TFSAs are always in season
Thursday, March 1 is the deadline for RSP contributions that you can claim on your 2017 tax return. And with the RSP season now coming to a close, it’s time to shine the spotlight on that other kind of registered account that should probably be in your portfolio, namely TFSAs.
TFSAs are a whole lot simpler than RSPs. They don’t lower the tax owing on your income, but they do shelter any future gains from taxation—forever. And you don’t have to worry about meeting deadlines, because the amount you contribute doesn’t factor into your taxes for any year.
Here are the key points about TFSAs:
- On January 1, you received another $5,500 in contribution room from the government.
- The total allowable room that has accumulated in TFSAs since inception is $57,500. If you have investments in non-registered accounts and you haven’t maximized your TFSA contributions, now is a good time to move them into your TFSA.
- Contrary to what many people think, TFSAs are not just for savings. You can use TFSAs to hold other types of investments, such as stocks, bonds, mutual funds and ETFs.
- You can withdraw from a TFSA at any time, with no penalty. But if you do, you can only recontribute that amount in the next calendar year.
As always, please feel free to get in touch with us if you would like to chat further about TFSAs, or indeed about anything else for that matter.
We’ve been on the podium lately, too!
We hope it isn’t necessary to toot our own horn, because we’re confident that we offer great savings and great service. But when someone else does this on our behalf, we hope you won’t mind us sharing!
This time it came from Ratehub.ca, a leading Canadian personal finance website, specializing in aggregating the best rates and reviewing the best financial products in Canada. They recently announced their 2017 Personal Finance Awards, and we were singled out for two accolades that make us quite proud. Both were in the GIC category, an area of personal finance in which we’ve carved out a role for ourselves as a true leader: Top 1 Year GIC, and Top 5 Year GIC.
We earned our place on the podium with the highest interest rates in the country on those two products—2.75% on the 1 year term, and 3.25% on the 5 year term. And that’s not all that surprising. As the world of financial services knows, Oaken consistently offers some of the highest interest rates available in Canada for both registered and non-registered GICs.
But it wasn’t just about our rates. Several other aspects were taken into account as well, such as customer service and user experience. You can read more about the methodology and rationale for these awards on Ratehub’s blog.
Driving south in the winter
Every winter, millions of Canadians head south to destinations such as Florida, Arizona, Mexico and the Caribbean. While most fly down to those sunny climes, a surprisingly high number choose to make their trip by driving—40% of the 3.5 million Canadians who head to Florida, for example. Whether your vehicle of choice is a car, motorcycle or RV, driving has its own rewards, as well as its own requirements for a fun and safe trip. Here’s what to know about a road trip:
If you’re not a Canadian national, the expiry date on your passport or NEXUS card must be further away than six months, otherwise you won’t be allowed to enter the U.S. Children who are 15 and under don’t need a passport, but they do need a birth certificate.
If you’re bringing pets into the U.S., they must be healthy and accompanied by a certificate showing they have been vaccinated against rabies within 30 days of entry. This applies to service animals as well.
If you have expensive items, such as cameras, computers or videorecorders, it might be worthwhile to list them on a U.S. Customs and Border Protection form—especially if they look new. By filling out the form (with serial numbers for the equipment), you’ll be able to prove to Canada Border Services that you didn’t buy it in the U.S., and therefore you don’t owe any duty on it.
There are a lot of things you can do to be prepared. Buy a GPS to help in navigating, get your tires checked and your car serviced, and invest in an emergency road kit. This can be as simple as a first-aid box and emergency reflectors, or can be much more elaborate. Consider joining the Canadian Automobile Association (CAA), whose affiliation with its American cousin (the AAA) will provide you with roadside assistance if you get stuck.
Stock up on food and beverages instead of buying along the way, as you’ll save time and probably money. Check weather forecasts before you leave, and remember that there’s much less traffic from big trucks on weekends than on weekdays. Gasoline is considerably cheaper in the U.S., and you can find the best prices along the way by checking out GasBuddy.com.
And as a final reminder, consult the Canada Border Services website for the duty-free exemptions that apply to you. Happy trails!
New ideas in retirement living
Canada’s population is aging. According to the 2016 Census, our senior population grew by 20% over the previous five years. That’s four times the growth rate of the population as a whole. That in turn has led to an astonishing development. For the first time in our history, seniors outnumber children, with those over 65 representing 5.9 million people and those under 15 accounting for 5.8 million.
That kind of change has profound implications for society as a whole. Our medical costs will grow, our tax base will shrink, and governments will have to pay out more in pensions and old age security. It also has implications for the way we live. More and more seniors want to “age in place”, and that’s a challenge that cities, architects and the medical profession are taking up.
Laneway housing: the new trend in cities
One way that we’re addressing this challenge is laneway housing. For example, the University of Calgary’s Environmental Design faculty launched a pilot project in 2015 that featured a customized laneway residence designed specifically with seniors in mind. The project was a unique collaboration between architects, medical specialists and Alberta Health Services. The City of Calgary gave the project the green light in 2016, and testing the unit with real residents began last year.
The Calgary project is unusual because it involves a temporary unit that can be moved from site to site after residents have left. It’s intended specifically as a low-cost alternative to assisted care, since it’s designed to accommodate medical and monitoring technology. However, the concept of laneway housing is one that can also be extended to the wider population, and not just those needing close medical supervision. And it’s a concept that’s gaining in popularity across Canada.
More and more of our cities are looking at laneway housing as a smart solution to a number of problems, especially rising rents and home prices. Ottawa recently changed its bylaws to allow coach houses and laneway houses as residential units, and Vancouver has permitted them since 2009. Toronto is also looking into the issue, partly in response to the city’s skyrocketing real estate prices.
Aging in place
This is good news for seniors who would like to stay in their neighbourhoods for as long as possible. The option of renting out one’s home and moving into a smaller unit at the back of the property is an attractive solution, especially if family caregivers will be the new tenants. It has the added bonus of allowing elderly homeowners to hold on to their home for that much longer, which might suit their financial goals better than selling the property when they move to the backyard. All in all, laneway housing is a positive development that we’ll likely see more of as our population grows older.
Beat the February blues with a trip down south, or the next best thing—our reading list!…
- A closer look at what kind of assets to hold in your TFSA, courtesy of the Globe & Mail.
- Some additional travel tips from the Winnipeg Free Press, especially useful for those venturing further afield.
- The CBC with a report on interesting things that are happening in senior housing in Ottawa.