Canadian Personal Finance Blog

So today I had an excellent presentation about the financial aspects of my severance from my employer, by a C.A. who is also a Financial Planner. He brought up several very interesting points, one that I had heard about but didn’t understand and another that I wasn’t even aware of (and caused me to write down many more questions for my one on one session with him in the near future).

RRSP Severance Rollover

Up until 1996 the rules for moving severance packages into RRSPs was pretty wide open, but then in 1996 the rules changed and you were not allowed to simply plow your severance directly into your RRSP (if you didn’t have room to put the severance allowance in your RRSP). The accommodation for folks like me that were still employed (and have been) by the same employer before 1996 (and haven’t received a severance package), I get a $2000 per year RRSP “bump up” for every year I worked for my employer before 1996 (and working in the year, could entail only 1 days work, too bad I didn’t work there as a Co-Op student).

For me this means that since I was employed from 1988 to 2008, I get 8 years counting in there or an RRSP bump up (for this one time) of $16,000 which I can put some of my severance package in (which is a good thing).  Since it is so late in the year, any dollar I shelter most likely saves me 46 cents of taxes I don’t have to pay on this year’s CRA tax forms (sorry Mr. Harper).

Severance Income is the Worst Kind of Income

Well, if there is such a thing as bad income, a severance package is that, because you get a T-4A for this income, but this income will not increase your RRSP room for the year, and it is not really counted as income per say (other than the fact that it gets TAXed like it is income). What I am trying to say is that severance is not an EARNED Income, thus you don’t pay CPP or EI premiums against it, but you don’t get RRSP room for it either.  I didn’t know that one either.

Another Idea the Lifelong Learning Program

Instead of simply cashing in RRSPs to pay for going back to school, the government has set up the Lifelong Learning Plan (LLP) where you can withdraw $10,000 in a  year and $20,000 total over 4 years to help pay for your schooling. There are rules for you to repay your RRSP the amount you borrowed to pay for your education, but I thought this would be a really good idea (for me or my wife). I don’t think this is something I will use now, but it is an interesting concept.

Best Joke to Say Around Former High Tech Workers

The presenter had a great comment for the section we skimmed over, “So this should be a short section, it’s about what to do if you make profits on your stock options during your severance period…”, everyone in the room burst out laughing, as did the instructor. If you aren’t in High Tech, you might not get it, but if you saw the Simpsons episode where it showed a high tech company giving out Stock Options from a toilet paper roller, you might get the joke.

I learned a lot today.

Consumer Price Index at 3.4% for July

All I can say is “Uh Oh”, with the CPI numbers for July
being released by Stats Canada.

July saw the highest 12-month increase since March 2003. A climb in gasoline prices was the primary source of higher consumer prices in July. The 12-month variation in the Consumer Price Index (CPI) and the gasoline price index have been increasing at a faster pace over the past four months.

Inflation without gas prices included in it, is at 2.1%, which isn’t as bad, but it is still startling to see these numbers jumping up like this.

On Going Consumer Price Index Graph

This means other prices are going up but not as dramatically, but this is very worrying and I wonder what the Bank of Canada may do about this? Gas prices seem to have plateau’ed for now, but what is going to happen this fall?

More information after the BIG table

Leading Indicators Remain Flat

The composite leading indicators remained unchanged for another month, for July. This is the second straight month this is happening, but the actual results are quite mixed. The Housing Index seems to be the biggest drop and is the heaviest anchor keeping the index from rising (which is a good thing, I think), and New Orders in manufacturing is up too (i.e. people or companies are buying more).

Humor: And You Can’t Even Rely On Teenage Sex Either!

Yup Stats Canada put out a study that says that Teenage sex in Canada is on the Decline.

In 2005, 43% of teens aged 15 to 19 reported that they had had sexual intercourse at least once, down from 47% in 1996/1997.

The decline was due to young women, among whom the proportion who reported having had sexual intercourse fell from 51% to 43%. The proportion of young men who had had intercourse remained unchanged at 43%.

After doing the simple math in my house, I am going to go ground 2 of my three daughters!!!

Like most folks the Big Cajun Man is taking today off to enjoy his holiday, but tomorrow look for some interesting news that will most definitely change the tone and the flavour of the content on this blog.

Please also enjoy the Carnival of Catastrophic Financial Advice as well, it was one of the better posts for a while, and I was very grateful to the other bloggers who chipped in with stories, and ideas.

Yup that really is me in this picture too!

I'm A Human Cannonball Y'all!