I'm constantly impressed by the well-thought-out analysis you share on these videos. Thank you very much. I'm about 4-5 years from retirement and have asked my investment advisor to create a retirement plan for me - if it's as impressive as your tool I will be a happy man!
that is so great to hear, these days it seems like the only way to make some reasonable profit is to work with an expert. Imagine investing 200k and getting 5% return on investment, that is too low when some folks in the same market are racking up big amounts with the same capital.. make it make sense
Very true. despite having no prior investing knowledge, I started investing before the pandemic and pulled in a profit of approximately 950k that same year. In reality, all I was doing was getting professional advice
glad to have stumbled upon this comment, how can i participate in this? I sincerely aspire to establish a secure financial future and I am eager to participate. Who is the driving force behind your success?
thanks for sharing , I curiously searched for her full name and her website popped up after scrolling a bit. I looked through her credentials and did my due diligence before contacting her. Once again many thanks.
What you do with the tax refund when you contribute to an RRSP needs to be factored into the equation. If you can use the refund for longterm gain, then it should be worthwhile, even if your tax bracket in retirement doesn’t change by much.
When getting closer to retirement, impact of contributions to RRSP is far less than compounding. Also RRSP melt down could trigger OAS claw back. That is a headache.
@@harveythompson6951 So true. Considering that OAS is only $8,560 per year and the threshold is only $90,997, I'd rather overachieve and have $300k+ per year of passive income than do a bunch of gymnastics to get the $8,560 OAS.
@@Patrick-pv9pe True. I shake my head at that. It's an unaffordable program for the govt and should be clawed back entirely at half of what it is. Bolster GIS instead.
Don't know about others but my investments took a substantial hit during Covid. As a result I stopped making RRSP contributions and just did TFSA. I also switched to high interest cash savings. As such my cash is now 85% of my RRSPs. That money was taxed already, so no future concerns. Ill be slow burning my RRSPs which will take me to 85. Ill take CPP at 63 at $1000/ month which will be applied to TFSA for 2 years which will maximize it before my Bridge Benefit of my pension drops. Then CPP will replace my Bridge drop. No change in lifestyle. OAS and RRSP withdrawals will be roughly an $18,000 increase of income ( before taxes) each year.
50 yoa and single in Ontario; both tfsa and rrsp contribution maxed every year for years now. Defined benefit pension available now reduced or in full at age 55. Making approximately $120k annually. My plan is to continue maxing both registered accounts until pension and not touch the rrsp until meltdown after bridge payments from pension provider with the primary focus on maxing tfsa day one of each calendar year. My debt is zero beyond mortgage at 1.86% that matures in 2025. I plan to clear that $50k mortgage balance off the books instead of renewing at a higher interest rate and doubling down on investing in tfsa and non-reg. depending on interest rates and state of the stock market. Am I correct In maxing the rrsp for the five years before retirement? When or is it worth using the $2k over-contribution one-time buffer rrsp buffer? Thank you for the presentation!
If I were you, I would start modelling how much tax I would pay in retirement using income from all sources. As you indicated, you will have available income from RSP, pension, TFSA, and of course, CPP and OAS. I would be wary that the taxation on my income from all those sources would put me potentially into a higher tax bracket than what I am in currently. If that’s the case RSP contributions might not be my best choice. It’s all about the math, in my opinion, and ensuring you are making accurate predictions of future taxation. I would include in my future tax calculations, any potential income splitting available to me to improve the accuracy.
I agree, as Adam has previously stated, those ~50K and up s/b contributing to rrsp and tfsa; esp if you’re single. You get the up front tax break, as well as the tax deferred growth that can be put towards future expenses. A slight tweak tho is that depending on salary and marginal tax rate, it may be prudent to NOT deduct the entire amount of contribution in that year; save deduction for higher income years. Use up your rsp and tfsa room to the max esp if you don’t have db pension. There’s never too much to contribute. If you cash out at lower tax bracket, you win but for those who have planned well, have had above avg salaries, the best will probably be same tax bracket; but that’s still a win. I dislike the cra so much, my backup plan is to transfer my rsp to my 25yr old trophy wife when I’m mid 80s... lol ;-)
I agree. I will be in a scenario where I will be getting a large lump sum payment from my employer. However I have enough contribution room accumulated that I can elect to not have tax withheld on it and put the whole amount in the RRSP. That should save a lot in tax in the long run as I will be withdrawing it in the next 5 - 15 years at a lower rate.
I bought my property in March, 2024 as a first time home buyer and used my 35k limit. But my spouse limit was not used so can I contribute now and withdraw the same after 3 months i.e. after 90 days? Thank you in advance.
I’m not so sure. As an example, if I take someone with a $60,000 salary starting at age 25. If they were to invest $10,000 per year (that’s less than the 18% maximum possible ) for the next 30 years, at age 55 they would end up with an RSP of roughly $864,000, this is based on a 6% average annual return. I believe this is certainly possible for more than 3% of working Canadians.
@@harveythompson6951 I don't know that for a fact, but that is the exact reason I did not increase the annual contribution amount over the 30 years. It was meant only for illustrative purposes - that accumulating a $500k RSP is not that difficult with annual contributions to a reasonable index fund(s). The same math works from age 35-65. I would agree that starting at age 25 might be tough. If the investor would only contribute $6,000 per year over the 30 years, at 6% the result would be $500k. I would suggest that is pretty decent.
I stopped contributing to Spousal RRSP because she started collecting CPP, and I was worried that she might convert RRSP to RRIF, I stopped contributing so that enough time passes so that it doesn’t get taxed back to me.
If I were in this situation, I would seek advice from a qualified tax accountant. Mostly, my focus would be on taxation at death and ensuring I’m doing whatever I can to minimize tax to my estate. I hope to live a long time also and there are probably many nuances to consider in this situation with respect to government pensions, and any other income sources you expect to utilize in retirement. And while I am dead set against over utilizing life insurance, it may be useful to look into life insurance as a means of protecting against potential future taxes in your estate.
I know the numbers in this video are hypothetical. But no investment income (@15:55 of this video) in the first multiple years when the couple combined income is $250,000? To me, either the assumed numbers in this video are too unrealistic or the couple has no planning of saving at all.
There are many articles in the financial press showing that RRSP above $800K is too much. Why? Above this you start large OAS clawbacks. So someone w $4 Million will never get OAS. At that RRSP level you are in the top 1 % of the wealth bracket or higher...which are not the viewers of this channel.
I'm constantly impressed by the well-thought-out analysis you share on these videos. Thank you very much. I'm about 4-5 years from retirement and have asked my investment advisor to create a retirement plan for me - if it's as impressive as your tool I will be a happy man!
that is so great to hear, these days it seems like the only way to make some reasonable profit is to work with an expert. Imagine investing 200k and getting 5% return on investment, that is too low when some folks in the same market are racking up big amounts with the same capital.. make it make sense
Very true. despite having no prior investing knowledge, I started investing before the pandemic and pulled in a profit of approximately 950k that same year. In reality, all I was doing was getting professional advice
glad to have stumbled upon this comment, how can i participate in this? I sincerely aspire to establish a secure financial future and I am eager to participate. Who is the driving force behind your success?
Her name is 'Dianne Sarah Olson' just research the name. You'd find necessary details to work with a correspondence to set an appointment.
thanks for sharing , I curiously searched for her full name and her website popped up after scrolling a bit. I looked through her credentials and did my due diligence before contacting her. Once again many thanks.
Brett was so good as my financial planner and got me over 60k after tax and inflation. My heart surgery was a success and I am in recovery mode. 🙏
Great news.
Was it the sticker shock of the cost of a financial plan that gave you the heart attack?
What you do with the tax refund when you contribute to an RRSP needs to be factored into the equation. If you can use the refund for longterm gain, then it should be worthwhile, even if your tax bracket in retirement doesn’t change by much.
When getting closer to retirement, impact of contributions to RRSP is far less than compounding. Also RRSP melt down could trigger OAS claw back. That is a headache.
In this case, retire early and delay OAS to 70.
@@murraytown4 this is the way
OAS clawback is a good thing. I don't know why so many agonize about it.
@@harveythompson6951 So true. Considering that OAS is only $8,560 per year and the threshold is only $90,997, I'd rather overachieve and have $300k+ per year of passive income than do a bunch of gymnastics to get the $8,560 OAS.
@@Patrick-pv9pe True. I shake my head at that. It's an unaffordable program for the govt and should be clawed back entirely at half of what it is. Bolster GIS instead.
Would be nice to see realistic incomes. Not many families make 250k a year
True that! But high earners benefit most from rrsp investment. Maybe the rest of us are better off with Tfsa investments.
Don't know about others but my investments took a substantial hit during Covid. As a result I stopped making RRSP contributions and just did TFSA. I also switched to high interest cash savings. As such my cash is now 85% of my RRSPs. That money was taxed already, so no future concerns. Ill be slow burning my RRSPs which will take me to 85. Ill take CPP at 63 at $1000/ month which will be applied to TFSA for 2 years which will maximize it before my Bridge Benefit of my pension drops. Then CPP will replace my Bridge drop. No change in lifestyle. OAS and RRSP withdrawals will be roughly an $18,000 increase of income ( before taxes) each year.
50 yoa and single in Ontario; both tfsa and rrsp contribution maxed every year for years now. Defined benefit pension available now reduced or in full at age 55. Making approximately $120k annually.
My plan is to continue maxing both registered accounts until pension and not touch the rrsp until meltdown after bridge payments from pension provider with the primary focus on maxing tfsa day one of each calendar year.
My debt is zero beyond mortgage at 1.86% that matures in 2025. I plan to clear that $50k mortgage balance off the books instead of renewing at a higher interest rate and doubling down on investing in tfsa and non-reg. depending on interest rates and state of the stock market.
Am I correct In maxing the rrsp for the five years before retirement? When or is it worth using the $2k over-contribution one-time buffer rrsp buffer? Thank you for the presentation!
If I were you, I would start modelling how much tax I would pay in retirement using income from all sources. As you indicated, you will have available income from RSP, pension, TFSA, and of course, CPP and OAS. I would be wary that the taxation on my income from all those sources would put me potentially into a higher tax bracket than what I am in currently. If that’s the case RSP contributions might not be my best choice. It’s all about the math, in my opinion, and ensuring you are making accurate predictions of future taxation.
I would include in my future tax calculations, any potential income splitting available to me to improve the accuracy.
I agree, as Adam has previously stated, those ~50K and up s/b contributing to rrsp and tfsa; esp if you’re single. You get the up front tax break, as well as the tax deferred growth that can be put towards future expenses. A slight tweak tho is that depending on salary and marginal tax rate, it may be prudent to NOT deduct the entire amount of contribution in that year; save deduction for higher income years. Use up your rsp and tfsa room to the max esp if you don’t have db pension. There’s never too much to contribute. If you cash out at lower tax bracket, you win but for those who have planned well, have had above avg salaries, the best will probably be same tax bracket; but that’s still a win. I dislike the cra so much, my backup plan is to transfer my rsp to my 25yr old trophy wife when I’m mid 80s... lol ;-)
Definitely wait until your 80s for the 25 year old trophy wife. If done in your 40s you will be ruined economically by divorce.
I agree. I will be in a scenario where I will be getting a large lump sum payment from my employer. However I have enough contribution room accumulated that I can elect to not have tax withheld on it and put the whole amount in the RRSP. That should save a lot in tax in the long run as I will be withdrawing it in the next 5 - 15 years at a lower rate.
I must have lived in the wrong area. Certainly I would think these salaries are in a % basis I don’t know about.
I bought my property in March, 2024 as a first time home buyer and used my 35k limit. But my spouse limit was not used so can I contribute now and withdraw the same after 3 months i.e. after 90 days? Thank you in advance.
My question is in this financial landscape I don't know many people who have 500k in rrsp let alone 1.8 million. This discussion is the 3% of society.
I’m not so sure. As an example, if I take someone with a $60,000 salary starting at age 25. If they were to invest $10,000 per year (that’s less than the 18% maximum possible ) for the next 30 years, at age 55 they would end up with an RSP of roughly $864,000, this is based on a 6% average annual return. I believe this is certainly possible for more than 3% of working Canadians.
@@James_48 Very few contribute to their maximum allowable
@@harveythompson6951 I don't know that for a fact, but that is the exact reason I did not increase the annual contribution amount over the 30 years. It was meant only for illustrative purposes - that accumulating a $500k RSP is not that difficult with annual contributions to a reasonable index fund(s). The same math works from age 35-65. I would agree that starting at age 25 might be tough.
If the investor would only contribute $6,000 per year over the 30 years, at 6% the result would be $500k. I would suggest that is pretty decent.
Your client report only works for less than 10% of the population. Let's do real numbers with real people wages. Like 50 to 60000 yearly incomes
Defer tax with a RRSP then an overspending Socialist Government will raise taxes so there is no savings and in fact you lose in more ways than one.
Hard to relate to high incomes like in this example shows.
I stopped contributing to Spousal RRSP because she started collecting CPP, and I was worried that she might convert RRSP to RRIF, I stopped contributing so that enough time passes so that it doesn’t get taxed back to me.
if I had 1 million in RSP and 1 million in my business investment acc... which should i withdraw first typically?
If I were in this situation, I would seek advice from a qualified tax accountant. Mostly, my focus would be on taxation at death and ensuring I’m doing whatever I can to minimize tax to my estate. I hope to live a long time also and there are probably many nuances to consider in this situation with respect to government pensions, and any other income sources you expect to utilize in retirement. And while I am dead set against over utilizing life insurance, it may be useful to look into life insurance as a means of protecting against potential future taxes in your estate.
RRSP
Pony up the reasonable fee Parallel Wealth charges and they will map it out for you.
I know the numbers in this video are hypothetical. But no investment income (@15:55 of this video) in the first multiple years when the couple combined income is $250,000? To me, either the assumed numbers in this video are too unrealistic or the couple has no planning of saving at all.
There are many articles in the financial press showing that RRSP above $800K is too much. Why? Above this you start large OAS clawbacks. So someone w $4 Million will never get OAS. At that RRSP level you are in the top 1 % of the wealth bracket or higher...which are not the viewers of this channel.
I don't think anyone with millions cares about OAS clawback.
Damn, I should donate my excess 3.2 million just to get that 8400 in OAS!!!!