Thursday, October 12th, 2017
The closing of one year and the start of a new year provides a great opportunity to take inventory of both the positive (beneficial) and negative (harmful) financial decisions we've made in the past year. While it's too late to course correct for the previous year, it's a perfect time to plan for the upcoming year's financial decisions.
So let's start with a review of the past year. Here's a handful of questions to consider:
TFSA and RSP Contribution
As we look toward the New Year, one of the first things to prioritize is a new calendar year for TFSA contributions, and of course, the ever-busy RSP and tax planning season. How do you decide which to contribute to?
If you're looking for the corresponding tax deduction of an RSP contribution because you're in a higher tax bracket, then consider setting up regular monthly contributions rather than making a one-time lump sum contribution. It's smart behaviour, and it eliminates the last-minute rush.
If you're in a lower tax bracket and imagine you'll be in a higher one during retirement, then TFSAs might be the way to go. TFSAs continue to grow in popularity and are all-around helpful accounts for saving for both short-term and longer-term goals.
New Reports for Investors
In 2017, the final phase in the series of CRM2 regulatory changes was implemented with the launch of two new reports: a personal performance report and a report on dealer compensation and charges. Investment dealers now send these two reports to their clients in the spirit of transparency and cost disclosure.
Investors now have visibility into their personal rates of return (important to make sure you're on track toward reaching your goals) as well as dealer servicing and account charges. The latter is important because it will create a way for investors to compare the services they receive from various investment dealers they might have accounts with, and will put into dollar figures the amounts that you're paying those dealers for things like trailer fees and deferred sales charges (DSCs).
Tips for Financial Fitness in the New Year
Here are a few final tips to make sure you'll be financially fit in the upcoming year: