@@canadianmoneyroadmap Thanks for the Great content 👍Could you please explain if we want to make a will n put all of our possessions including the house we're living n give them all to our kids after we pass it's better to use beneficiary in the will or successor holding,so they don't need to pay capital tax for the home or TFSA investment. Greatly appreciated 🙏
If you are a lower income earner or even moderate focus on TFSA if you have limited funds to invest.If your income will be low going into retirement TFSA will be huge for income tested benefits.
thanks for watching and subscribing! It's a bit nuanced since you can't transfer from an RRSP to a TFSA without paying the taxes to get the money out of the RRSP. And many Canadians don't have enough saved (RRSP or TFSA) to have a sustainable income in retirement. So pre-paying the taxes by making an RRSP/RRIF withdrawal might not be worth it because the taxes deferred could have grown by more inside the RRSP/RRIF than the smaller amount growing in the TFSA. So it all depends on your situation but that being said, it can be a very common strategy for people to do throughout their retirement years.
Thanks for watching Fred! I hope it was slightly more engaging than reading tax bulletins on CRA's site though :) Fortunately, all the information about legal financial planning is all available for free online. Making UA-cam videos about those topics just makes it easier to digest for the average person. The best part about TFSAs is that there aren't a lot of complexities if you're familiar with how they work. The challenge is that the vast majority of Canadians don't have any understanding of how they work so the feedback I've received is that info like this is important to hit home.
Mutual funds and ETFs are just different structures of pooled investments. Either one can be passive and cheap OR active and expensive. There are PLENTY of nightmarish ETFs out there that are very expensive and don't resemble any sort of index fund. The structure doesn't define the investment philosophy, implementation, or cost.
@@canadianmoneyroadmap It is called research,lots of bad ETFs and Mutual funds.People need to read and use their God given brain and stop drinking the kool aid .A quality low cost ETF used by a DIY investor will be miles ahead of Mutual fund + CFP in retirement,not even close!
@@canadianmoneyroadmap ETF that is practically not managed and have low fees. VFV, XQQ. Or shares. For example, Royal Bank share is now 170 something and I purchased some of it at 80 and there is a good dividend. If all this is done in the TSA no taxes and there is capital appreciation. RBC shares are fairly safe and will not go down. If they do go down it means the whole Canadian economy goes down. That’s why they are fairly safe. Then you sell as many such shares or ETF units that you need during the year every month or every three months or six months and no need to pay fees to those greedy investment managers
Yeah, just terrible that one would have a lot of money invested in a RRSP. Much better if its next to nothing so one pays less tax. That will show the government who is smart. lol
If your main goal is to be financially secure in retirement, use every tool available to make it happen. Plan for a baseline of you being taxed on your RRSP divestment income, and then also be investing in low cost indexes in your TFSA to supplement/exceed what you need/want. It's way easier if you start early.
For example my son makes over 120 grand a year,so he will max his RRSP first then TFSA.I also advised him not to get his RRSP to big as he gets older,there needs to be a balance I am 64 have maxed out TFSA since the start plus some RRSP and non reg. account.I will leave my TFSA last in retirement,chances are i wont need it,so my sons will probably get it.
So its better not to have a lot on money in your RRSP to avoid paying more tax in retirement? Yeah, better to make nothing. lol Ever think that perhaps if his RRSP is very large, he would have an option to perhaps retire early and start withdrawing it??
The best tool of all is borrowing money to invest and writing off the interest payments. If you are at the highest tax brackets you are paying 48% of your income in tax. This means a 7% interest payment is actually 3.5%! You can float 100k for only 3.5 k a year. This will make you rich but no planners talk about it! Why? Most planners think that their clients can’t handle leverage… unless it’s their house. Crazy.
Some people can handle leverage and use it appropriately but this would be the exception instead of the rule. Lots of risk and nuance with leverage. Based on my experience working with real people there's no way I would go on a public platform to recommend it to the general public. **Also note for anyone reading this comment that you can't deduct the interest if you're using the borrowed money to contribute to a registered plan like an RRSP or TFSA
@ sadly - it’s an unused tool for higher income earners. Back in the 1990s my father co-signed my first interest only loan with a bank. The loan being used entirely to invest in blue chips, mutual funds, ETFs. It put 300k immediately into investments and I have never looked back. It’s now worth over 2 million, not counting all the write offs and money I used for a down payment on a home in Vancouver. Best thing I ever did financially. Cheers
The TFSA is so magical. SO many great ways to use it. Thanks for the video.
It really is! Thanks for watching
@@canadianmoneyroadmap
Thanks for the Great content 👍Could you please explain if we want to make a will n put all of our possessions including the house we're living n give them all to our kids after we pass it's better to use beneficiary in the will or successor holding,so they don't need to pay capital tax for the home or TFSA investment.
Greatly appreciated 🙏
New subscriber,thank you for your clear explanation,greatly appreciated 🎉
Glad it was helpful! Thanks for watching
It is important to know that any withdrawals from your TFSA can be redeposited the next year after Jan. 1. So awesome.
Thanks. Excellent presentation. Appreciate it very much.
Thanks for watching!
very concise. well done!
Thanks for watching Rob!
I plan on retiring early, so RRSP first till its depleted then TFSA, lets goooo
Put your RSP refunds into your TSFA . Don't let that tsfa sit without compounding.
@@heyyou2104 I meant as my draw-down strategy in retirement, but ya, I get you. TFSA and RRSP is always maxed.
You should do the opposite actually
You might consider withdrawal from both to keep your income in a lower tax braket
If you are a lower income earner or even moderate focus on TFSA if you have limited funds to invest.If your income will be low going into retirement TFSA will be huge for income tested benefits.
Interesting!
New subscriber.
Is it worth moving money from an rrsp to top up your TFSA?
Yes,depends on your income and age.
thanks for watching and subscribing! It's a bit nuanced since you can't transfer from an RRSP to a TFSA without paying the taxes to get the money out of the RRSP. And many Canadians don't have enough saved (RRSP or TFSA) to have a sustainable income in retirement. So pre-paying the taxes by making an RRSP/RRIF withdrawal might not be worth it because the taxes deferred could have grown by more inside the RRSP/RRIF than the smaller amount growing in the TFSA. So it all depends on your situation but that being said, it can be a very common strategy for people to do throughout their retirement years.
Is it common for Canadians to have about $500,000.00 in RRSP at retirement?
I would say yes it is common but it wouldn't be the average
very nice presentation and manner
✌🏽
however all this info is
on basic cra site at layperson level
was hoping for some more tips
or unknowns
Thanks for watching Fred! I hope it was slightly more engaging than reading tax bulletins on CRA's site though :)
Fortunately, all the information about legal financial planning is all available for free online. Making UA-cam videos about those topics just makes it easier to digest for the average person.
The best part about TFSAs is that there aren't a lot of complexities if you're familiar with how they work. The challenge is that the vast majority of Canadians don't have any understanding of how they work so the feedback I've received is that info like this is important to hit home.
No Mutual funds-ETF's all the way or individual stocks.
Mutual funds and ETFs are just different structures of pooled investments. Either one can be passive and cheap OR active and expensive. There are PLENTY of nightmarish ETFs out there that are very expensive and don't resemble any sort of index fund. The structure doesn't define the investment philosophy, implementation, or cost.
@@canadianmoneyroadmap It is called research,lots of bad ETFs and Mutual funds.People need to read and use their God given brain and stop drinking the kool aid .A quality low cost ETF used by a DIY investor will be miles ahead of Mutual fund + CFP in retirement,not even close!
@@canadianmoneyroadmap
ETF that is practically not managed and have low fees. VFV, XQQ.
Or shares. For example, Royal Bank share is now 170 something and I purchased some of it at 80 and there is a good dividend. If all this is done in the TSA no taxes and there is capital appreciation.
RBC shares are fairly safe and will not go down. If they do go down it means the whole Canadian economy goes down. That’s why they are fairly safe.
Then you sell as many such shares or ETF units that you need during the year every month or every three months or six months and no need to pay fees to those greedy investment managers
The government loves when you have a large RRSP in retirement,it often means a huge tax grab for them,be smarter than that with your money.
Yeah, just terrible that one would have a lot of money invested in a RRSP. Much better if its next to nothing so one pays less tax. That will show the government who is smart. lol
Well, I’m hoping to just retire younger. Hopefully, my RRSP allows that.
If your main goal is to be financially secure in retirement, use every tool available to make it happen. Plan for a baseline of you being taxed on your RRSP divestment income, and then also be investing in low cost indexes in your TFSA to supplement/exceed what you need/want. It's way easier if you start early.
For example my son makes over 120 grand a year,so he will max his RRSP first then TFSA.I also advised him not to get his RRSP to big as he gets older,there needs to be a balance I am 64 have maxed out TFSA since the start plus some RRSP and non reg. account.I will leave my TFSA last in retirement,chances are i wont need it,so my sons will probably get it.
So its better not to have a lot on money in your RRSP to avoid paying more tax in retirement? Yeah, better to make nothing. lol Ever think that perhaps if his RRSP is very large, he would have an option to perhaps retire early and start withdrawing it??
Did he say at the end, that you pay taxes on the TSFA?
I hope not... the whole "tax-free" part is the point of the video
If you have money to invest for retirement and dont use a TFSA,then i am not sure what to say to you,it should be pretty clear!
The best tool of all is borrowing money to invest and writing off the interest payments. If you are at the highest tax brackets you are paying 48% of your income in tax. This means a 7% interest payment is actually 3.5%! You can float 100k for only 3.5 k a year. This will make you rich but no planners talk about it! Why? Most planners think that their clients can’t handle leverage… unless it’s their house. Crazy.
Some people can handle leverage and use it appropriately but this would be the exception instead of the rule. Lots of risk and nuance with leverage. Based on my experience working with real people there's no way I would go on a public platform to recommend it to the general public. **Also note for anyone reading this comment that you can't deduct the interest if you're using the borrowed money to contribute to a registered plan like an RRSP or TFSA
@ sadly - it’s an unused tool for higher income earners. Back in the 1990s my father co-signed my first interest only loan with a bank. The loan being used entirely to invest in blue chips, mutual funds, ETFs. It put 300k immediately into investments and I have never looked back. It’s now worth over 2 million, not counting all the write offs and money I used for a down payment on a home in Vancouver. Best thing I ever did financially. Cheers