty quickly too.

All around we were making sandwiches for a few bucks each week instead of $20 lunches.

Even if we ignore the $5k in savings each year waking up to the smell of home-made bread was worth it…

#59 CEW9 on 02.05.20 at 10:53 pm

#18 Smartalox on 02.05.20 at 5:38 pm

All good, except you would have to be a beneficiary, meaning you would get the money but it would not automatically be added to your TFSA. Successor holder designations are only for spouses, noone else. A successor holder TFSA is rolled into the successor’s TFSA upon death and maintains registered tax free status, no matter the controbution room.

#60 Felix on 02.05.20 at 10:56 pm

Such a gross photo – another useless canine raising its fist, about to attack an innocent child and steal her flowers.

#61 Sail Away on 02.05.20 at 11:32 pm

#46 Phylis on 02.05.20 at 9:01 pm
#27 Sail away on 02.05.20 at 6:39 pm
#2 Tater on 02.05.20 at 4:17 pm
#124 Phylis on 02.05.20 at 3:00 pm
#87 Tater on 02.05.20 at 8:15 am Ok i’ll bite. What happened that was interesting?
———————————————
I’ll give you a hint, 673.52 is now the key level on Tesla.

——————————-

Darn, it went down. I thought it would continue daily 20% gains forever. Better sell this dog.

——————————

Best i can figure is that you are implying a support level, but im not sure how the volume was important in that determination. Seems that sailaway supports your theory as he is thinking of selling. The bubble definition moment?

————————

Joking.. I am not thinking of selling. I am in awe of Musk’s intelligence, drive and ability to produce and will not sell this stock, probably ever.

#62 Jake Sakos on 02.05.20 at 11:34 pm

You want to see a sad event. TVO’s DIY pension, is it a good idea?

I have never seen such a waste of time and information about people that have limited to very little true knowledge, information, facts about money, retirement, investing and financial wisdom.

Most people are doomed if they watch shows and podcasts that are just like this one. I don’t know how people can live in such ignorance and false information.

#63 Sail Away on 02.05.20 at 11:41 pm

#48 TheUnhealthy on 02.05.20 at 9:08 pm

—————————

Yes, your portfolio includes all your holdings. The various accounts should be used to maximize tax efficiency, not full replication of 60/40 in every account.

#64 Steven Rowlandson on 02.05.20 at 11:44 pm

Bring back the penny and piggy banks. The more you get away from old fashioned things and virtues the worse things seem to get…..

#65 Long-Time Lurker on 02.06.20 at 12:15 am

#48 TheUnhealthy on 02.05.20 at 9:08 pm
I believe Doug touched briefly on the topic recently but I wanted to know what you and the team think about investment allocation regarding TFSA’s. I have been treating all of my investments in different accounts as one big portfolio. Preferreds, cad etfs, US etfs in my margin. Bonds, reits, international etfs in tfsa and bonds in RRSP. Any spillover gets put in what I believe to be the most tax efficient accounts. My question is have you, your team or anybody you know of calculated the long term outcome of holding more growth oriented assets(or even a 60/40) as a “separate” portfolio in a tfsa vs. one split amongst various accounts? For example: If someone has a million in assets, their tfsa and RRSP would only have bonds and/or reits. If they do a 60/40 in a tfsa, they lose out on foreign withholding refunds and pay their marginal rate on bond/reit income.
Hopefully this is less painful for you to read than me to write. My brain hurts. I tried to calculate for myself but it ended up being above my pay grade.
For what it’s worth. I knew nothing about finance the first time I visited your blog in Jan 2013. Everything I learned stemmed from here. Maxed TFSA’s(successor holder), tax deductible RRSP contributions, joint margin, maxed resp’s and the cardinal rule… it’s all noise. I initially invested immediately prior to “the fiscal cliff.” :). I may not be doing everything perfectly but my financial situation would be non-existent if not for you. Thank you! Really! Thank you!

>This might help. Try some searching.

Investing 101
September 27th, 2013 | Book Updates | E-mail this blog post to a friend

…Start with a TFSA. This is a gift from that peckerette, F, who for once in his life listened to me. You’re allowed up to $25,500 in there now ($51,000 with your spouse, and add another twenty-five grand for each kid over 18), and all growth is untaxed. That means it is a crime against nature to put TFSA money in a savings account, a GIC or a bond. This is where the higher-growth, more volatile parts of your portfolio go. The bonds should migrate to an RRSP, while stuff that churns out dividends belongs in a non-registered account…

https://www.greaterfool.ca/2013/09/27/investing-101/

#66 Scott on 02.06.20 at 12:35 am

@50
If all goes to plan i should have about 3 million in my TFSA when I retire, wife should have about 2. I can’t imagine any government will allow us to also collect full benefits (if any?).

In ten years they’re going to see that only lets say 3% or whatever number it is have TFSAs over a million dollars and they’ll realize that it’s too powerful. Surely there will be a few unicorns that achieved amazing returns. They’re already going after people. Just read one case where they’re claiming his income was of business nature and want to tax it. He made three buys a year of cannabis stocks from 2011 to 2016. He sold half of his gains and pulled out 500k. In 2019 they slap him with a tax bill saying he was an active trader or something like that. He literally bought five different companies once every few months over 6 years. I truly hope a judge laughs them out of the court house for trying to claim that was the activity of a day trader. The writing is on the wall, they’re not going to let people get rich and not pay taxes (even though you can totally do it the way the TFSA works, I love it!).

#67 SoggyShorts on 02.06.20 at 3:34 am

#48 TheUnhealthy on 02.05.20 at 9:08 pm
Retarding asset allocation location:

It’s actually really complex and the answer will vary based on your registered limits, investment horizon, and most importantly your tax bracket now and later.

E.g. conventional wisdom is to have bonds/interest/reit stuff in tax sheltered accounts so that you dont pay tax on those gains every year thus allowing for more compounding.
But
You may be looking at a very long investment horizon, so sheltering massive 40-year capital gains and dividends on equities in your tfsa sounds good too.
But
Perhaps you and your spouse plan to live on 70k worth of Canadian dividends which puts you in the zero percent tax bracket, again changing things.
Or
You are retiring very soon and plan to live off all distributions and dividends making their possible compounding effect irrelevant

Your situation is undoubtedly different, and that is part of the reason why at some point most should get professional help from someone like Garth. If you arent really into using advanced spreadsheets and factoring in a bunch of stuff it’s pretty easy for a professional to do it better than you can to the point where their 1% fee pays for itself in tax savings and/or portfolio growth.

#68 Andrew on 02.06.20 at 5:22 am

Bitcoin is primed for launch. Prepare your popcorn.

#69 Dave Soul on 02.06.20 at 5:39 am

My wife has $20 grand in unused rrsp room see but no income to claim in any tax filing, given that were both retired now. She’s only 51 and won’t collapse her RRSP until 71 in 20 years. Is there any sense or benefit in putting that twenty g’s into rrsp? TFSA is topped up. Anyone?

#70 Tater on 02.06.20 at 6:06 am

#27 Sail away on 02.05.20 at 6:39 pm
#2 Tater on 02.05.20 at 4:17 pm
#124 Phylis on 02.05.20 at 3:00 pm
#87 Tater on 02.05.20 at 8:15 am Ok i’ll bite. What happened that was interesting?
———————————————
I’ll give you a hint, 673.52 is now the key level on Tesla.

——————————-

Darn, it went down. I thought it would continue daily 20% gains forever. Better sell this dog.

—————————

NBD, just turned a 10 bagger to an 8 bagger in a day. Let’s see if it becomes a 7 bagger today.

Sitting with a bunch of trading sardines that you’ve mistaken for a meal.

#71 IHCTD9 on 02.06.20 at 8:06 am

#64 Steven Rowlandson on 02.05.20 at 11:44 pm
Bring back the penny and piggy banks. The more you get away from old fashioned things and virtues the worse things seem to get…..
___

We did that a few years back. Ended up with $13,500.00 in the “piggy” (don’t ask).

You wouldn’t believe the BS I went through trying to deposit that into our bank account…

#72 crowdedelevatorfartz on 02.06.20 at 8:22 am

….and now the bureaucratic nightmare of Brexit begins.

https://www.reuters.com/article/us-britain-eu-immigration/about-500000-eu-citizens-yet-to-apply-for-uk-residency-after-brexit-idUSKBN2001OR

This is just an inkling of the negotiations that must begin.
3 years after the whole Brexit debacle started and still nothing decided.
Customs, Duties, Trade tariffs, borders, guards, inspections, currency, cross border police investigations, international warrants, military agreements, on and on it will go.
Europe will drive a very hard bargain to warn off any other Brexit wannabies.

#73 IHCTD9 on 02.06.20 at 8:28 am

#51 DON on 02.05.20 at 9:59 pm
#23 IHCTD9 on 02.05.20 at 6:11 pm

#15 FreeBird on 02.05.20 at 5:33 pm
——-

We got the puffed wheat instead. Also cream of wheat, French toast, rolled oats, mashed potatoes, plenty o Hamburg, and all manners of canned and garden veggies.

I’m sure it was cheap, but I didn’t really appreciate having taste buds until I struck out on my own…
**************

What about the powdered milk?
__

We got the Homogenized 3.25%, and apple juice galore (must have been cheap back then too)

#74 crowdedelevatorfartz on 02.06.20 at 8:34 am

@#71 IHCTD9
“You wouldn’t believe the BS I went through trying to deposit that into our bank account…”
++++

Yep.
I tried depositing $1000 in one hundred dollar bills a year or so ago.
The 20 something idiot behind the counter started asking “where did this come from, how did you get so much money? blah blah blah.
Questions for a measly $1000…. when the banks were shuffling billions back and forth in shady real estate deals out here in the Lowerbrainland for at least a decade.
Unbelievable.

I said, “It’s none of your business where I got this. Gambling, working, selling lemonade, … it doesnt matter.
FINTRAC only requires me to fill out a form declaring the source of money if the amount is over $10,000.00 in cash. Do you want my money or do I deposit it at your competitor?” As I waved a debit card from the rival bank in her face.
Harrumph.
Deposit done.
All as I watched the teller beside her count out $3000.00 in large bills for some elderly customer…..

#75 maxx on 02.06.20 at 8:46 am

@ #3

“First, do you brown bag your lunch or do you purchase it? Second, do you bring a thermos of your beverage of choice to consume at work during the day, or do you purchase it? If the answer to the first 2 questions is ‘I purchase it’ my third question would be ‘how much does that cost you each day?’. Bet the answer would be at least $15-$20. There is the better part of your weekly TFSA contribution right there.”

Excellent post. Could not have put it better. A far greater cohort than 1%ers could be maxing TFSAs.

One of my favorite quotes is “There is no elevator to success. You have to take the stairs.” Saving and investing is like that. Discipline and persistence. Long term.

Sad thing is that people who fail at saving have all sorts of excuses, often with resentment thrown into the mix. They overlook the planning and effort it took. Every. Single. Day.

#76 Tom Sellman on 02.06.20 at 8:56 am

BANNED

#77 Sail Away on 02.06.20 at 9:10 am

#70 Tater on 02.06.20 at 6:06 am
#27 Sail away on 02.05.20 at 6:39 pm
#2 Tater on 02.05.20 at 4:17 pm
#124 Phylis on 02.05.20 at 3:00 pm
#87 Tater on 02.05.20 at 8:15 am Ok i’ll bite. What happened that was interesting?
———————————————
I’ll give you a hint, 673.52 is now the key level on Tesla.

——————————-

Darn, it went down. I thought it would continue daily 20% gains forever. Better sell this dog.

—————————

NBD, just turned a 10 bagger to an 8 bagger in a day. Let’s see if it becomes a 7 bagger today.

Sitting with a bunch of trading sardines that you’ve mistaken for a meal.

————————–

Awful investment. So contrite. Hope I never again choose a measly 8-bagger.

#78 IHCTD9 on 02.06.20 at 9:11 am

#42 Sold Out on 02.05.20 at 8:32 pm

The argument that I was making is that someone with $77,580 in income, from any source, doesn’t really need the $613.53 per month…
___

Governments don’t think like that anymore, just look at Trudeau’s CCB, 200-400+% more lucrative than OAS for many folks, and benefits extend to 6 figure income brackets where no one needs a penny of it. Wynne also wanted to give families making 6 figures free money to send their kids to post secondary too. She was thinking about handing out free daycare, which would have been a multi billion dollar bill directed to the Ontario taxpayer. Now we’re all going to be RE owners too via the Lib’s shared equity program. We all own a pipeline too, didn’t even get to vote on that one.

The OAS handout is just a little pc of litter caught in a hurricane of spending, almost all of which should have never happened.

Alas, that is the price of getting government involved in things they should not be doing. But we Canucks love it when our gov spends like a drunk sailor.

I’m glad I am married with kids and am an employee making “non-rich” wages. Everyone outside these confines in Canada are getting hammered left right and center – and it’s only just getting started.

The real secret is to stop handing out these freebies to folks in the first place. Mr T is right, they become “entitlements” the very next year, and Ryan L is correct that they are almost impossible to get rid of once they’re here – and they go up every single year.

I’ll say it for the 10th time – a bro and I have collected almost Two Hundred Thousand taxless Dollars in returned taxes and handouts combined since Trudeau hit the stage. MINIMUM

Guess what? We’ll get even more over the next 4.

That’s a lot more than OAS would pay us if we were retired.

#79 Howard on 02.06.20 at 9:25 am

#41 the ryguy – In cabo on 02.05.20 at 8:26 pm
#24 tkid on 02.05.20 at 6:19 pm
———————————–
Damn..those are brutal stories. I hadn’t even thought of that side of it…everyone is going into the hole. Peter Zeihan has a new book coming out in march, and I heard an interview with him a couple days ago. He was asked about the stability of China and he said something like “I have a whole chapter about China, but honestly its possible they collapse before my book comes out”. I’m sure that’s fairly facetious but it makes you think..what is it they say about how one goes bankrupt? Slowly at first and then very quickly.

———————————

Peter Zeihan is a must-read/listen. Very interesting insights. For instance, he’s longterm bullish on Japan but not China. Also longterm bullish on France but not Germany. His central theme, though, remains : Never bet against America. Can’t argue with that.

#80 IHCTD9 on 02.06.20 at 9:27 am

#74 crowdedelevatorfartz on 02.06.20 at 8:34 am
@#71 IHCTD9
“You wouldn’t believe the BS I went through trying to deposit that into our bank account…”
++++

Yep.
I tried depositing $1000 in one hundred dollar bills a year or so ago.
The 20 something idiot behind the counter started asking “where did this come from, how did you get so much money? blah blah blah.
___

They wanted me to do a “money laundering audit” with the branch manager. He was out, bank was almost closed, ended up depositing 1/2 that day, and 1/2 the next to get around it.

I have a bud who sold a car for 3K cash and got the same thing you did:

“Where did you get that money from?”

#81 Dharma Bum on 02.06.20 at 9:42 am

Every January 2nd, once the pain of the previous day’s hangover has sufficiently subsided, I pick up the phone, call my broker, and ask him to transfer $12,000.00 from our joint open account and split it into contributions to our respective TFSAs.
I then say Happy New Year.
Then, I don’t think about the TFSAs for another year.
Easy Peasy.

#82 Shawn Allen on 02.06.20 at 10:00 am

Fartz attacks WUL for stating a plain fact

#50 crowdedelevatorfartz on 02.05.20 at 9:35 pm growled a response to WUL

@#34 WUL
“I really tire of this “I’ve already been taxed on that $.”shit we get here in this comment section.

You have not been taxed on the gains. That’s new money.”
+++++

Spoken like a true socialist.

Well.
Look at it THIS way.
The money I RISK on investment was already taxed 25% BEFORE I decided to take a chance and RISK losing it on a bad investment.
Why should I be penalized AGAIN by paying taxes on the profit of MY money that I RISKED?

************************
So WUL is called a socialist for simply stating that the gains on investments have not yet been taxed.

Perhaps WUL should give it up. Mere logic and facts are no match for emotion and self-interest.

It would be nice if needed government services cost nothing. But they do have a cost and part of the price of living in Canada is to pay a portion of realized gains and income in income taxes. There is of course no rule that there should be no tax on realized gains or income made from taking a risk or even a RISK.

#83 Bezengy on 02.06.20 at 10:12 am

It’s just money folks, nothing to worry about.

https://torontosun.com/opinion/columnists/opinion-trudeau-sets-another-record-and-not-in-a-good-way

#84 Lessons A Cdn Hockey Player can Teach Donald Trump on 02.06.20 at 10:16 am

Don’t act like an A$$ when the national anthem is playing.
Remain standing until the anthem(s) finish.
Especially if you are President.
Especially if you have made a show of criticizing other’s behaviour during the anthem.

And Kansas City is in the show me state (Missouri) the once proud home of the Kansas City Scouts!

Yes the President had a helluva Sunday!

#85 Not So New guy on 02.06.20 at 10:17 am

Jordan Peterson’s new thinkspot site is starting to invite the regular public to their site. I think that would be a great place for you to contribute your views, Garth. You may not agree with his ideas but your economics lessons could help a lot of people

#86 crowdedelevatorfartz on 02.06.20 at 10:21 am

@#82 Shawn Allen
“There is of course no rule that there should be no tax on realized gains or income made from taking a risk or even a RISK.”
+++++++

Of course there is.
Its called the TFSA ….or did you miss that part.
A measly 6 grand a year we get to risk OUR money and the govt wants to claw that pathetic perk back

Socialists and their narrow minds…..only willing to live of the backs of people who actually work for a living.

#87 Linda on 02.06.20 at 10:31 am

#42 ‘Sold’ – Increasing OAS for lower income seniors sounds like a good thing. The only question is whether doing this would reduce incentive for those who don’t save money today to start saving money at all.

I find it rather ironic that there are suggestions that OAS should be increased given that it is completely paid out of taxpayer dollars. Isn’t one of the biggest objections to public pensions the fact that they too are taxpayer funded? So the real objection is not that those employees are receiving a pension but are receiving too much? What would then be considered fair? The amount all residents of Canada receive upon turning age 65? Now that sum is prorated to the number of years lived in Canada after age 18. If you haven’t lived here 40 years, then what you will receive from OAS is adjusted to the number of years actually lived in Canada. This is how parents & grandparents of immigrants who are brought over from their country of origin under family unification can receive OAS once they turn 65. All they have to do is live here. If for example they were 55 when they arrived, at 65 they could get OAS but it would be 1/4 of the full amount someone who had lived in Canada for 40 years would receive. The only increase after beginning it would be COLA so they would never get ‘full’ OAS.

So thoughts, anyone? Can anyone explain how they are against public pensions but for OAS? Is the difference that everyone can get OAS but only employees can get the public pension they contributed to? Also, if taking taxpayer dollars is bad, how can one justify taking OAS in the first place? Or working for an employer who is subsidized by taxpayer dollars?

#88 Shawn Allen on 02.06.20 at 10:50 am

Tax on Gains on already Taxed money

CrowdedElevatorFartz respoinded to me:

#86 crowdedelevatorfartz on 02.06.20 at 10:21 am

@#82 Shawn Allen
“There is of course no rule that there should be no tax on realized gains or income made from taking a risk or even a RISK.”
+++++++

Of course there is.
Its called the TFSA ….or did you miss that part.
A measly 6 grand a year we get to risk OUR money and the govt wants to claw that pathetic perk back

Socialists and their narrow minds…..only willing to live of the backs of people who actually work for a living.

*********************************
The TFSA is of course an exception to the general rule that realized gains on investments and income from investments are taxed. They are in fact taxed at lighter rates than regular income but they are taxed.

Calling people socialists for pointing out actual facts belittles you.

And are you are calling for no taxes on investments so that the ONLY taxes would be on income from people who actually work for a living?

#89 Barb on 02.06.20 at 10:57 am

“Alas, that is the price of getting government involved in things they should not be doing.”

—————————
Our small-town mayor mused during a council meeting whether Council should “approve Wal Mart coming to town.” (They did, of course, seeing the tax dollars).

Wayyyy too many bureaucrats.
Wayyyy too much government.

#90 Not Drinking on 02.06.20 at 11:07 am

Feel good story for dog lovers.

https://www.dailymail.co.uk/news/article-7973019/Owner-reunited-lost-dog-TWO-YEARS-beloved-pet-went-missing-thanks-Facebook-group.html

#91 Not So New guy on 02.06.20 at 11:09 am

They wanted me to do a “money laundering audit” with the branch manager. He was out, bank was almost closed, ended up depositing 1/2 that day, and 1/2 the next to get around it.

I have a bud who sold a car for 3K cash and got the same thing you did:

“Where did you get that money from?”

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

So when you deposit it, they don’t consider it yours and when it is in your account, they consider it theirs.

Sounds like a bank alright

#92 IHCTD9 on 02.06.20 at 11:13 am

#10 Michael on 02.05.20 at 5:01 pm
Hello,

Can someone please elaborate on the below point? Specifically the shifting of money over to the RRSP. I understand the benefits of both vehicles, but why would you take money out of your TFSA? and what money? Money you have made or money you have contributed?

“If you’re young and clever build a sizzling TFSA now, then shift some of that money over into RRSP later on where your career flowers and income jumps. Use TFSA tax-free growth to get a big tax refund when its slides into the RRSP. Smile.”

Thank you!
____

If you take an amount equivalent to the gains in your TFSA to feed your rrsp during bouts of high income – then you are taking money out that:

1. You never paid a dime of tax on at any point

2. You don’t have to add to your total taxable income after withdrawing it

3. Can themselves generate a big tax return on current earnings that you did pay taxes on via dumping them into an RRSP

4. Can then sit there in your RRSP earning even more tax free cash which then finally gets taxed only upon withdrawal during retirement decades from now.

Those TFSA earnings will have done a ton of work for you before they must finally give up and surrender to taxation.

I think the biggest smile is reserved for TFSA earnings alone due to their special and unique tax-free travelling abilities.

#93 crowdedelevatorfartz on 02.06.20 at 11:15 am

@#88 Swan twofirstnames
“And are you are calling for no taxes on investments so that the ONLY taxes would be on income from people who actually work for a living?”
+++++

Short version . Yes.
I’ve already paid taxes on the money BEFORE I risk it in investments.
It may go down in value.
Speaking of work.
Sorry but I have a crew of guys to deal with to earn the company money and their pay cheques, both of which are grossly taxed to pay for welfare, hospitals, police roads, etc…..
Gotta go and make some more money money money for you socialists to tax, sit back an whine about the unfairness of life and the big mean “rich people’

Brainless..

#94 Sail away on 02.06.20 at 11:18 am

#84 Lessons A Cdn Hockey Player can Teach Donald Trump on 02.06.20 at 10:16 am

Don’t act like an A$$ when the national anthem is playing.

Remain standing until the anthem(s) finish.

————————

Something like this, oh holier-than-thou one?

https://www.rt.com/sport/477045-canadian-player-helmet-russian-anthem/

#95 G on 02.06.20 at 11:28 am

Coronavirus – A Warning To Us All 10min
https://www.youtube.com/watch?v=AbuqmziQ28I

#96 LP on 02.06.20 at 11:36 am

#60 Felix on 02.05.20 at 10:56 pm
Such a gross photo – another useless canine raising its fist, about to attack an innocent child and steal her flowers.
*************************
Sigh. Only a cat would see the worst side of things. Ever the pessimist they.

#97 Sail away on 02.06.20 at 12:02 pm

#86 crowdedelevatorfartz on 02.06.20 at 10:21 am

A measly 6 grand a year we get to risk OUR money and the govt wants to claw that pathetic perk back
Socialists and their narrow minds…..only willing to live of the backs of people who actually work for a living.

———————————-

Fartz, after deep consideration, I think I might be a socialist.

I don’t do much work, but have created an environment for others to work for me. I live off the profit of their labour. When they work harder, I make more money off their backs without myself working harder.

When I invest in a profitable company with the non-working money from above, I continue to get richer from the labour of others.

Is that wrong?

Or is it right because these conditions allow others to get paid for meaningful work?

Such existential questions…

#98 april on 02.06.20 at 12:05 pm

a beautiful adorable picture…

#99 Sail away on 02.06.20 at 12:15 pm

#81 Dharma Bum on 02.06.20 at 9:42 am
Every January 2nd, once the pain of the previous day’s hangover has sufficiently subsided, I pick up the phone, call my broker, and ask him to transfer $12,000.00 from our joint open account and split it into contributions to our respective TFSAs.
I then say Happy New Year.
Then, I don’t think about the TFSAs for another year.
Easy Peasy.

————————–
Dharma,

Let me help you put $240 back in your pocket every year, and save immeasurably more over the long term:

Do all this without a broker in a self-directed account buying Garth’s suggested ETFs.

You are most welcome. Enjoy your extra money!

Do I get a karma credit?

#100 Captain Uppa on 02.06.20 at 12:24 pm

Jan GTA RE results are mucho bueno.

… uppa, Uppa, UPPA!!

#101 Lessons A Cdn Hockey Player can Teach Donald Trump on 02.06.20 at 12:55 pm

#94 Wish I could have placed a bet that you would be the first with a “hot take”.

Did you really just compare the behaviour of the US President to a 19 year old kid? Besides that kid had the decency to apologize.

Well to be fair, DJT oftens acts like a 6 year old…. he makes America proud.

Must admit Sailor, you make me miss Smokey. At least he was occasionally funny and showed signs of being aware of his delusions.

Good to know you are so easily triggered.

#102 Sail away on 02.06.20 at 1:34 pm

#101 Lessons A Cdn Hockey Player can Teach Donald Trump on 02.06.20 at 12:55 pm

#94 Wish I could have placed a bet that you would be the first with a “hot take”.

Did you really just compare the behaviour of the US President to a 19 year old kid? Besides that kid had the decency to apologize.

Well to be fair, DJT oftens acts like a 6 year old…. he makes America proud.

Good to know you are so easily triggered.

————————-

Triggered, eh? Back at ya.

Do you always stand solemnly in a pub when an anthem is played on TV? That’s what this was, by the way.

#103 TheDood on 02.06.20 at 1:46 pm

#5 Big Bucks on 02.05.20 at 4:30 pm
In all honesty ,do you really believe the government will allow a couple to make $80,000.00 a year in retirement and pay no tax on that amount?Supertramp sang it best….Dreamer…nothing but a dreamer…
_________________________________

Well, if a couple is smart enough to build an 80k tax free income, they’re smart enough to know there are nicer, warmer, cheaper places to retire. If you’re not living in Canada, the government can’t tax you.

You don’t think so? – Garth

#104 Shawn Allen on 02.06.20 at 1:48 pm

Retiree put $20k in RRSP?

#69 Dave Soul on 02.06.20 at 5:39 am
My wife has $20 grand in unused rrsp room see but no income to claim in any tax filing, given that were both retired now. She’s only 51 and won’t collapse her RRSP until 71 in 20 years. Is there any sense or benefit in putting that twenty g’s into rrsp? TFSA is topped up. Anyone?

*************************************
Probably not. Depends on her marginal tax rate now. It sounds like her marginal tax rate could well be higher at age 71 than now. Perhaps considerably higher with CPP, Old Age pension and the income from any already existing RRSP. (And if she is into the old age pension clawback, the marginal tax rate is bound to be a lot higher than today).

If the marginal tax rate is not at least 30% today then forget about it.

It won’t be so bad if her marginal tax rate today is say 30% and it is say 33% on withdrawal. But if her marginal tax rate jumps like 10% or more it the government will end up thanking you for putting that into RRSP.

Put it into taxable account with Dividend stocks and and get tax advantaged on the dividends and no tax on capital gains until realized at a time of her choosing.

#105 IHCTD9 on 02.06.20 at 1:49 pm

So I wonder what single, well educated, biz and high earning peeps think of their prospects in Canada?

Right now, 40 % of Canadians do not pay net income taxes, and the top combined marginal tax rate is 50+% in most Provinces.

The cost of education and daycare for kids are constant beefs, and we should expect more credits and handouts for parents (only) coming down the pipe, and higher taxes on everyone else to pay for it.

Trudeau’s version of “helping kids”, the CCB is well documented as a gold mine of tax free cash – but for parents only. It’s an absolute horror show – 5 figure cash injections all over the place. Thanks to the CCB a divorced single parent with 3-4 kids, between alimony, child support, and CCB will not even need to work – but will still net more than double the single earner median income in Canada.

Married couples have numerous benefits and perks they can employ to reduce taxes, increase the bang of their investments, and have a lower cost of living per head to boot. Single guys ‘n’ gals have to get taxed with no sanctuary.

Meanwhile, contractors, business owners and high single income earners can expect to require a Kevlar vest just to show their faces outside before too long. Trudeau keeps saying these folks are screwing the system, and that they’re not paying their fair share. Morneau keeps chomping at the bit to take away their “perks”, and Canuck voters are more and more falling in right behind him. It’s definitely coming.

In the wake of half the country paying jack for taxes and higher earners getting soaked over and over, we now have the spectre of Canucks willingly voting for record breaking 12 figure deficit spending per term.

Looks like families won’t be paying it. Neither will poor folks.

Guess who’s sporting the luminescent red dots?

#106 Shawn Allen on 02.06.20 at 1:52 pm

Fartz calls me a socialist and a poor one at that…

At 93 he said…

Gotta go and make some more money money money for you socialists to tax, sit back an whine about the unfairness of life and the big mean “rich people’

Brainless..

**************************
I dare say I’m richer than he thought.

#107 kommykim on 02.06.20 at 1:55 pm

#32 Linda on 02.05.20 at 7:11 pm
#15 ‘Free’ – to be fair, a lot of people these days have little or no cooking experience. So brown bagging it may not be that easy until they gain some.

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

Where do people get this idea that a hot lunch is an absolute requirement? If you can make a sandwich, you can make your own lunch!

#108 just snoozin' on 02.06.20 at 2:04 pm

Well, if you can’t be rich, then be poor. But don’t ever be ‘middle class’. The rich and the poor lead dynamic and interesting lives. They are individuals who have stories to tell. The middle class existence is entirely based on consumption, killing time until death. The rich and the poor party together—they change the world together. The middle class sits at home wondering why no one calls.

#109 Shawn Allen on 02.06.20 at 2:08 pm

Retiree put $20k in RRSP?

#69 Dave Soul on 02.06.20 at 5:39 am
My wife has $20 grand in unused rrsp room see but no income to claim in any tax filing, given that were both retired now. She’s only 51 and won’t collapse her RRSP until 71 in 20 years. Is there any sense or benefit in putting that twenty g’s into rrsp? TFSA is topped up.
Anyone?

Oops, you said she has no income now. In that case probably a very bad idea indeed to put it into RRSP. Unless her marginal tax rate is going to stay at zero at age 71 (horrors). In that case it actually is okay. But given the risk she has a much higher tax rate at age 71, I’d say don’t do it!

#110 LP on 02.06.20 at 2:11 pm

If you take an amount equivalent to the gains in your TFSA to feed your rrsp during bouts of high income – then you are taking money out that:

1. You never paid a dime of tax on at any point
****************************

You’ve confused me. The original money in your TFSA, pre-growth, was already taxed at source before you got it. The growth has admittedly never been taxed. By transferring any amount from your TFSA (both initial investment plus growth) to a different tax-attracting instrument aren’t you then going to pay needless tax when it’s withdrawn? Will CRA differentiate between the growth and your initial deposit to the TFSA?

I’m obviously over my head here so some education would be appreciated.

All money – original contributions and growth within a TFSA – can be withdrawn without it being a tax event. The funds can then be invested in a non-registered account, into an RRSP (to get a tax refund) or re-invested inyo the TFSA in the following calendar year. – Garth

#111 G on 02.06.20 at 2:15 pm

Coronavirus Epidemic Update 10: New Studies, Transmission, Spread from Wuhan, Prevention (2019-nCoV) 13min (feb4th)
https://www.youtube.com/watch?v=gPwfiQgGsFo&t=1s

#112 Attrition on 02.06.20 at 2:19 pm

I’m not one for conspiracies theories…shoot, yes I am.

So here’s one for you: anyone happen to hear anything lately about the Hong Kong riots/nascent revolution?

In case you forgot, it was going to be the beginning of the end of China? It was going to spread like wildfire through the communist state…put the global economy and the lives of the communist elite at risk?

I was going to ask if anyone else noticed how the arrival of the novel corona virus (a virus, like thousands of others, that causes a nasty cold or mild flu-like symptoms in 99.9% of cases) suddenly made everyone forget about the Hong Kong riots.

Novel indeed.

#113 G on 02.06.20 at 2:32 pm

Coronavirus Epidemic Update 12: Unsupported Theories, Pneumonia, ACE2 & nCoV 10min Feb6th
https://www.youtube.com/watch?v=GT3_A1bf9pU

#114 LP on 02.06.20 at 2:37 pm

But when it comes OUT of the RRSP, it will be taxed (again) right?

Yep. – Garth

#115 kommykim on 02.06.20 at 2:42 pm

RE:#69 Dave Soul on 02.06.20 at 5:39 am
My wife has $20 grand in unused rrsp room see but no income to claim in any tax filing, given that were both retired now. She’s only 51 and won’t collapse her RRSP until 71 in 20 years. Is there any sense or benefit in putting that twenty g’s into rrsp? TFSA is topped up. Anyone?

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

The RRSP can allow her to have tax free growth just like a TFSA with a few caveats:

It assumes her marginal tax rate will be the same upon withdrawal as when she contributed and that she invests the refund as well. ie: In her case, her income including RRSP/RRIF would have to be below her basic personal exemption. She’d get no refund growth to offset future taxes.

That the RRSP withdrawals do not trigger OAS/GIS claw-backs.

So the only way I see this working is if she contributes the 20K lump now and then withdraws less than 11K a year (maybe starting at age 58 or so depending on growth) before she starts collecting OAS/CPP/GIS at age 65. But this all goes to hell if you are already claiming her personal exemption to mitigate your own taxes or are pension splitting. It is probably not worth the hassle and the risk that she may need to money out in a large lump sum that would trigger taxes.

I think it would be better for her to have her 20K of investments in a taxable account because she won’t earn enough capital gains (ETFs throw those out yearly even if you do not sell) or dividends to pay any tax anyway if her other income is zero. Makes taxes a bit more complex, but it’s not that bad.

#116 Linda on 02.06.20 at 3:19 pm

#107 ‘Kommy’ – never underestimate how clueless some people can be in the kitchen. True story – I once had a room mate who was so inexperienced in kitchen knowledge that she (yes, she!) put an electric plug in kettle on the stove & turned on the stove to heat the water. She also believed the fridge thermostat had to be on the highest setting, as I discovered one morning when I went to make breakfast. The raw eggs were frozen solid, as was the rest of the food in the fridge. She did eventually learn to cook simple stuff, but the adventures along the way while she learned the basics (like how to make a sandwich) were more exciting than you would think:)

#117 David Soul on 02.07.20 at 12:03 am

#115 Kommykin, you’re a champ, thx. I started drawing down my own rrsp incrementally way early on the advice of my accountant. I bought stocks that appreciated tax free because no crystallization yet, and dividend tax treatment. I’ll do the same with my wife’s 20 grand. Good ideas all. Good luck.