Archive for the ‘Opinion’ Category

RRSP Spectacular!

The deadline is looming and Canadians still ponder about whether they should put more money into their RRSPs?

When is the Deadline? According the to TD Waterhouse web site the deadline is Midnight on March 1st (so you get an extra banking day) for contributions to count on last year’s income tax. So you still have plenty of time to ponder this.

A useful tool for this exercise is Quicktax’s RRSP scenario tester (it’s too bad no one gave away copies of that software, too late from me, but other bloggers still are giving out copies). I will announce the winners on Thursday morning (as you can tell I write the day before usually).

If you really want to “last minute” it, you can do it on line, but I won’t be doing anything like that, since my income was lower last year, I am in a lower tax bracket (for the first time in 20 years), so I will save any RRSP room for next year’s taxes (and instead take advantage of my TFSA to put any extra money in).

Haven’t opened an RRSP yet? Maybe it’s time to think about doing that, but this might not be the best time to do it, given the crush of folks trying to make last minute payments (but then again, I went to my bank yesterday and it didn’t look too crazy (yet)). I would suggest a self-directed account is the best place to put things, but remember that those accounts typically have a hefty yearly charge if you don’t carry a minimum amount in them (I forget that sometimes, given my accounts are above those levels).

What should you invest in? That’s not my call, I can only say that if you aren’t sure if you have a self-directed RRSP you can “park” money in there (simply deposit it) and then figure out what to invest in later. Hasty decisions now could mean unwanted consequences later, so keep that in mind.

Where is my T4?

Your employer should have sent you your T-4 by now as well. They have until March 1st to get it to you, so don’t forget that you really need that to correctly fill in your tax forms. I received 1 of the 2 I should receive, however my former employer’s info is still not received. This will hopefully show up this weekend and then I can submit my returns and be done with this.

T2202A Receipts

I checked with my daughter about the receipts I should receive from her University for tuition payment and I was not happy to see that they leave this all up to the student to collect. It used to be they mailed those to your home address, however now, the burden is on my child to go to the correct web site, and print out a copy of the receipts and send them to me, so I can get my taxes done.

This does save the university a great deal of time and money not having to mail these out, but getting my daughter to collect this data for me, is going to be no easy feat for me.

A very busy weekend for all of us and for me in particular:

1. The Winter Olympics started on Friday night, interesting to see the “Winter” Olympics in a city with no snow and it is 10 Celsius, oh well.
2. Valentine’s Day, but we have talked about it’s significance to Personal Finance
3. The Chinese Year of the Tiger began, and my question is, is it a tradition with the Chinese New Year to make resolutions? Happy New Year!
4. My parents celebrated their 58th wedding anniversary, which is the most significant part of the weekend.

In the coming week there will be lots more interesting things happening:

• It is “Family Day” in Ontario and lots of folks have today off, I don’t being a Federal Employee.
• Lent begins on Wednesday, an excellent time to start a new Personal Finance adventure.
• Stats Canada announces their Inflation numbers for January on Thursday.
• Shrove Tuesday means you should also get out and have some pancakes too!
• RRSP and Tax Season continues on

Tax Season

I await the delivery of most of the documentation I need to complete my taxes. I know that this year I will actually be getting tax back (at least that is my guess, I might be wrong), so I am eager to get my taxes submitted (electronically). For those who have RRSP room, or extra cash, they should be weighing the decision about whether to put their money in a TFSA or into an RRSP (or a spousal RRSP), which makes this season stressful as well.

There are some excellent articles out there comparing and contrasting whether you should be using an RRSP for your long term savings goals or a TFSA, and I encourage you to read other financial blogs and articles to figure out what decision is best for you (my guess is this is a personal decision, and there is no real “cut and dry” decision point that everyone can use).

Your T-4’s should arrive some time soon, but make sure you know what forms you will need for your taxes as well.

The Go Go 90’s

Frontline on PBS has an excellent video about someone who tried to cry Wolf, before the great melt-down. The lady who said Greenspan was wrong.

Time to get your collective brooms out and sweep out your investments.

As a start of year/end of year task I went through my many investment accounts (boy I really do have a lot of those, holy cow), I noticed that I had a lot of investment vehicles that I should really just eject from my portfolio. Why was I keeping them around? Some of the odd reasons I think were in my mind were:

• They might actually rebound sorry Charlie, that boat has sailed for these stale leftover investments (some from the tech boom), so that is not a good reason.
• They seem to be paying OK dividends might not be a bad reason, but then again, if I looked at the MER on these Mutual funds, I was paying other people a lot of money to get these dividends.
• I’m a lazy sod who just won’t admit when he is wrong I believe we have a winner!

What were the nature of this financial clutter?

• Two AGF Mutual funds that plodded along but had absurd MERs on them
• Some left over Cisco stock that used to pay out, but still has not got back to where I bought it some 10 years ago
• A crappy TD bond mutual fund that was useless as well

Took all the proceeds from those sales and bought a Dividend ETF, unfortunately the losses cannot be taken advantage of, since they were in an RRSP. Should I be buying Dividend devices in an RRSP? Some say no, I like dividends, so that is what I did.

Still have a few Nortel shares hanging around, not sure what the heck I can do with those, guess I have to “sell” them to incur the loss which I can then use next year. Is this right? Any comments on this appreciated.

I will neither confirm nor deny that my birthday may or may not have or will occur in the past or next few days, however, I will confirm that my age is in between 30 and 75. Having been crystal clear on this point (no, you should not be publishing on the web your birthday and year, since that is the start of someone stealing your identity or something of the like), let’s talk about the things you might do if your birthday anniversary is some time this year (which I hope it is).

Things to Do Financially on Your Birthday

Just some ideas for some of the financial things you can do on the anniversary of your birth:

• Are you old enough to retire? Seems like a straight forward question, but when can you retire is another question to ask if the answer to the previous question is No? If you can’t even guess when you can retire, then today would be a good day to figure it out, or at least make a guess and work towards it. Aim to retire at 61, that’s an interesting prime age.
• Can you take today off today? Some companies actually give you your birthday off as a vacation day, I think it would be good to know that one (nope, not in my case).
• You can get free meals at some restaurants, I think Denny’s is one of those places, but call around and see where you can eat for free. Free meals is a very good way to celebrate a birthday.
• Does my car registration need to be renewed? Ottawa has an interesting problem because if you don’t renew your registration by your birthday, and take your car to Quebec, you can get fined a LOT of money, because in Quebec they’ll fine you for that one (I think they do in Ontario too, but they don’t worry about it too much until the next month).
• Did your car driving license expire? I was surprised that one year I realized a month after my birthday that I had been driving with an expired license, I received no reminder in the mail. Luckily I was not pulled over or that might have been expensive.
• Has your life insurance premium just jumped? If you have crossed an age group, your term life insurance rate may be increasing, so go check that out.
• Can you get a senior citizen’s discount now? You’d be surprised, a lot of these discounts do not start at age 65, it actually starts at 55.

Any other ideas I may have missed that you should do on your birthday?

In Carnivals my posting Personal Finance Resolutions For the New Year? was mentioned in the Carnival of Personal Finance #239 and the Carnival of Money Stories.

So we start the second decade of the new century and the new millenium, so it is an exciting day today, that is for sure. It is astounding to think that the first decade of the 21st Century is over, but it is and time continues to speed up in my life rather than slow down.

I am very thankful for all the amazing things that have been given to me in the year 2009.

• A new career start
• A new niece
• Good Health
• Good Friends

My life has always been blessed and this year was another great year for me.

What comes for 2010? I have no idea, but I pray it is a good one.

Happy New Year 2010!

Man that was a tiring year