Retirement & Debt - do they mix?
Recently I have worked on a few retirement plans where my client is ready to retire but their debt hasn't been retired yet. Having debt going into retirement can complicate a retirement plan and create pressure on goals and objectives and most importantly CASH FLOW.
A recent Manulife Bank survey shows that 84% of homeowners considered being debt-free a high financial priority. 43% have credit card debt that they do not repay in full each month. 65% have two or more separate debts outstanding and could benefit from consolidation. (1)
There are some things that you can do if debt is getting you down:
1) Talk to your advisor, your debt is part of your overall financial health.
2) Shop around - for mortgage interest rates, credit card interest rates
3) Debt consolidation if you have more than 1 debt.
Retirement planning that's started early can help clients to avoid being 'stuck' when they retire. Being debt free is a goal most of us work hard to achieve!
Please link to BBN video with Canadian Economist discussing the state of debt in Canada
http://watch.bnn.ca/#clip432885
(1) Source: Survey of 1,000 Canadian homeowners aged 30-55, conducted by Research House on behalf of Manulife Bank, April 2010.
Tips for Preparing your Personal Tax return 2010
It's that time of year again...
It's important to provide you tax planning professionals with the information that they require to complete your taxes. Here are a few important things to keep in mind for this year:
1. Claim your credits (personal):
Children's Fitness Credits
First Time Homebuyers Credits
Pension Income Splitting Credit
Public Transit Tax Credit
Tradesperson Tools Credit
2.Claim your credits (business):
Computer Capital Cost Allowance
Apprenticeship job creation tax credit
Investment Tax credit for child care spaced
Small Business deduction
Corporation tax rate reduction
3.Travel Expenses: Deductible travel costs include hotels, airfare, taxi's, car rentals, parking fees, tips.
4.Medical Expenses.
5.Electronic Filing: Submit your return electronically. Simple & Secure.
6.Record keeping: If you haven't already, make your life simpler by setting up a record keeping system early and making sure it's updated.
7.Deadlines.
8.Stay Connected: CRA provides email communication as well as Twitter, RSS, and Youtube videos to stay on top of all your tax needs.
For more information on your taxes please contact your accountant or you can also checkout CRA's website at www.cra-arc.gc.ca.
Highlighting Flow-Through shares
Most people think of taxes when they have to but planning for your taxes should start early. Most people finished scrambling for 2010 tax deductions in the past couple months, for example, by adding more to their RRSP's. Investing in RRSP's isn't the ONLY way to save tax. Investing in Flow-Through shares is another option to getting a tax deduction and buying them early in the year (versus at the end) can often mean that you can acquire those shares for less than at the end of the year.
Flow-Through Shares are shares of an issuer which permit the initial purchaser to claim a deduction up to the amount of the share subscription price against their income. This deduction will dramatically reduce your risk associated with an investment in flow-through shares and can help to manage your taxes.
Flow-Through's can also benefit your Corporation. Individuals are not the only persons who can purchase flow-through investments. Corporations can also derive a great tax break. Purchasing Flow-Through's as a Corporation can be especially beneficial if you have a capital loss carry forward. Another benefit is that upon disposition of the shares there can be a capital gain, and 1/2 of this gain will increase the corporation's capital dividend account. Corporations can use a positive CDA to pay out tax-free dividends to it's shareholders!
We offer a variety of Flow-Through Share investment options through our Exempt Market Dealer, Wealthspark.
Click here to learn more.
Flow-Through shares are not for every investor. Investment objectives, timelines, and risk tolerance will be used when determining suitability.