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TFSA makes progressive retirement system slightly less so: Malcolm Hamilton

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Here’s my latest MoneySense blog, a followup to all the media coverage on two controversial reports that called for the Tories to renege on its promise to double TFSA contribution room once the federal books are balanced. The blog, entitled Leave the TFSA Alone, is based on an email exchange with retired actuary Malcolm Hamilton, who led off the MoneySense Retire Rich event last November. Speaking of which, another is scheduled this April.

By Jonathan Chevreau

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Malcolm Hamilton (L) & Jon Chevreau, 2012, MoneySense.ca

One of Canada’s better-known retirement experts, Malcolm Hamilton, doesn’t think limits need to be doubled on Tax-Free Savings Accounts but his reason for saying so is not the fiscal consequences for Ottawa. “I just think that a larger TFSA will ultimately threaten RRSPs and that the existing TFSA is sufficiently large for most Canadians.”

In an email exchange, Hamilton said he worries about the “apparently coincidental release of two reports highly critical of the TFSA in an election year.” Given its close affiliation with the NDP party, the critique of TFSAs is to be expected from the Broadbent Institute, he said.

Feds backing away from TFSA?

But the other report, from the Parliamentary Budget Officer (PBO) is more of a concern, since “it may signal that the federal government is backing away from the TFSA.”

Continue Reading…

At age 62, couple celebrating 25 years of Financial Independence

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Billy and Akaisha Kaderli

By Billy and Akaisha Kaderli,

Special to the Financial Independence Hub

At the age of 62, we are beginning our 25th year of financial independence. That is quite a feat!

From the beaches on Nevis, West Indies, to the shores of Phuket, Thailand we have travelled extensively through these decades, and what a ride it’s been!

Young and strong in those early years, we were willing and able to tackle just about anything. Now we tend to be a bit more cautious but we’re not letting up. We still climb into the backs of pickup trucks, ride the chicken buses and soak in volcanic hot pools. The time has passed quickly from when we were the youngest, grayless couple in a group of retirees, to now where we blend in with the retiree crowd.

Still, no one can take away the dance we danced and we are filled with gratitude for all the miles and smiles. Continue Reading…

Tax issues for Americans with ties to Canada (& vice versa)

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Brian preferred small
Brian Wruk

By Brian Wruk, CFP

Special to the Financial Independence Hub

As the Canadian tax deadline quickly approaches, the process of gathering all your tax slips, back-up for your deductions and getting them to your accountant begins or, maybe you are installing the latest tax software. Regardless, if you are a Canadian with some form of tax ties to the U.S., you may need to file a U.S. tax return as well. What kind of ties?

Let’s go through three of the most common ones:

  1. U. S. Citizenship – With all the media coverage, it is becoming common knowledge that being a U.S. citizen means you have to file a U.S. Form 1040 tax return. This is even more difficult to hide from the IRS since Canada signed an agreement that requires Canadian financial institutions to report all financial information tied to a “U.S. person.” This is all part of the IRS Foreign Account Tax Compliance Act (FATCA) initiative to crack down on U.S. citizens evading taxes through foreign accounts. Canadian financial institutions are reporting this information to Canada Revenue Agency, which in turn will provide that to the IRS as permitted by the Canada/U.S. Tax Treaty and the IRS will be looking for a tax return and the appropriate disclosures (FBARs).

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Try to do a dry-run on your taxes today before RRSP contribution deadline passes

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Wealthy Nest EggBy Jonathan Chevreau

As every red-blooded Canadian investor surely must know by now, today is the last day to make an RRSP contribution for the 2014 tax year.

As I wrote for Motley Fool Canada/MSN Money in two pieces in February (one on RRSPs, the other on the looming tax-filing deadline), today (or better yet the weekend just passed) would be a good time to at least do a preliminary dry run on your taxes.

Why? If you’re a salaried employee, you should by now have received your T-4 slip, which means if you enter the slip into your tax program, you’ll have a pretty good idea of how much tax you’ve already paid and how much you may yet need to pay.

T-4s are here; time to stop procrastinating

Sure, the filing deadline isn’t until Thursday, April 30th, roughly two months from now. But if you wait even until tomorrow, it will be too late to check out your past RRSP contributions Continue Reading…

When Finances Matter: Buying Advice for Potential New Home Buyers

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First time buyersBy Jennifer Caughey,

Special to the Financial Independence Hub

A paid-for home is the foundation of financial independence, according to this web site. But long before you reach that stage, stepping up to buy your first home can be a daunting process. It takes time and careful planning. Finances are especially important when you’re considering taking the huge step of buying your first home.

Not only do you have to consider whether you can come up with the down payment and closing costs, but you also have to think about whether you can afford the upkeep of ownership, potential repairs and improvements, and the full cost of buying a home in the first place (including principal and mortgage interest payments). There are a lot of variables to consider and potential home buyers need to be prepared for everything involved in the home buying process.

The True Cost of Home Ownership

Financially speaking, buying a home is a big deal. There’s a lot to think about in terms of where the money will go. It goes well beyond just paying for the home that you decide upon. There are plenty of areas where you have to ensure that you can afford this process, including: Continue Reading…