Business

RRSP Season Insights - # 4

Tuesday, February 12, 2013   by: BayToday.ca StaffFeature, BayToday.ca
- Kingsdale Capital Markets
- Michael Hutchison

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RRSP Season Insights: Article 4 of 7
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TFSA and RRSP Tactics


This week we are expanding our conversation on RRSPs and TFSAs by looking at tactics to maximize retirement savings.

With the March 1st, 2013 RRSP deadline looming less than three weeks away, many of us are wondering how we will make our final contribution to reduce our 2012 taxable income.

Here are some RRSP contribution alternatives to consider:

1. Deposit cash to your RRSP

2. Transfer a stock, bond or mutual fund to your RRSP from your non-registered account, without selling the investment (Movement recognized as a disposition; capital gains taxed)

3. Take out a RRSP Loan: With interest rates at historic lows, this is a very attractive option over a 12-24 month payback period (Interest on RRSP loans not tax-deductible)

4. Deposit a stock/share certificate into your non-registered account and contribute to you RRSP (Movement recognized as a disposition; capital gains taxed)

5. Transfer some assets from your TFSA to your RRSP

The RRSP contribution limit for 2012 is $22,970, plus any un-used contribution room.

This amount can be found on your Notice of Assessment (received annually after filing your taxes) or by calling Revenue Canada’s Tax Tip Line at 1-800-267-6999.

As for the TFSA, contributions won’t reduce your taxable income but are an increasingly important part of your financial plan. Tactics include:

1. Deposit cash

2. Transfer a stock, bond or mutual fund to your TFSA from your non-registered account, without selling the investment (Movement recognized as a disposition; capital gains taxed)

3. Deposit a stock/share certificate into your non-registered account and contribute to you TFSA (Movement recognized as a disposition; capital gains taxed)

The maximum you can contribute to your TFSA is $25,500 (if 18 years old by 2010).

Importantly, the above recommendations should be considered as part of your overall financial plan, and should be explored in light of your unique situation.

Next Monday we will discuss retirement planning and pensions.

Michael Hutchison is a Financial Advisor at Kingsdale Capital Markets and instructs part-time at Canadore College. He is a member of the Elks Lodge #25 of North Bay and a member of the board of directors at Community Homeownership Affordability Partnership. He holds a BBA (Hons.) and Chartered Strategic Wealth Professional designation.

Kingsdale Capital Markets
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