Tuesday, 11 August 2015

Financial Studies 1 - RRSP Withdrawal Strategies?

What is the question?

I have three questions I want to answer with this blog post. 
  1. Should you begin withdrawing RRSP when you retire, or wait until some later time such as at 71 when you are forced to begin withdrawals?
  2. What is the amount of withdrawal from RRSP, relative to withdrawals from other investment accounts, that will maximize value?
  3. Will you maximize value by setting income from RRSP to make your taxable income the top of a specific tax bracket?

Wednesday, 5 August 2015

Financial Basics Update #1

I have made the following changes, updates and improvements to the Financial Basics series.

August 5, 2015

Financial Basics 2 - Income Tax

I removed the comment that the tax rate in Alberta is a flat 10%, since this will be changing in 2016.

Financial Basics 3 - How Different Savings Accounts Work

I added the following bullet to the description of an RRSP account
  • Contributions do not have to be deducted from taxes in the current year and can be carried over and deducted in subsequent years.

I modified the following under TFSA for the change in TFSA limits in 2015.
  • Contribution limit for 2009 to 2012 was $5000, for 2013 to 2014 it was $5500 and is now $10,000 from 2015 onward.  The contribution limit used to be indexed to CPI (consumer price index, or inflation) and rounded to the nearest $500, but with the increase in the limit in 2015, the indexing now no longer applies. 

Financial Basics 4 - Self-directed Accounts

I added the following paragraph to clarify why you would need a US $ account.

If you will be trading in securities in US dollars, or need a US $ account and credit card for purchases in the US, the following features are required. They come free with an Investorline account.
  • US dollar conversion and US dollar cash account within Taxable account.
  • Ability to pay your US$ credit card from the US dollar account.