Watch my CANADIAN TAX GUIDE to learn how taxes work and the rules & benefits of these investing accounts! 🇨🇦 ruclips.net/p/PLj8bU3AuW2qEA_ik7NOAIkBY02nt7KAPj
I also have specific playlists for the TFSA, RRSP and RESP. View my playlists on my homepage. I included the RRSP playlist below 👇 ruclips.net/p/PLj8bU3AuW2qHOikk4VRpSDXCZTuH7eUhz
@@CanadianTShirt Love it. Hey, do you ever put any money extra on your home principal to try to get it paid off faster, or do you invest all of your extra money into mutual funds so that it grows to its maximum capacity?
Adrian's knowledge is not just impressive; it's delivered in a way that's relatable and easy to understand. Plus, the guy does it all in a T-shirt, which adds a touch of authenticity that I really appreciate. As a relatively new comer to Canada, these videos have been really helpful, making my transition to Canada smoother. So, huge thanks!
Wow thanks so much for the Canadian-specific educational content! I immigrated here 5 years ago and behind on my retirement plan, so this is super helpful.
Thanks Adrian. After I watched this video, it confirms my more than 10 years old investing strategy still on the right track. I pay off my credit card every month. I used TFSA helping me for my home down payment. There was no FHSA available at the time. I paid off my mortgage couple years ago. Now, I can really focus on investing in TFSA and RRSP now. One thing, I want to share with the subscribers on this Channel: Please ensure you pay off your credit card every single month. It helps to build up your credit score and it will give you more finical freedom to invest. Better credit score will help you to get a better mortgage rate when you are negotiating it with your bank.
100% buddy! I'm so glad to hear that your strategy has paid off! Having no mortgage and now focusing solely on long term investing is an incredible position to be in! 😁
I'm happy to help! And remember you can certainly do both! Invest a portion of your money in the TFSA and some in the RRSP! This breakdown will depend on your tax bracket and other factors =)
Looking forward to the RRSP vs TFSA debate video. My buddies and I are always fighting over this topic. Your videos are some of the most that I share with friends and family. Thanks man.
Ya those debates can get heated and there is a TON to discuss! I did a short condensed version in this video but there are SO many scenarios to consider when deciding between the two so stay tuned! =)
Absolutely great video on the many investment accounts / options! Your simple lay-person's explanation makes it very easy to understand and apply! I say "great video" about most of your videos, but this surely is one of your best on investing accounts! Thanks for your continuing commitment to making Canadians financially literate!!
Thank you so much Kimmy! I am VERY proud of this video! It certainly wasn't easy to make... I had to rewrite the script so many times to get it right. It's hard to summarize 5 different investing accounts in a 10 minute video but I'm happy with how it turned out! 🙏
I couldn't agree more! There's no excuse why these fundamentals are not taught in high school but I know that some jurisdictions are starting the incorporate personal finance in their curriculums so that is great news! =)
I just found your videos on RUclips after listening to other Canadian finance podcasts for a few months as I am newer to investing and taxes, I first heard you as a guest on the more money podcast and I wish you had your videos available in podcast format as they would be great to listen to in the car. You’re videos are by far the best Canadian finance videos because you talk about important and useful topics and get to the point right away. I wish I found your videos sooner because I would have learned a lot more a lost faster. I look forward to going through all your videos and future videos. Thank you Adrian!
Thank you so much for those kind words and I'm glad you found my channel! Yes Jessica is AWESOME and I had such a fun time on her podcast! I hope to join her again! 😁
That's a great point and a very popular strategy! Contribute to the RRSP and then use those tax refunds to contribute to your TFSA. You get the best of both worlds =)
I'm happy to hear that Dale! It can be confusing keeping track of all the different accounts and their benefits but I'm glad this video was helpful! =)
Great video! I haven't been able to contribute to my investments as much as I had during the lock-downs. Now with my higher expenses but also higher tax bracket, I tend to only focus on my RRSP. But I really should contribute, even if just a little, to my other investing accounts. RRSP seems to be one of the last things on your list, unfortunately my job doesn't offer RRSP matching haha.
Each account offers different benefits and some accounts will favour individuals with higher incomes etc. It's a shame that your job doesn't offer RRSP matching but I'm glad to hear that you are creating your OWN retirement portfolio! 😁
Your videos are pure GOLD thank you for everything I couldn't make it to MTL to meet you with the rest of the Blossom team I hope you will come back soon
I'm happy to hear that! This video was a BEAST.... it's not easy to summarize 5 different investing accounts in a 10 minute video but I'm glad it was helpful! 🙏
Getting out of credit card debt is HARD! The interest and the numbers are working against you but you absolutely have to focus on it! Every bit of money you can should go towards paying off that debt!
It's not going to happen overnight but stick with it and you'll come out the other end! Also look into a credit transfer! If you can transfer your credit card debt into another card which has a lower interest rate! That will make a big difference! Best of luck! =)
FHSA is hilarious. Max $8k per year is a joke. These days, the average detached home costs $1M. You need $200k min down payment to afford that home. Capping the FHSA at $40k is laughable.
@@SirTylerGolfand it's also geared towards ppl utilizing their First time home buyers downpayment of putting 5% down. Which will usually for most Canadians be around $30,000-$40,000. The cap of the FHSA contribution. Coincidence...I think not 🤔
Thanks for this intro. I will replay it several times and make notes. Right now taking McGill U's mini-course to get a better understanding of personal finance. However, in addition I think I need to see a financial advisor since my situation might not be cookie cutter: very low income (so far never pay any income taxes), retired, have TFSA and just started an RRSP, not a property owner, intend to give up Canadian residency within five years, etc. I see pluses and minuses to TSFA vs. RRSP. Bottom line: while the federal governments of both Canada and USA (relevant if getting dividends or distributions) make it advantageous to organize and plan, it's not a tax-free free for all system like Dubai or Brunei. And there are some complexities. So for the little guy with very little wealth it is less complicated but not super simple.
That's a great comparison video. We will appreciate if you make one video every 6 months, if there is any updates in rules since your previous videos. I,e: before on RRSP, we were able to withdraw up to 40k to buy a home, but now because we have FHSA, we can not do same thing with RRSO anymore. I am following you for majority of my investment research, and also watching your 2 or 3 years old videos. So if there is quick update./changed rules video there, it will be helpful for all followers.
You are referring to the Home Buyer's Plan with the RRSP! Don't worry, the FHSA does NOT prevent you from using the HBP! You can use BOTH the FHSA and the Home Buyer's Plan together!
And just to clarify with the Home Buyers Plan, you can withdraw up to $35K from your RRSP, not $40K. But don't worry, you can combine this with your FHSA to really help out with that down payment =)
im thinking of balancing my investments into both FHSA & TFSA. my FT doesnt do matching. whats ur take on splitting up the money invested between the 2 accounts? i want to save up for my first home but also wanna be invested in some stocks/ETFs in my TFSA. great video as usual
If you are certain that you are buying a home in the next 15 years, I would prioritize the FHSA and try to put in that $8K every year. The FHSA has ALL the benefits of the TFSA plus you get the tax refund every year so it's the clear winner, as long as you are planning to buy a home
And the FHSA and TFSA face the same tax treatment (100% tax free for Canadian investments but face a 15% withholding tax on US dividends) So whatever investments you hold in a TFSA you can also hold in an FHSA. Just keep in mind your time horizon! If you plan on buying a home in the next 2 or 3 years, then you need to be far more conservative with your investments. I'll be making a whole video on FHSA investments based on different scenarios =)
I would like to request a bit more technical video where you explain how to analize and understand a long earnings report. For instance from TD Bank last quarter (came out on August 23rd 2023). It would be nice to know what to focus on as well as understanding the more relevant terms. Thank you for your great videos
Absolutely! I have made a few videos on how I analyze stocks but I haven't made a dedicated one on earnings reports. There is a TON to discuss so it might have to be a series of multiple videos =)
Well if you make a series on that we will be very happy! Please choose stocks from different industries then. For banking TD would be amazing but it would also be great to add some tech stock. Thank you very much for your great videos!
There's one more consideration when it comes to holding eligible dividend payers (TD, Enbridge, CNR, etc). You want to hold these types of stocks in your taxable account rather than your RRSP, if you can. There are tax credits for receiving eligible dividends, but you only get credit if they're in a taxable account. If you hold these in your RRSP you won't pay tax now, since it's deferred, but you wont benefit from the tax credits. When you go to pull that dividend income from your RRSP later then you will be taxed. The tax credits on eligible dividends vary from province to province, so you'll want to play around with a tax program to figure your personal situation out, but it seems that roughly the first $50,000 of eligible dividends per year is laxed at a very low rate after credits, and tapers off going up to $100,000 per year. That's a lot of tax savings you'd be missing out on if these are in your RRSP. This scenario doesn't account for capital gains if your share prices appreciate significantly, however capital gains become one of the most tax efficient sources of income as your income level rises.
Again, great advice for the long-term investments. Are you planning advice for short-term for individuals who started out further on years. i.e. 8 to 12 years before retirement.
Absolutely I will! The shorter the time horizon, the trickier it gets and the more factors you have to consider. Generally speaking, the closer you get to retirement, the more conservative you want your investments. So focus more on the well established, blue chip dividend stocks and ETFs and even fixed income products like bonds or bond ETFs =)
@@CanadianTShirt I don’t mind at all. Here’s a few movies (not necessarily great), and TV projects: - Suits - Handmaid’s Tale - It - See 3 - Slumberland - Jupiter’s Legacy - Locke & Key So many, but that’s just a few of them!😉
New follower to your channel, thank you so much for making these videos. Amazing work. Quick question: how are you defining high vs low income/tax brackets? Thanks again.
It's definitely relative but I would generally say anything above the second tax bracket is high income, especially if you expect your retirement income to be lower than your working income (which is true for the vast majority of Canadians)
What a great video to start the weekend! I was actually debating over which tax sheltered account to use up first. So thank you for making this video! ❤ Now that we are in a recession, it would be very helpful to know which ETFs and Reits are worth buying. So it would be great if you can make a video addressing this topic. As always, thank you for enlightening us with such great content! 😊
All of the stocks, ETFs and REITs that I buy during good times, I continue to buy during market downturns! Check out my STOCKS TO BUY playlist to see why I invest in these companies =) ruclips.net/p/PLj8bU3AuW2qFD4sCsCxXdaAADlyiP8bqB
Many stocks and industries are being hit hard especially REITs since they are particularly susceptible to higher interest rates. But as long as these REITs have quality tenants, high occupancy rates, they will continue to be profitable and I have no doubt they will recover! And in the meantime, I'm happy to lock in those higher dividend yields 😊
What is the best investment strategy for maximizing growth exposure and minimizing taxes for the FHSA? Canadian/US dividend stocks, Cdn/US ETFs, CDN/US growth stocks. Keep in mind I'm already using my RRSP for US ETFs and dividend stocks, and my TFSA for Canadian dividend stocks. Thx
With the FHSA, the most important factor is your time horizon! If you are buying a home in 2-3 years, your investments will be very different than if you're holding the account open for 15 years! I'll break down multiple scenarios in an upcoming video =)
I think it's important to note for long-term investing, the FHSA can only be opened for 15 years from inception, so it may be worth waiting 5 years to put in a lump sum of $40,000. You could put $8,000 into an RRSP and when you transfer it to the FHSA, your income from the withdrawal would be cancelled by the FHSA contribution. This way you get more time for tax-free gains on the $8,000 blocks :)
That wouldn't work. You can use deposit 8000/year + a *maximum* of 8000/year of carryforward. So you could do: Open FHSA 2023: $0 2024: $0 2025: $16,000 ($8000 from 2025 and $8000 unused) 2026: $16,000 ($8000 from 2026 and $8000 unused) 2027: $8,000 So you'd save an additional 2 years. But it should be worth noting that the carryforward doesn't exist until you open an account. So if you didn't open the account until 2025 you'd only be able to contribute $8000. Also, you'd be missing out on 2 years worth of compound interest.
Thanks Adrian! This is the best video I watched on the YouTub regarding tax free investing account. Besides those tax free accounts, would you be so kind to share you view whether it’s better to invest in participate life insurance (tax free) or to invest in high dividend stock/ETFs in own non registered accounts?
I invest using contracts for difference (CFD) through Oanda Brokers. These are leveraged products 1:50. The broker loans money to trader and charges interest ONLY if positions are held overnight . It’s called holding costs or overnight financing charges. Do you know if these are tax deductible expenses?
If there are other costs associated with investing such as commission fees, those will be baked into the cost basis. So not a tax deduction but it will reduce the capital gains tax you end up paying
So we can transfer the money from FHSA to RRSP in case we dont buy a home. When can we do that? Once we reach the max ie 40k? And lets say if we have any capital gains on that, do we have to pay taxes while transferring to RRSP?
You can transfer at any time but my recommendation would be to keep it in the FHSA for the full 15 years, just in case you change your mind and end up buying a home =)
And luckily if you do transfer over to the RRSP, you can transfer the FULL amount! Your contributions PLUS the investment income (capital gains, dividends, etc) There is no tax on the transfer but that money becomes a regular RRSP so you will have to follow the RRSP withdrawal rules and taxes when that eventually happens =)
Amazing content as always Adrian! A lot of your active followers like myself are trying to act in a way to retire earlier in life, in one way or another. Would you still recommend the use of the RRSP for us? If so, what are some strategies we should be considering?
"Retirement" isn't set at a fixed age like 60 or 65, retirement is just when you stop working and so your taxable income will be much lower. So if you are trying to retire early, your income will be lower for that year so withdrawing a portion of your RRSP would be a great idea. Since you would likely be in a much smaller tax bracket than you were when you made that initial contribution so you'd be left with an overall net gain in taxes =)
I can certainly make an RDSP video, I haven't done it yet since it doesn't apply to the majority of Canadians but there is certainly a lot to discuss! =)
Great video as always. Thanks for making these 😀 Regarding FHSA, would it be possible to open one by someone who has purchased a first home which is currently on mortgage and use the returns of the fhsa to pay down the already existing mortgage?
The whole point is to help you buy your first home so if you already live in a home, you won't be able to open this account. But I like where your head it at! =)
I would love the insight of your community, I'm hesitating between three options 1) Investing in my future child RESP (no grant part of 14,000$). I will contribute of course already top the 2,500$ amount elligible for grant 2) Putting the 14,000$ down on my mortgage renewal in 2024. (interest rate would probably be between 6-7%) 3) Giving this money to my parents. They could invest it in their TFSA and let it grow to cover future medical expenses. I would probably need to cover theses expenses in the future anyway, so why not let it grow tax free.
Absolutely that video is certainly coming! It really depends on many things, primarily your time horizon. If you are buying a house in 2 years vs 15 years, that makes a big difference so I will cover various scenarios in that video =)
Awesome video, Adrian! After seeing you at the Montreal event, it's clear that your enthusiasm for investment remains consistent whether in your YT videos or in person, showcasing your genuine passion. One question for you: I had previously maxed out my tax-sheltered account and started a margin account two years ago. With the introduction of the new FHSA room, do you think it's wise to transfer stocks from my margin account to FHSA, or should I just deposit cash into the FHSA?
Thank you for those kind words, it was a pleasure meeting you as well! The Montreal event was so much fun! 😁 Excellent question! I cover this in detail in my video on Transferring BETWEEN Accounts here: ruclips.net/video/WBqJaAFYcRQ/видео.html
You can certainly transfer up to $8K worth of stocks from your margin into the FHSA just remember that this WILL be a taxable event! It will be treated as if you sold those stocks, so you will be taxed capital gains on that "profit"
If you have the cash, I would just contribute cash into the FHSA to avoid triggering those capital gains taxes. But it's up to you, you might want to do a mix of both! Contribute some cash and then to max out the rest of the FHSA, transfer from your Margin. Just be prepared to pay some taxes in April on those capital gains =)
I can certainly make a whole video on the RPP but I have spoken about it in detail in my RRSP Mistakes video here =) ruclips.net/video/I8k95_R_L_Q/видео.html
First, it was nice to see you and talk with you in person during social event in Montreal! My employer matches 45% of my RRSP contributions until I meet my CRA given RRsP contribution limit. Is it more beneficial to prioritize my RRsp contributions until it's maxed out?
A 45% match is still great so take advantage of that free money! I would suggest maxing out the employer matching amount and then stop there. After the matching is finished, the rest of your RRSP room should be in a self-directed RRSP where you buy your own stocks or ETFs and avoid paying those high management fees =)
But yes always keep in mind your available RRSP room (you will see your room from your Notice of Assessment from your most recent tax return) Make sure you do NOT exceed your limit! =)
Could you please make a video on the best investment strategies for TFSA to maximize its benefits, as I dont really know what to buy there. Like grow/divident stocks, ETFs or gics. In one of your previous videos you said that it makes sense to put most of the divident stocks on TFSA. Is it so? What will you suggest in such case? Im new to Canada and dont really understand the market yet
I would suggest CANADIAN dividend stocks, ETFs and REITs since they will be 100% tax free in a TFSA. Your US dividend stocks should go in an RRSP instead to avoid that 15% withholding tax on US dividends. And avoid the risky, speculative plays in a TFSA since if you lose your money, there's no way to salvage that with a capital loss tax credit (can't do this in a TFSA but can do it in a non-registered account) And even worse, if your risky stocks crash and burn in a TFSA you will permanently lose that precious contribution room! Watch my video above for more details but I hope that helps! =)
Subject: Query Regarding Group Retirement Savings Plan (RSP) Contribution Hi I hope this message finds you well. I have a question regarding my RRSP contribution and the company's group retirement savings plan (RSP). Given that my taxable income for 2022 was zero, my RRSP room for 2023 is also zero. However, my office offers a *% matching policy for the group RSP, which I understand can be used as an RRSP contribution. I'm contemplating starting to invest in this fund from December 2023. Would there be any issues with this approach? Alternatively, can I report this investment in my 2024 return if there are any complications in including it in my 2023 return? Your guidance on this matter would be greatly appreciated. Thank you,
Questions: does a car loan (7.99% I think) fall under high interest? I want to say yes but not getting taxed on other things might be more worth it… Second question: for the FHSA, does the $8,000 per year built up like tfsa? If I open one by the end of 2023 and only put $1,000, could I put in $15,000 in 2024?
Hmmm 8% interest is kind of pushing it.... technically yes you "can" get investment returns beating 8% but it's not as likely... In that case, an 8% SURE THING is probably better than a 10% "maybe" so I would likely push towards paying off the car loan
If we're talking an RESP where you can lock in a guaranteed 20% return on top of your investment income, then I would put RESP over paying down an 8% loan. If it's FHSA, where you can expect a significant tax return, again probably FHSA would win in that case. But just a TFSA or non-registered, I think 8% loan might be better for peace of mind. Again you can try a hybrid approach! Pay down some of the loan and invest the rest! =)
The unused FHSA contribution room does carry forward but only ONE YEAR at a time! So if you put in $1000 in 2023 then in 2024 you would have $15K worth of FHSA room. But if you put in nothing in 2024 then in 2025, you would still only have $15K worth of room. Whereas the TFSA, the entire unused room is carried forward to future years
So with the FHSA, you can only carry forward $8000 of unused room into next year. So it's best if you can try to max out that $8K (or as much of it) every year until you reach the lifetime max of $40K. Hope that helps! =)
"Thank you, Adrian, for your detailed insight. I have invested some money in a TFSA under SEG funds. Can it outperform mutual funds or stocks? Could you create a video on the pros and cons of SEG funds? As a first-generation immigrant, it's challenging to save money due to the increasing high cost of living and rising mortgage rates."
Hey Adrian! Awesome video as always! Question on the RESP. What's your opinion on contributing a large sum (example $15,000) in the RESP in the first year. I'm thinking that the benefit of front-loading is at least you're letting a large amount of money grow for 14 years. True, you would only get $500 from the govt that first year, but letting $15K invest for ~14 years would be hugely beneficial. Can't beat the benefit of time in the market.
That would be a great idea but ONLY if your TFSA is already maxed out! The power of the RESP over the TFSA is the 20% government grants. You take those grants away, and the TFSA is just better than the RESP in every way, since it's more flexible and it is fully tax-free whereas the RESP is "mostly tax free" under your child's name
That's why I suggest putting in $2500 into the RESP to max out that $500 of grant money and then stop and move onto the FHSA / TFSA/ RRSP. Once those are maxed out, then come back to the RESP. At that point, if you have $15K, then sure put that $15K into the RESP to let it grow tax-free. From that point on every year, just put in $2500 into the RESP and continue to fill up the other accounts as you gain more room. Hope that helps! =)
POV: Questrade Question: Can I buy stocks/mutual funds in TFSA all year and by the end of the year I could decide how much/many investments i want to transfer to FHSA straight from TFSA?
I haven't done that personally yet but as far as the legislation is concerned, that should be possible. Most transfers to and from the FHSA are with the RRSP since they have the same tax deductible nature. I don't see too much value in your suggestion though... I'm guessing you want the flexibility of the TFSA and you don't want to lock in that money into the FHSA until the end of the year?
I'm not sure what you're suggesting is worth the trouble.... if you think that you will need to withdraw this money soon, you shouldn't be investing with it anyway (it should go into savings instead) But if you want to do this transfer approach, make sure you give yourself ample time. You want to ensure that the transfer is complete and processed before the end of the new year =)
Adrian! Thank you for teaching me and so many people about investing. Can you tell me how one is taxed in margin account? I've max'd out all of my registered accounts. I own a house. No credit card debts.
Canadian dividends will be taxed more favourably than regular income because of the dividend tax credit (more complicated, will break down in the video)
If you are in the lower tax bracket and your TFSA is maxed out, is it better investing in a non registered account over the RRSP since the RRSP has no benefit towards lower tax bracket income earners as you say?
It depends! If you expect to always be in the lower tax bracket then the RRSP probably won't help you. But if you expect your income to grow in the future then you can contribute to the RRSP and choose to carry forward that tax deduction to a future year to get that much larger tax refund!
I go over this in detail in my video here on RRSP for LOW INCOME! I did this exact strategy when I was a student! I contributed to my RRSP but chose not to claim that deduction. Instead I carried it forward for years until I had a high salary and then I claimed the deduction. Check out the video for all the details =) ruclips.net/video/Wm2nOmqOqCQ/видео.html
Gradually plowing through your videos, thank you so much for all the info! Still learning. You mention RRSP a lot, obviously. I have an RSP mutual-fund acct with TD. Does everything you say about RRSP also go the same for RSP accounts?
Hello. I need some help figuring out how to best use my money and RRSP to purchase my first home in the Greater Toronto Area. Let's say I would be qualified as a first time home buyer, I don't have a RRSP account, I do have enough savings to max out my RRSP, and I make $100, 000 a year. I am aware using the money tax free through the home buyers plan. However, I am now learning of using a RRSP loan, and that you can reclaim your unused contribution room when filling tax. So, there is a lot of info and I don't know what is the best way to use the RRSP to buy a home. Also, professionals are not always going to give you the best advise, so that's why I seeking opinions from those that may be more familiar with what I am asking. I would really appreciate your help in any way.
Hey, Adrian. Thank you so much for the video. It helps a lot to understand banking system in Canada for newcommers. Great Job! I have a quick question though, for international students who want to save some money for the future, what type of saving acount is suitable?
You don't have to be a citizen or a permanent resident to open these accounts! As long as you live in Canada and have a valid SIN, you can open ALL of these accounts! 😁
Of course the RESP is meant for your children and the FHSA only applies if you are a first time home buyer, make sure you watch my dedicated videos on the FHSA, RESP, RRSP and TFSA for all of the rules and requirements to follow 🙂
Again focus on your goals. If you have kids, the RESP is the winner for that extra 20% grant money. If you want to buy a house, then focus on the FHSA. Now between the TFSA and RRSP will depend on your goals, income bracket etc. But the TFSA is the most flexible =)
Nice Video, if i go to another country like USA for living, can I keep my TFSA and RRSP account? If I want to withraw all the money, how much it will be taxed ?
You should speak to an accountant who deals with international residencies for your specific situation but generally speaking: you should withdraw your TFSA when you leave Canada since it's tax free
For your RRSP, you can usually keep it open but you can't make any more contributions if you no longer live in Canada. Again this is complex and it depends on many factors so there's no one-size fits all solution =)
Absolutely that can be a great strategy! That way you get to lock in a tax refund and still enjoy tax free investing! Just make sure you intend to buy a house within 15 years!
Personally, if I am unable to max out the $8K in my FHSA this year I will do just that! Transfer stocks from my TFSA or even from my margin account into my FHSA
Hey Adrian, trying to figure out if FHSA is dinged by the US withholding tax of 15% on US investments, does it have that same advantage of not being hit with this tax like the RRSP?
They are all totally separate with their own rules and different contribution rooms. I currently own a TFSA, RRSP, Non-Registered and will be opening an FHSA all within Questrade =)
So yes you can open all 3! If your goal is to buy a house within the next 15 years, I would prioritize the FHSA. It is more powerful and offers the BEST of both the others so try your best to put in $8K into your FHSA every year =)
Great video. Do you have any videos or are planning any regarding using low-interst loans to fund an RRSP? For example, using a 7% or 11% line of credit to fund a 6% limited-time available RRSP financial product, but that you could pay back the credit in maybe half a year. Are there implications, is it worth it or not? Thanks
Great content as usual 👏👌👍 As you mentioned in another video we can invest n buy stocks with the money we put in TFSAcan we do the same with RRSP every year we get some through TFSA so when we reach 65 then we withdraw RRSP without paying tax ?
I'm happy to help! And no no, that's the difference between the TFSA and RRSP. With the TFSA, you put money in, you DON'T get a tax refund but you can grow tax free and withdraw tax free
With the RRSP, it's the other way around. You put money in, you get EXTRA money from a tax refund upfront. Then your money grows tax-sheltered for decades and when you retire, you withdraw BUT you pay taxes on that withdrawal. The idea is that if you withdraw in retirement in a low tax bracket, the taxes you pay in retirement will be lower than the tax savings you earned today (plus the years of tax-sheltered growth etc)
Make sure you watch my RRSP Explained videos to understand how they work, especially Chapter 2 which is all about how RRSP Withdrawals are taxed =) ruclips.net/video/gcYlQl6hF6w/видео.html
Love your videos! Question: My employer doesnt match any of my RRSP contributions, I have a DC Pension Plan that they match and also an ESP that they match at 50%. What would you recommend in this scenario? Thank you!
There are several versions of employer matching incentives like RRSP matching, RPP, DCPP etc There are a few differences between them and always consult with your HR department to clarify your employer's specific policy. But whatever amount they match, try to max that out! That is FREE money that you don't want to leave on the table
But once the matching amount is maxed out, I would stop contributing. The real benefit is the free money through matching. Without that, you can get far better returns investing on your own since you can avoid those hefty fees!
So yes max out that matching amount but also consult with HR to make sure you understand their corporate policy! And ensure you remain within your RRSP limit since they all share the same contribution room =)
🎉 As always, you have the best content regarding investing for Canadians!!!! Question: (thank you in advance) Since you get more room in RRSP and TFSA annually, in an effort to “course correct” past investments, can we simply transfer some of our investments in our marginal account (like US Dividend ETFs) into RRSP/TFSA when more room opens up? Are there any concerns or tax implications/reporting? We have to pay for any gains in the marginal account, but since we didn’t technically “withdraw” this money , is it accurate to say no taxes to pay in this transfer, even if this investment grew(while inside marginal account)? Does this need to be reported separately for tax filing..? And also, the contribution limit of the registered account would be reduced by this transfer amount and if transferred to RRSP, the transferred dollars would be tax deductible?
Also check out my YEAR END Tax Savings video where I discuss that exact strategy. Transferring stocks from your Margin account into your TFSA as soon as you get that new room! Yes it can be done but you will be taxed those capital gains as if you sold them. It's called a "deemed disposition" since they are moving into a tax-free account, they are considered to be sold first (so you'll owe a tax bill next year) ruclips.net/video/xLXup5L-S2Q/видео.html
And for your last question, yes! Transferring into an RRSP is treated the SAME as doing a regular RRSP contribution. It will take away your available room and that amount you transfer will be tax deductible. Hope that helps! 😁
What's the best strategy for a non-registered cash account - best things to put there from tax point of view? I assume it's again Canadian dividend stocks since that's the lower tax, together with lower capital gains tax on growth?
Hi Adrian, I have followed your channel for some time now. I find it clear, constructive and up to the point with no un-needed fillers. Thank you for covering RESP. We have got our PR cards and will be moving to Canada in a few months. My daughter is now 13 and per your suggestion that we should only put 2,500 into the RESP annually to get the $500 from the government. Does this still apply to my daughter or should I just put in 12,500 annually for 4 years and get the $500 per year as the time is limited and I would like the portfolio to grow faster. Regarding TFSA, once the stock pays a dividend, am I allowed to purchase any stocks with it (I am not a big fan of DRIP)? Lastly, I would love for you to do a video on BPA as I cannot find any Canadian RUclipsr discussing about BPA. It’s somewhat confusing specially for us new immigrants. Thank you for doing an amazing job of explaining about taxes better than any other channel. God bless!
Thank you for those kind words and welcome to Canada very soon! 🇨🇦 Yes your daughter will be eligible for those RESP grants as soon as she moves to Canada so contribute $2500 every year to lock in that extra $500. You won't be able to reach the maximum grant amount of $7,200 because she is already 13 but try to get as much free money as you can! =)
My priority would be to put $2500 into her RESP every year to get the max $500 of grants and then focus on the TFSA instead. Without the grants, the TFSA is just better than the RESP since it's entirely tax free. But since you are new to Canada you will only have $6,500 worth of TFSA so you can likely max it out right away
If that's the case then yes you can contribute even more into the RESP to gain the benefit of the tax sheltered room. So put in $2500 into the RESP, then max out the $6500 into your TFSA and then as you said, put in another $10K or even more into the RESP if you have it available
If you have a wife as well, remember that she can also contribute $6,500 into her TFSA this year so max that out as well. And yes, when you receive a dividend, it will come into your TFSA account as cash and you can choose what to do with it! You can manually reinvest it by buying whatever stock you want but I prefer DRIPs so that it automatically reinvests for me PLUS it will avoid commission fees when I reinvest with a DRIP =)
Finally I have talked about the Basic Personal Amount in a few of my tax videos, most specifically in my 2023 TAX CHANGES video here! =) ruclips.net/video/Zjfy_G1l5ok/видео.html
WealthSimple is very safe! They are federally insured with both CDIC and CIPF which is very important. That means that even if they go bankrupt, your money will be protected by the government
Thanks for refreshing. However, people are having difficulty in getting the job and in running normal life. These multiple lucrative accounts are fine and good for high paying jobs and for industrialized nation.
But you can only invest what you can afford, which makes it even more important to be strategic and prioritize the accounts which will yield you the best returns and tax savings =)
I haven't made a dedicated GIC video yet but I have talked about them! I think they can be useful but only for short term goals where you can't afford any risk!
Anything longer than 2 years, and they are not worth it... you will be losing money due to inflation and missing out on significant returns in the market! Plus your money is locked in which sucks....
You can't avoid taxes but I choose to prioritize Canadian eligible dividends in my taxable account since I get to benefit from the Canadian dividend tax credit!
Do them on your own through an online brokerage! Questrade is my all time favourite and you can open ALL of the accounts on this list with Questrade. WealthSimple Trade is another great option but I only recommend them for Canadian investing (US investing will cost you currency conversion fees) and they don't support the RESP
You can certainly open a TFSA and RRSP with your bank as well but they are much more expensive.... Quetrade is literally half the price with commission fees and they don't charge any commission when you buy ETFs! See my video below on why Questrade is my all time favourite and how to open an account step-by-step =) ruclips.net/video/uoOBRUY8IXQ/видео.html
Thank you again. I'm not very familiar with this subject but I understand them more just a bit now thanks to you. I have a friend who opened the TFSA account with his bank and it is a bit difficult for him to take the money out as he needs to go there every time.@@CanadianTShirt
@@HiepTran-pv9zrAny banks should have an online web account so there shouldn't be any reason to go there in person.... And you can hold MULTIPLE TFSA accounts! You can have one with your bank, one with Questrade, one with WealthSimple. That's fine! I personally own 3 different TFSA accounts just remember that they all SHARE the total available contribution room! =)
Awesome video as always! Thank you!! Do you know if we can contribute to FHSA this year (2023 for example) and claim the tax refund in the next year (for example 2024)?
Absolutely! Just like the RRSP, you do NOT have to claim the tax deduction right away! You can carry it forward to a future year. If you expect to be in a higher tax bracket next year, then this can earn you a significantly larger tax refund!
Check out my RRSP video all about carrying forward this tax deduction, the exact same thing applies with the FHSA =) ruclips.net/video/Wm2nOmqOqCQ/видео.html
Important point, it's only worth it to carry forward the deduction if you expect to be in a larger tax bracket! If your income increases but you remain in the same tax bracket, then you'll get the same tax refund so it's not worth waiting. In that case, you might as well get the money as soon as possible so you can invest it =)
Hey! thanks for the video. What I dont get is... may I max all of them? If I have idk... 100k to save a year. Can I max TFSA, RRSP and FHSA? or there is a shared limit you cannot put more than 20% of your income in no-taxeable income
Not at all! You can and should strive to max out all of them! It's very hard to do and most people will never have that luxury but yes you can max them all out!
Hi Adrian, if by some chance I over contributed to my TFSA for 2022, should I withdraw the overage or can I leave it there to act as my investment for 2023? Thanks!
How do you get to the point that you can have a 3 month buffer without investing? That’s at least $15000 sitting liquid in an account. How do you save when you can’t get through a month without going into overdraft?
That's the root of it all.... There is no way to get ahead if you are living paycheque and paycheque and spending ALL of the income you earn... If that's the case, then it's only a matter of time before you fall into debt because unexpected expenses WILL happen! You can't avoid it... the only thing you can do is prepare for it
I wish I could give you a better answer but theres' no secret or shortcut. You just have to find a way to reduce your monthly expenses and hopefully increase your income at the same time, if possible. Obviously that's harder to do if you have a family and kids depending on you. But if you don't find a way, you'll just be treading water..
I cannot stress how important this is. If you are living paycheque to paycheque, then please do NOT risk investing any money... I get the temptation, you want to start making your money in your sleep and you want to start growing. I get it, but investing always comes with risks. And you should NEVER be forced to sell your investments at a low point if an emergency happens. That's why it is CRUCIAL to build an emergency fund to prevent that. I don't know how helpful my answer has been and I feel for you man but you gotta find some way to reduce those monthly expenses... there's no way around it
@@CanadianTShirt yes I wish that I could reduce my monthly expenses. With only old vehicles and no payments on them I just hope that I don’t have to go further into debt fixing them. I have increased my income from $55k to $120k but the 10 years that I spent making less than $60k my debt just went through the roof and I remortgaged twice to get rid of high interest debt. Now just my minimum payments, mortgage, insurance, bills, food, and gas are $4800/mth. Then there is vehicles to fix and 3 kids to buy clothes. I try to pay off as much debt as I can but most months I will pay off $1000 then have to use my 5 or 6 hundred off my line of credit to not get hit with overdraft fees. I do have RESP and TFSA and RRSP investments. Nothing substantial but I don’t want to miss out on free money from them. I even use my debt to purchase RRSP so that I can get it back come tax time. Some days I wish I could just declare bankruptcy and start fresh. But they won’t let me do that because they make too much interest off of me holding so much debt
There are many complex rules when it comes to losing your Canadian residence status, in many cases you can keep your TFSA open but you can't gain any new room and you can't make any new contributions (without facing steep penalties and taxes)
Hello. Just something that I am considering. Would like thoughts and opinions. A possible retirement income portfolio in my TFSA account..... 153000 shares of FIE, 8000 shares of CSAV and 6000 shares of ZWC. Just a foundation to start. Live off 50% of the income and reinvest the other 50% to add/expand the portfolio monthly.
Do you mean GICs? I will be making a whole video about GICs, yes they can serve a purpose if you NEED this money in the short term (less than 3 years) and you can't afford to take any risk with the principal
And yes you can hold GICs in ALL of the accounts discussed here (TFSA, RRSP, RESP or FHSA) You can also hold stocks, bonds, ETFs, REITs, GICs or cash =)
Thanks for all the videos. I didn’t get one thing about FHSA, so when we say it’s also combination or RRSP and TFSA, does it mean that we contribute to FHSA from our gross salary before tax, not net income like in case of TFSA?
The rrsp won’t generate passive income though. If I maxed out tfsa, I’m debating on doing cash account vs rrsp. The former will help grow my dividend income and the snowball effect; the latter does not and I won’t see it till I retire. Any advice?
Sure but that has nothing to do with the RRSP.... If it's a growth stock, there's no dividends. Doesn't matter which account you hold it in: TFSA or RRSP or taxable account etc
Hey thanks for the reply! The limit of RRSP is 18% of your last year salary. But is that gross salary or net salary? If I maxed FHSA and TFSA will it impact my RRSP year amount for the next year? (I added it as a new question so others can see it early) thanks
Hello, as a Canadian I love your videos and I got a lot of knowledge from them. I would like to ask: When I open a new TFSA account with a new brokerage firm and I want to transfer money to that account from another TFSA account, would that money transfer will reduce my available TFSA contribution limit? Thank you
Because you are transferring from an existing TFSA it would not change your contribution limit. If you transfer from any other account type to a TFSA, then it would count towards your contribution limit and reduce what room you have left.
Yup! I've already got a video about CPP (canada pension plan) and the important changes for 2024! ruclips.net/video/rICT8RpVKS8/видео.htmlsi=NuY84McfRHF-R2Du
![Hunxho - Ball Forever [Official Video]](http://i.ytimg.com/vi/nki9ZTF9Uls/mqdefault.jpg)
Watch my CANADIAN TAX GUIDE to learn how taxes work and the rules & benefits of these investing accounts! 🇨🇦
ruclips.net/p/PLj8bU3AuW2qEA_ik7NOAIkBY02nt7KAPj
I also have specific playlists for the TFSA, RRSP and RESP. View my playlists on my homepage. I included the RRSP playlist below 👇
ruclips.net/p/PLj8bU3AuW2qHOikk4VRpSDXCZTuH7eUhz
@@CanadianTShirt What do you recommend to hold in RESP account ?
Love that the solution to the title was in the first minute no long intro just straight to the point
That's what I try to do! I hate the idea of wasting anyone's time. That's why I talk fast, get to the point and cut out the fluff =)
@@CanadianTShirt Love it. Hey, do you ever put any money extra on your home principal to try to get it paid off faster, or do you invest all of your extra money into mutual funds so that it grows to its maximum capacity?
Adrian's knowledge is not just impressive; it's delivered in a way that's relatable and easy to understand. Plus, the guy does it all in a T-shirt, which adds a touch of authenticity that I really appreciate. As a relatively new comer to Canada, these videos have been really helpful, making my transition to Canada smoother. So, huge thanks!
Thank you so much for those kind words! I really do appreciate it and welcome to Canada! 🙏
And yes I will always trust a guy in a t-shirt more than a sweater.... you never know what they've got up their sleeves 😆
Love your channel! From one Canadian in a t-shirt to another.
You got it buddy! T-Shirts all year long! 😎
Wow thanks so much for the Canadian-specific educational content! I immigrated here 5 years ago and behind on my retirement plan, so this is super helpful.
I'm so happy to hear that! I'm glad you found my channel and I hope you make the most of your retirement fund! 😁
Thanks Adrian. After I watched this video, it confirms my more than 10 years old investing strategy still on the right track. I pay off my credit card every month. I used TFSA helping me for my home down payment. There was no FHSA available at the time. I paid off my mortgage couple years ago. Now, I can really focus on investing in TFSA and RRSP now. One thing, I want to share with the subscribers on this Channel: Please ensure you pay off your credit card every single month. It helps to build up your credit score and it will give you more finical freedom to invest. Better credit score will help you to get a better mortgage rate when you are negotiating it with your bank.
100% buddy! I'm so glad to hear that your strategy has paid off! Having no mortgage and now focusing solely on long term investing is an incredible position to be in! 😁
I'm Canadian and I love wearing t-shirts. You're also very good at explaining how we should be saving our money here. Thanks for your service.
It's my pleasure Jack! As one Canadian in a T-shirt to another! 😁
Thank you was about to open a RRSP and u changed my mind. I got TFSA’s no way close to its limit. This was really well done. Fast and simple.
I'm happy to help! And remember you can certainly do both! Invest a portion of your money in the TFSA and some in the RRSP! This breakdown will depend on your tax bracket and other factors =)
I love that you covered the RESP, too many forget about it :-)
I don't know why.... the RESP is SUPER powerful if you use it right and max out those grants! 😁
Looking forward to the RRSP vs TFSA debate video. My buddies and I are always fighting over this topic. Your videos are some of the most that I share with friends and family. Thanks man.
Thanks for spreading the word! I really appreciate that! 🙏
Ya those debates can get heated and there is a TON to discuss! I did a short condensed version in this video but there are SO many scenarios to consider when deciding between the two so stay tuned! =)
Super informative. I always search up this video for when I need a refresher
Thank you! That's what I LOVE to hear! 🙌
Absolutely great video on the many investment accounts / options! Your simple lay-person's explanation makes it very easy to understand and apply! I say "great video" about most of your videos, but this surely is one of your best on investing accounts!
Thanks for your continuing commitment to making Canadians financially literate!!
Thank you so much Kimmy! I am VERY proud of this video! It certainly wasn't easy to make... I had to rewrite the script so many times to get it right. It's hard to summarize 5 different investing accounts in a 10 minute video but I'm happy with how it turned out! 🙏
Love your content. So much information that can be learned here. It's unfortunate that such knowledge is not taugh in schools. Keep these vids coming
I couldn't agree more! There's no excuse why these fundamentals are not taught in high school but I know that some jurisdictions are starting the incorporate personal finance in their curriculums so that is great news! =)
I just found your videos on RUclips after listening to other Canadian finance podcasts for a few months as I am newer to investing and taxes, I first heard you as a guest on the more money podcast and I wish you had your videos available in podcast format as they would be great to listen to in the car. You’re videos are by far the best Canadian finance videos because you talk about important and useful topics and get to the point right away. I wish I found your videos sooner because I would have learned a lot more a lost faster. I look forward to going through all your videos and future videos. Thank you Adrian!
Thank you so much for those kind words and I'm glad you found my channel! Yes Jessica is AWESOME and I had such a fun time on her podcast! I hope to join her again! 😁
One of my goals for 2024 is to convert my videos into audio-format podcast so I hope I can get that launched soon. I'll keep you posted! =)
Although I do find that the visual component of my videos is very important (the notes I put on the screen etc)
So many useful information that is just crucial for every Canadian to know. I hope all the best for you and your channel!
Thank you so much for those kind words! I'm so happy to hear that my videos have been helpful! 🙏
If you are in a high tax bracket I would say RRSP>TFSA because setting aside money in RRSP gives you a bigger tax return which you can put in TFSA
That's a great point and a very popular strategy! Contribute to the RRSP and then use those tax refunds to contribute to your TFSA. You get the best of both worlds =)
I absoluttley love this. Thank you for making these things so easy to understand and the best steps to take advantage of each account!
I'm happy to hear that Dale! It can be confusing keeping track of all the different accounts and their benefits but I'm glad this video was helpful! =)
Great video! I haven't been able to contribute to my investments as much as I had during the lock-downs. Now with my higher expenses but also higher tax bracket, I tend to only focus on my RRSP. But I really should contribute, even if just a little, to my other investing accounts. RRSP seems to be one of the last things on your list, unfortunately my job doesn't offer RRSP matching haha.
Each account offers different benefits and some accounts will favour individuals with higher incomes etc. It's a shame that your job doesn't offer RRSP matching but I'm glad to hear that you are creating your OWN retirement portfolio! 😁
Keep it up buddy! 🙌
Your videos are pure GOLD thank you for everything I couldn't make it to MTL to meet you with the rest of the Blossom team I hope you will come back soon
Thank you so much! I really do appreciate those kind words! Yes the Montreal even was so much fun! Don't worry, I will definitely be back! 😁
Great Scott! Fantastic video, thanks Adrian!
Thanks Jason! I can always count on you for support! 🙏
Awesome content. Thanks for the guidance, Adrian!
My pleasure! I'm so glad you are finding my videos helpful! =)
Thank you where I was hiding your videos. Answer a lot of questions I had in one video. Good health thank you.
I'm happy to hear that! Happy investing! 😊
Thank you for the video, really helpful ✨
I'm happy to hear that! This video was a BEAST.... it's not easy to summarize 5 different investing accounts in a 10 minute video but I'm glad it was helpful! 🙏
I’ll check back in 3 years once the credit card debt is paid off and the safety net is built up lol 😫
Getting out of credit card debt is HARD! The interest and the numbers are working against you but you absolutely have to focus on it! Every bit of money you can should go towards paying off that debt!
It's not going to happen overnight but stick with it and you'll come out the other end! Also look into a credit transfer! If you can transfer your credit card debt into another card which has a lower interest rate! That will make a big difference! Best of luck! =)
FHSA is hilarious. Max $8k per year is a joke. These days, the average detached home costs $1M. You need $200k min down payment to afford that home. Capping the FHSA at $40k is laughable.
Agreed.
It's not supposed to buy a house on its own, it's 40k double tax free allowance, take it
@@SirTylerGolfabsolutely gotta take what you can get. All adds up
Buying a house in TO, VAN, OT. XD
@@SirTylerGolfand it's also geared towards ppl utilizing their First time home buyers downpayment of putting 5% down. Which will usually for most Canadians be around $30,000-$40,000. The cap of the FHSA contribution. Coincidence...I think not 🤔
Thanks for this intro. I will replay it several times and make notes. Right now taking McGill U's mini-course to get a better understanding of personal finance.
However, in addition I think I need to see a financial advisor since my situation might not be cookie cutter: very low income (so far never pay any income taxes), retired, have TFSA and just started an RRSP, not a property owner, intend to give up Canadian residency within five years, etc.
I see pluses and minuses to TSFA vs. RRSP. Bottom line: while the federal governments of both Canada and USA (relevant if getting dividends or distributions) make it advantageous to organize and plan, it's not a tax-free free for all system like Dubai or Brunei. And there are some complexities. So for the little guy with very little wealth it is less complicated but not super simple.
Very helpful vid. amazing work!
Thank you! I'm glad you found it helpful! =)
Fantastic information. You earned a subscriber in me.
Thanks man! I appreciate those kind words and welcome to the channel! 🙏
Awesome info here man!
Thanks buddy! I appreciate that! 🙏
That's a great comparison video. We will appreciate if you make one video every 6 months, if there is any updates in rules since your previous videos. I,e: before on RRSP, we were able to withdraw up to 40k to buy a home, but now because we have FHSA, we can not do same thing with RRSO anymore. I am following you for majority of my investment research, and also watching your 2 or 3 years old videos. So if there is quick update./changed rules video there, it will be helpful for all followers.
You are referring to the Home Buyer's Plan with the RRSP! Don't worry, the FHSA does NOT prevent you from using the HBP! You can use BOTH the FHSA and the Home Buyer's Plan together!
And just to clarify with the Home Buyers Plan, you can withdraw up to $35K from your RRSP, not $40K. But don't worry, you can combine this with your FHSA to really help out with that down payment =)
@@CanadianTShirt Thank you so much! for quick reply back. Your channel is so helpful, I am sharing with all my friends and families!
Thanks buddy for spreading the word! =)
im thinking of balancing my investments into both FHSA & TFSA. my FT doesnt do matching. whats ur take on splitting up the money invested between the 2 accounts? i want to save up for my first home but also wanna be invested in some stocks/ETFs in my TFSA. great video as usual
Ideally, you want to max out BOTH accounts every year but obviously that would take a lot of money: $14.5K is no joke.... ($8K FHSA + $6.5K TFSA)
If you are certain that you are buying a home in the next 15 years, I would prioritize the FHSA and try to put in that $8K every year. The FHSA has ALL the benefits of the TFSA plus you get the tax refund every year so it's the clear winner, as long as you are planning to buy a home
And the FHSA and TFSA face the same tax treatment (100% tax free for Canadian investments but face a 15% withholding tax on US dividends) So whatever investments you hold in a TFSA you can also hold in an FHSA. Just keep in mind your time horizon! If you plan on buying a home in the next 2 or 3 years, then you need to be far more conservative with your investments. I'll be making a whole video on FHSA investments based on different scenarios =)
@@CanadianTShirtooo can’t wait for that video, definitely looking forward to that one
I would like to request a bit more technical video where you explain how to analize and understand a long earnings report. For instance from TD Bank last quarter (came out on August 23rd 2023). It would be nice to know what to focus on as well as understanding the more relevant terms. Thank you for your great videos
Absolutely! I have made a few videos on how I analyze stocks but I haven't made a dedicated one on earnings reports. There is a TON to discuss so it might have to be a series of multiple videos =)
Thanks for the great suggestion! =)
Well if you make a series on that we will be very happy! Please choose stocks from different industries then. For banking TD would be amazing but it would also be great to add some tech stock. Thank you very much for your great videos!
There's one more consideration when it comes to holding eligible dividend payers (TD, Enbridge, CNR, etc). You want to hold these types of stocks in your taxable account rather than your RRSP, if you can. There are tax credits for receiving eligible dividends, but you only get credit if they're in a taxable account. If you hold these in your RRSP you won't pay tax now, since it's deferred, but you wont benefit from the tax credits. When you go to pull that dividend income from your RRSP later then you will be taxed. The tax credits on eligible dividends vary from province to province, so you'll want to play around with a tax program to figure your personal situation out, but it seems that roughly the first $50,000 of eligible dividends per year is laxed at a very low rate after credits, and tapers off going up to $100,000 per year. That's a lot of tax savings you'd be missing out on if these are in your RRSP. This scenario doesn't account for capital gains if your share prices appreciate significantly, however capital gains become one of the most tax efficient sources of income as your income level rises.
Is the FHSA still the way to go if you’re unsure about ever buying property and have a DB pension plan? Thanks!
Again, great advice for the long-term investments. Are you planning advice for short-term for individuals who started out further on years. i.e. 8 to 12 years before retirement.
Absolutely I will! The shorter the time horizon, the trickier it gets and the more factors you have to consider. Generally speaking, the closer you get to retirement, the more conservative you want your investments. So focus more on the well established, blue chip dividend stocks and ETFs and even fixed income products like bonds or bond ETFs =)
I work in film so this couldn’t have come at a better time 😊
It was meant to be! I hope you find my blueprint helpful to strategize and prioritize where to put your money first! 😁
By the way, I am a HUGE movie nerd!!! What have been your favourite film projects? If you don't mind me asking 😊
@@CanadianTShirt I don’t mind at all. Here’s a few movies (not necessarily great), and TV projects:
- Suits
- Handmaid’s Tale
- It
- See 3
- Slumberland
- Jupiter’s Legacy
- Locke & Key
So many, but that’s just a few of them!😉
@@donnapugWow! That is certainly an exciting career! Really cool stuff! 😁
New follower to your channel, thank you so much for making these videos. Amazing work. Quick question: how are you defining high vs low income/tax brackets? Thanks again.
I'm glad you found me and welcome to the channel! 😁
It's definitely relative but I would generally say anything above the second tax bracket is high income, especially if you expect your retirement income to be lower than your working income (which is true for the vast majority of Canadians)
What a great video to start the weekend! I was actually debating over which tax sheltered account to use up first. So thank you for making this video! ❤
Now that we are in a recession, it would be very helpful to know which ETFs and Reits are worth buying. So it would be great if you can make a video addressing this topic. As always, thank you for enlightening us with such great content! 😊
Thank you! I know not everyone wants to start off a Saturday morning with a tax video but that's how I roll! 😆
All of the stocks, ETFs and REITs that I buy during good times, I continue to buy during market downturns! Check out my STOCKS TO BUY playlist to see why I invest in these companies =)
ruclips.net/p/PLj8bU3AuW2qFD4sCsCxXdaAADlyiP8bqB
Many stocks and industries are being hit hard especially REITs since they are particularly susceptible to higher interest rates. But as long as these REITs have quality tenants, high occupancy rates, they will continue to be profitable and I have no doubt they will recover! And in the meantime, I'm happy to lock in those higher dividend yields 😊
Adrain, please make a video on RDSP accounts (investing for a disabled child's future). Thank you
I can certainly make a video on RDSP, they have very powerful matching benefits! =)
@@CanadianTShirtThank you! And sorry I butchered your name in the first post!
haha no worries! I've seen a LOT worse! 😅
What is the best investment strategy for maximizing growth exposure and minimizing taxes for the FHSA? Canadian/US dividend stocks, Cdn/US ETFs, CDN/US growth stocks. Keep in mind I'm already using my RRSP for US ETFs and dividend stocks, and my TFSA for Canadian dividend stocks. Thx
With the FHSA, the most important factor is your time horizon! If you are buying a home in 2-3 years, your investments will be very different than if you're holding the account open for 15 years! I'll break down multiple scenarios in an upcoming video =)
I think it's important to note for long-term investing, the FHSA can only be opened for 15 years from inception, so it may be worth waiting 5 years to put in a lump sum of $40,000. You could put $8,000 into an RRSP and when you transfer it to the FHSA, your income from the withdrawal would be cancelled by the FHSA contribution. This way you get more time for tax-free gains on the $8,000 blocks :)
That wouldn't work.
You can use deposit 8000/year + a *maximum* of 8000/year of carryforward.
So you could do:
Open FHSA
2023: $0
2024: $0
2025: $16,000 ($8000 from 2025 and $8000 unused)
2026: $16,000 ($8000 from 2026 and $8000 unused)
2027: $8,000
So you'd save an additional 2 years.
But it should be worth noting that the carryforward doesn't exist until you open an account. So if you didn't open the account until 2025 you'd only be able to contribute $8000.
Also, you'd be missing out on 2 years worth of compound interest.
Nice video. Please guys get find time to spend and enjoy your money as well. It’s not all about savings. 😊
Absolutely! You gotta find balance in life! Enjoy today but prepare for tomorrow! 😁
Thanks Adrian! This is the best video I watched on the YouTub regarding tax free investing account. Besides those tax free accounts, would you be so kind to share you view whether it’s better to invest in participate life insurance (tax free) or to invest in high dividend stock/ETFs in own non registered accounts?
I invest using contracts for difference (CFD) through Oanda Brokers. These are leveraged products 1:50. The broker loans money to trader and charges interest ONLY if positions are held overnight . It’s called holding costs or overnight financing charges. Do you know if these are tax deductible expenses?
In a non-registered account if you are using borrowed money to invest in dividend paying equity, then that interest is tax deductible
If there are other costs associated with investing such as commission fees, those will be baked into the cost basis. So not a tax deduction but it will reduce the capital gains tax you end up paying
I would speak to support at your brokerage and confirm the nature of those fees in your case =)
So we can transfer the money from FHSA to RRSP in case we dont buy a home. When can we do that? Once we reach the max ie 40k? And lets say if we have any capital gains on that, do we have to pay taxes while transferring to RRSP?
You can transfer at any time but my recommendation would be to keep it in the FHSA for the full 15 years, just in case you change your mind and end up buying a home =)
And luckily if you do transfer over to the RRSP, you can transfer the FULL amount! Your contributions PLUS the investment income (capital gains, dividends, etc) There is no tax on the transfer but that money becomes a regular RRSP so you will have to follow the RRSP withdrawal rules and taxes when that eventually happens =)
Amazing content as always Adrian! A lot of your active followers like myself are trying to act in a way to retire earlier in life, in one way or another. Would you still recommend the use of the RRSP for us? If so, what are some strategies we should be considering?
Absolutely! I'm in the same boat! My goal is to be able to retire sometime in my 40s! 🤞
And using the RRSP is a big part of that plan!
"Retirement" isn't set at a fixed age like 60 or 65, retirement is just when you stop working and so your taxable income will be much lower. So if you are trying to retire early, your income will be lower for that year so withdrawing a portion of your RRSP would be a great idea. Since you would likely be in a much smaller tax bracket than you were when you made that initial contribution so you'd be left with an overall net gain in taxes =)
Hello. Are you able to give more details about the RDSP? tks
I can certainly make an RDSP video, I haven't done it yet since it doesn't apply to the majority of Canadians but there is certainly a lot to discuss! =)
Great video as always. Thanks for making these 😀
Regarding FHSA, would it be possible to open one by someone who has purchased a first home which is currently on mortgage and use the returns of the fhsa to pay down the already existing mortgage?
Unfortunately no. In order to open an FHSA, you must not have lived in a house you own within the past 5 years
The whole point is to help you buy your first home so if you already live in a home, you won't be able to open this account. But I like where your head it at! =)
I would love the insight of your community, I'm hesitating between three options
1) Investing in my future child RESP (no grant part of 14,000$). I will contribute of course already top the 2,500$ amount elligible for grant
2) Putting the 14,000$ down on my mortgage renewal in 2024. (interest rate would probably be between 6-7%)
3) Giving this money to my parents. They could invest it in their TFSA and let it grow to cover future medical expenses. I would probably need to cover theses expenses in the future anyway, so why not let it grow tax free.
Can you make a video of what to invest in the FHSA account?
Absolutely that video is certainly coming! It really depends on many things, primarily your time horizon. If you are buying a house in 2 years vs 15 years, that makes a big difference so I will cover various scenarios in that video =)
Awesome video, Adrian! After seeing you at the Montreal event, it's clear that your enthusiasm for investment remains consistent whether in your YT videos or in person, showcasing your genuine passion. One question for you: I had previously maxed out my tax-sheltered account and started a margin account two years ago. With the introduction of the new FHSA room, do you think it's wise to transfer stocks from my margin account to FHSA, or should I just deposit cash into the FHSA?
Thank you for those kind words, it was a pleasure meeting you as well! The Montreal event was so much fun! 😁 Excellent question! I cover this in detail in my video on Transferring BETWEEN Accounts here:
ruclips.net/video/WBqJaAFYcRQ/видео.html
This video is a few years old, before the FHSA existed but the same applies when going from the Margin to TFSA or Margin to FHSA
You can certainly transfer up to $8K worth of stocks from your margin into the FHSA just remember that this WILL be a taxable event! It will be treated as if you sold those stocks, so you will be taxed capital gains on that "profit"
If you have the cash, I would just contribute cash into the FHSA to avoid triggering those capital gains taxes. But it's up to you, you might want to do a mix of both! Contribute some cash and then to max out the rest of the FHSA, transfer from your Margin. Just be prepared to pay some taxes in April on those capital gains =)
@@CanadianTShirt Thanks for the clear explanation Adrian. Makes total sense.
Great video.
Can you please make a video on RPP - rules and tricks.
Thanks.
I can certainly make a whole video on the RPP but I have spoken about it in detail in my RRSP Mistakes video here =)
ruclips.net/video/I8k95_R_L_Q/видео.html
As well as some of my other RRSP Explained videos, make sure you watch the whole RRSP playlist =)
Thanks!
Wow! That is incredibly generous of you! I have never received a super thanks like that before! 🙏
I'm happy to hear that you found this video so helpful! You're the best!
First, it was nice to see you and talk with you in person during social event in Montreal! My employer matches 45% of my RRSP contributions until I meet my CRA given RRsP contribution limit. Is it more beneficial to prioritize my RRsp contributions until it's maxed out?
It was a pleasure meeting you as well, the Montreal event was so much fun! 😁
A 45% match is still great so take advantage of that free money! I would suggest maxing out the employer matching amount and then stop there. After the matching is finished, the rest of your RRSP room should be in a self-directed RRSP where you buy your own stocks or ETFs and avoid paying those high management fees =)
But yes always keep in mind your available RRSP room (you will see your room from your Notice of Assessment from your most recent tax return) Make sure you do NOT exceed your limit! =)
Could you please make a video on the best investment strategies for TFSA to maximize its benefits, as I dont really know what to buy there. Like grow/divident stocks, ETFs or gics.
In one of your previous videos you said that it makes sense to put most of the divident stocks on TFSA. Is it so?
What will you suggest in such case? Im new to Canada and dont really understand the market yet
Great question! I talk about this in detail in my TFSA MISTAKES video so check that out!
ruclips.net/video/s4cBibLATOU/видео.html
I would suggest CANADIAN dividend stocks, ETFs and REITs since they will be 100% tax free in a TFSA. Your US dividend stocks should go in an RRSP instead to avoid that 15% withholding tax on US dividends. And avoid the risky, speculative plays in a TFSA since if you lose your money, there's no way to salvage that with a capital loss tax credit (can't do this in a TFSA but can do it in a non-registered account) And even worse, if your risky stocks crash and burn in a TFSA you will permanently lose that precious contribution room! Watch my video above for more details but I hope that helps! =)
@@CanadianTShirt ok, thank you! Will watch it again more precisely
Can you please explain the Withdrawl and direct - Indirect transfer / deposit forms for FHSA ?
I'll be making more specialized videos on the FHSA but the withdrawal forms should be fairly self explanatory. What specifically is your question?
Subject: Query Regarding Group Retirement Savings Plan (RSP) Contribution
Hi
I hope this message finds you well. I have a question regarding my RRSP contribution and the company's group retirement savings plan (RSP).
Given that my taxable income for 2022 was zero, my RRSP room for 2023 is also zero. However, my office offers a *% matching policy for the group RSP, which I understand can be used as an RRSP contribution.
I'm contemplating starting to invest in this fund from December 2023. Would there be any issues with this approach? Alternatively, can I report this investment in my 2024 return if there are any complications in including it in my 2023 return?
Your guidance on this matter would be greatly appreciated.
Thank you,
Questions: does a car loan (7.99% I think) fall under high interest? I want to say yes but not getting taxed on other things might be more worth it…
Second question: for the FHSA, does the $8,000 per year built up like tfsa? If I open one by the end of 2023 and only put $1,000, could I put in $15,000 in 2024?
Hmmm 8% interest is kind of pushing it.... technically yes you "can" get investment returns beating 8% but it's not as likely... In that case, an 8% SURE THING is probably better than a 10% "maybe" so I would likely push towards paying off the car loan
I'm guessing you watched my video on MORTGAGE vs INVESTING? I cover that topic in greater detail and how to decide between the two.
If we're talking an RESP where you can lock in a guaranteed 20% return on top of your investment income, then I would put RESP over paying down an 8% loan. If it's FHSA, where you can expect a significant tax return, again probably FHSA would win in that case. But just a TFSA or non-registered, I think 8% loan might be better for peace of mind. Again you can try a hybrid approach! Pay down some of the loan and invest the rest! =)
The unused FHSA contribution room does carry forward but only ONE YEAR at a time! So if you put in $1000 in 2023 then in 2024 you would have $15K worth of FHSA room. But if you put in nothing in 2024 then in 2025, you would still only have $15K worth of room. Whereas the TFSA, the entire unused room is carried forward to future years
So with the FHSA, you can only carry forward $8000 of unused room into next year. So it's best if you can try to max out that $8K (or as much of it) every year until you reach the lifetime max of $40K. Hope that helps! =)
"Thank you, Adrian, for your detailed insight. I have invested some money in a TFSA under SEG funds. Can it outperform mutual funds or stocks? Could you create a video on the pros and cons of SEG funds? As a first-generation immigrant, it's challenging to save money due to the increasing high cost of living and rising mortgage rates."
I can certainly make a video about SEG funds, there is a lot to discuss and a lot of misinformation out there so be careful...
And remember SEG funds usually cost even more... so please be aware of those high fees...
Hey Adrian! Awesome video as always! Question on the RESP. What's your opinion on contributing a large sum (example $15,000) in the RESP in the first year. I'm thinking that the benefit of front-loading is at least you're letting a large amount of money grow for 14 years. True, you would only get $500 from the govt that first year, but letting $15K invest for ~14 years would be hugely beneficial. Can't beat the benefit of time in the market.
That would be a great idea but ONLY if your TFSA is already maxed out! The power of the RESP over the TFSA is the 20% government grants. You take those grants away, and the TFSA is just better than the RESP in every way, since it's more flexible and it is fully tax-free whereas the RESP is "mostly tax free" under your child's name
That's why I suggest putting in $2500 into the RESP to max out that $500 of grant money and then stop and move onto the FHSA / TFSA/ RRSP. Once those are maxed out, then come back to the RESP. At that point, if you have $15K, then sure put that $15K into the RESP to let it grow tax-free. From that point on every year, just put in $2500 into the RESP and continue to fill up the other accounts as you gain more room. Hope that helps! =)
@@CanadianTShirt Gotcha! That makes sense. Thanks man
This is simply great....
I'm glad you found it helpful! Happy investing! =)
Thanks man!
My pleasure! I'm glad you found it helpful! =)
POV: Questrade
Question:
Can I buy stocks/mutual funds in TFSA all year and by the end of the year I could decide how much/many investments i want to transfer to FHSA straight from TFSA?
I haven't done that personally yet but as far as the legislation is concerned, that should be possible. Most transfers to and from the FHSA are with the RRSP since they have the same tax deductible nature. I don't see too much value in your suggestion though... I'm guessing you want the flexibility of the TFSA and you don't want to lock in that money into the FHSA until the end of the year?
I'm not sure what you're suggesting is worth the trouble.... if you think that you will need to withdraw this money soon, you shouldn't be investing with it anyway (it should go into savings instead) But if you want to do this transfer approach, make sure you give yourself ample time. You want to ensure that the transfer is complete and processed before the end of the new year =)
@@CanadianTShirt Thanks for replying! Yes, I wanted the flexibility.
Adrian! Thank you for teaching me and so many people about investing. Can you tell me how one is taxed in margin account? I've max'd out all of my registered accounts. I own a house. No credit card debts.
Congratulations! I will be covering the taxation of a margin account soon so stay tuned!
But long story short: capital gains are taxed at HALF of your tax rate so very tax efficient!
Canadian dividends will be taxed more favourably than regular income because of the dividend tax credit (more complicated, will break down in the video)
US dividends and interest income from bonds and GICs will be fully taxed which hurts. That's why I avoid those in my Margin account =)
Excellent video.
Thank you! I'm glad you found it useful! =)
If you are in the lower tax bracket and your TFSA is maxed out, is it better investing in a non registered account over the RRSP since the RRSP has no benefit towards lower tax bracket income earners as you say?
It depends! If you expect to always be in the lower tax bracket then the RRSP probably won't help you. But if you expect your income to grow in the future then you can contribute to the RRSP and choose to carry forward that tax deduction to a future year to get that much larger tax refund!
I go over this in detail in my video here on RRSP for LOW INCOME! I did this exact strategy when I was a student! I contributed to my RRSP but chose not to claim that deduction. Instead I carried it forward for years until I had a high salary and then I claimed the deduction. Check out the video for all the details =)
ruclips.net/video/Wm2nOmqOqCQ/видео.html
Gradually plowing through your videos, thank you so much for all the info! Still learning. You mention RRSP a lot, obviously. I have an RSP mutual-fund acct with TD. Does everything you say about RRSP also go the same for RSP accounts?
Hello. I need some help figuring out how to best use my money and RRSP to purchase my first home in the Greater Toronto Area. Let's say I would be qualified as a first time home buyer, I don't have a RRSP account, I do have enough savings to max out my RRSP, and I make $100, 000 a year. I am aware using the money tax free through the home buyers plan. However, I am now learning of using a RRSP loan, and that you can reclaim your unused contribution room when filling tax. So, there is a lot of info and I don't know what is the best way to use the RRSP to buy a home. Also, professionals are not always going to give you the best advise, so that's why I seeking opinions from those that may be more familiar with what I am asking. I would really appreciate your help in any way.
Can you make a video just for the RDSP - registered disability savings plan ?
I haven't made that video yet since it isn't applicable to as many people but it's certainly coming! =)
Hey, Adrian. Thank you so much for the video. It helps a lot to understand banking system in Canada for newcommers. Great Job!
I have a quick question though, for international students who want to save some money for the future, what type of saving acount is suitable?
You don't have to be a citizen or a permanent resident to open these accounts! As long as you live in Canada and have a valid SIN, you can open ALL of these accounts! 😁
Of course the RESP is meant for your children and the FHSA only applies if you are a first time home buyer, make sure you watch my dedicated videos on the FHSA, RESP, RRSP and TFSA for all of the rules and requirements to follow 🙂
Again focus on your goals. If you have kids, the RESP is the winner for that extra 20% grant money. If you want to buy a house, then focus on the FHSA. Now between the TFSA and RRSP will depend on your goals, income bracket etc. But the TFSA is the most flexible =)
@@CanadianTShirt Awesome! Thanks for the insights :)
@@Amirhossein93my pleasure! =)
Nice Video, if i go to another country like USA for living, can I keep my TFSA and RRSP account? If I want to withraw all the money, how much it will be taxed ?
Sometimes but it gets tricky and depends on many factors including what country, what will your residency status be, are you moving back to Canada etc
You should speak to an accountant who deals with international residencies for your specific situation but generally speaking: you should withdraw your TFSA when you leave Canada since it's tax free
For your RRSP, you can usually keep it open but you can't make any more contributions if you no longer live in Canada. Again this is complex and it depends on many factors so there's no one-size fits all solution =)
Question-
Would it make sense to withdraw from a TFSA and move money into a FHSA to reap the tax deduction benefit?
Absolutely that can be a great strategy! That way you get to lock in a tax refund and still enjoy tax free investing! Just make sure you intend to buy a house within 15 years!
Personally, if I am unable to max out the $8K in my FHSA this year I will do just that! Transfer stocks from my TFSA or even from my margin account into my FHSA
Check out this video to see how to do an in-kind transfer BETWEEN accounts! =)
ruclips.net/video/WBqJaAFYcRQ/видео.html
@@CanadianTShirt Thanks a ton!
@@resolutejku happy to help!
Hey Adrian, trying to figure out if FHSA is dinged by the US withholding tax of 15% on US investments, does it have that same advantage of not being hit with this tax like the RRSP?
Unfortunately it will be... the FHSA will face the 15% tax on US dividends just like the TFSA
Only the RRSP and other retirement accounts can waive this
Can i open an TFSA AND an RRSP at the same time? And an FHSA on top of that? Is that possible?
Absolutely! You can and ideally should open ALL of these accounts and max them out! 😁
They are all totally separate with their own rules and different contribution rooms. I currently own a TFSA, RRSP, Non-Registered and will be opening an FHSA all within Questrade =)
So yes you can open all 3! If your goal is to buy a house within the next 15 years, I would prioritize the FHSA. It is more powerful and offers the BEST of both the others so try your best to put in $8K into your FHSA every year =)
Great video. Do you have any videos or are planning any regarding using low-interst loans to fund an RRSP? For example, using a 7% or 11% line of credit to fund a 6% limited-time available RRSP financial product, but that you could pay back the credit in maybe half a year. Are there implications, is it worth it or not? Thanks
Great content as usual 👏👌👍
As you mentioned in another video we can invest n buy stocks with the money we put in TFSAcan we do the same with RRSP every year we get some through TFSA so when we reach 65 then we withdraw RRSP without paying tax ?
I'm happy to help! And no no, that's the difference between the TFSA and RRSP. With the TFSA, you put money in, you DON'T get a tax refund but you can grow tax free and withdraw tax free
With the RRSP, it's the other way around. You put money in, you get EXTRA money from a tax refund upfront. Then your money grows tax-sheltered for decades and when you retire, you withdraw BUT you pay taxes on that withdrawal. The idea is that if you withdraw in retirement in a low tax bracket, the taxes you pay in retirement will be lower than the tax savings you earned today (plus the years of tax-sheltered growth etc)
Make sure you watch my RRSP Explained videos to understand how they work, especially Chapter 2 which is all about how RRSP Withdrawals are taxed =)
ruclips.net/video/gcYlQl6hF6w/видео.html
Love your videos!
Question: My employer doesnt match any of my RRSP contributions, I have a DC Pension Plan that they match and also an ESP that they match at 50%. What would you recommend in this scenario? Thank you!
There are several versions of employer matching incentives like RRSP matching, RPP, DCPP etc There are a few differences between them and always consult with your HR department to clarify your employer's specific policy. But whatever amount they match, try to max that out! That is FREE money that you don't want to leave on the table
But once the matching amount is maxed out, I would stop contributing. The real benefit is the free money through matching. Without that, you can get far better returns investing on your own since you can avoid those hefty fees!
So yes max out that matching amount but also consult with HR to make sure you understand their corporate policy! And ensure you remain within your RRSP limit since they all share the same contribution room =)
Thanks for your response!
🎉 As always, you have the best content regarding investing for Canadians!!!!
Question: (thank you in advance)
Since you get more room in RRSP and TFSA annually, in an effort to “course correct” past investments, can we simply transfer some of our investments in our marginal account (like US Dividend ETFs) into RRSP/TFSA when more room opens up? Are there any concerns or tax implications/reporting? We have to pay for any gains in the marginal account, but since we didn’t technically “withdraw” this money , is it accurate to say no taxes to pay in this transfer, even if this investment grew(while inside marginal account)? Does this need to be reported separately for tax filing..?
And also, the contribution limit of the registered account would be reduced by this transfer amount and if transferred to RRSP, the transferred dollars would be tax deductible?
Thank you so much for those kind words! I really do appreciate that! 🙏
I answer that question extensive in my video on How to TRANSFER Stocks BETWEEN accounts! =)
ruclips.net/video/WBqJaAFYcRQ/видео.html
Also check out my YEAR END Tax Savings video where I discuss that exact strategy. Transferring stocks from your Margin account into your TFSA as soon as you get that new room! Yes it can be done but you will be taxed those capital gains as if you sold them. It's called a "deemed disposition" since they are moving into a tax-free account, they are considered to be sold first (so you'll owe a tax bill next year)
ruclips.net/video/xLXup5L-S2Q/видео.html
And for your last question, yes! Transferring into an RRSP is treated the SAME as doing a regular RRSP contribution. It will take away your available room and that amount you transfer will be tax deductible. Hope that helps! 😁
What's the best strategy for a non-registered cash account - best things to put there from tax point of view? I assume it's again Canadian dividend stocks since that's the lower tax, together with lower capital gains tax on growth?
Hi Adrian,
I have followed your channel for some time now. I find it clear, constructive and up to the point with no un-needed fillers.
Thank you for covering RESP. We have got our PR cards and will be moving to Canada in a few months. My daughter is now 13 and per your suggestion that we should only put 2,500 into the RESP annually to get the $500 from the government. Does this still apply to my daughter or should I just put in 12,500 annually for 4 years and get the $500 per year as the time is limited and I would like the portfolio to grow faster.
Regarding TFSA, once the stock pays a dividend, am I allowed to purchase any stocks with it (I am not a big fan of DRIP)?
Lastly, I would love for you to do a video on BPA as I cannot find any Canadian RUclipsr discussing about BPA. It’s somewhat confusing specially for us new immigrants.
Thank you for doing an amazing job of explaining about taxes better than any other channel. God bless!
Thank you for those kind words and welcome to Canada very soon! 🇨🇦 Yes your daughter will be eligible for those RESP grants as soon as she moves to Canada so contribute $2500 every year to lock in that extra $500. You won't be able to reach the maximum grant amount of $7,200 because she is already 13 but try to get as much free money as you can! =)
My priority would be to put $2500 into her RESP every year to get the max $500 of grants and then focus on the TFSA instead. Without the grants, the TFSA is just better than the RESP since it's entirely tax free. But since you are new to Canada you will only have $6,500 worth of TFSA so you can likely max it out right away
If that's the case then yes you can contribute even more into the RESP to gain the benefit of the tax sheltered room. So put in $2500 into the RESP, then max out the $6500 into your TFSA and then as you said, put in another $10K or even more into the RESP if you have it available
If you have a wife as well, remember that she can also contribute $6,500 into her TFSA this year so max that out as well. And yes, when you receive a dividend, it will come into your TFSA account as cash and you can choose what to do with it! You can manually reinvest it by buying whatever stock you want but I prefer DRIPs so that it automatically reinvests for me PLUS it will avoid commission fees when I reinvest with a DRIP =)
Finally I have talked about the Basic Personal Amount in a few of my tax videos, most specifically in my 2023 TAX CHANGES video here! =)
ruclips.net/video/Zjfy_G1l5ok/видео.html
Great Video
Thank you! I'm glad you found it helpful! =)
Hi buddy I am really confused is Wealthsimple safe? If it is does it provide any interest for keeping the specific amount in the account
WealthSimple is very safe! They are federally insured with both CDIC and CIPF which is very important. That means that even if they go bankrupt, your money will be protected by the government
I go over the importance of this CDIC and CIPF insurance in my video on the US Bank collapses here =)
ruclips.net/video/FZjOEIBM-_Y/видео.html
Thank you 😊 so helpful
That's what I love to hear! I'm happy to help! 😁
Thanks for refreshing. However, people are having difficulty in getting the job and in running normal life. These multiple lucrative accounts are fine and good for high paying jobs and for industrialized nation.
Of course everyone is in a different situation! In an ideal world, everyone would be able to max out all of these investing accounts!
But you can only invest what you can afford, which makes it even more important to be strategic and prioritize the accounts which will yield you the best returns and tax savings =)
Hi! I haven't been able to find these videos (I'll keep trying), but do you touch upon GICs?
I haven't made a dedicated GIC video yet but I have talked about them! I think they can be useful but only for short term goals where you can't afford any risk!
Anything longer than 2 years, and they are not worth it... you will be losing money due to inflation and missing out on significant returns in the market! Plus your money is locked in which sucks....
Are there any strategies to minimize the tax impact on dividends earned in a non-registered account?
You can't avoid taxes but I choose to prioritize Canadian eligible dividends in my taxable account since I get to benefit from the Canadian dividend tax credit!
However foreign and US dividends DON'T get this benefit... so they are taxed much higher
Love your content! May I ask if I can open either TFSA or RRSP on my own or I will need a bank to open them for me? Thanks
Do them on your own through an online brokerage! Questrade is my all time favourite and you can open ALL of the accounts on this list with Questrade. WealthSimple Trade is another great option but I only recommend them for Canadian investing (US investing will cost you currency conversion fees) and they don't support the RESP
You can certainly open a TFSA and RRSP with your bank as well but they are much more expensive.... Quetrade is literally half the price with commission fees and they don't charge any commission when you buy ETFs! See my video below on why Questrade is my all time favourite and how to open an account step-by-step =)
ruclips.net/video/uoOBRUY8IXQ/видео.html
And make sure you use my referral link to get that $50 signup bonus! =)
www.questrade.com/?refid=CANADIANTSHIRT
Thank you again. I'm not very familiar with this subject but I understand them more just a bit now thanks to you. I have a friend who opened the TFSA account with his bank and it is a bit difficult for him to take the money out as he needs to go there every time.@@CanadianTShirt
@@HiepTran-pv9zrAny banks should have an online web account so there shouldn't be any reason to go there in person.... And you can hold MULTIPLE TFSA accounts! You can have one with your bank, one with Questrade, one with WealthSimple. That's fine! I personally own 3 different TFSA accounts just remember that they all SHARE the total available contribution room! =)
Awesome video as always! Thank you!!
Do you know if we can contribute to FHSA this year (2023 for example) and claim the tax refund in the next year (for example 2024)?
Absolutely! Just like the RRSP, you do NOT have to claim the tax deduction right away! You can carry it forward to a future year. If you expect to be in a higher tax bracket next year, then this can earn you a significantly larger tax refund!
Check out my RRSP video all about carrying forward this tax deduction, the exact same thing applies with the FHSA =)
ruclips.net/video/Wm2nOmqOqCQ/видео.html
Important point, it's only worth it to carry forward the deduction if you expect to be in a larger tax bracket! If your income increases but you remain in the same tax bracket, then you'll get the same tax refund so it's not worth waiting. In that case, you might as well get the money as soon as possible so you can invest it =)
Hey! thanks for the video. What I dont get is... may I max all of them? If I have idk... 100k to save a year. Can I max TFSA, RRSP and FHSA? or there is a shared limit you cannot put more than 20% of your income in no-taxeable income
Not at all! You can and should strive to max out all of them! It's very hard to do and most people will never have that luxury but yes you can max them all out!
Generally speaking you want to take advantage of all the tax-sheltered room that you have before you start investing in a taxable account =)
Hi Adrian, if by some chance I over contributed to my TFSA for 2022, should I withdraw the overage or can I leave it there to act as my investment for 2023? Thanks!
How do you get to the point that you can have a 3 month buffer without investing? That’s at least $15000 sitting liquid in an account. How do you save when you can’t get through a month without going into overdraft?
That's the root of it all.... There is no way to get ahead if you are living paycheque and paycheque and spending ALL of the income you earn... If that's the case, then it's only a matter of time before you fall into debt because unexpected expenses WILL happen! You can't avoid it... the only thing you can do is prepare for it
I wish I could give you a better answer but theres' no secret or shortcut. You just have to find a way to reduce your monthly expenses and hopefully increase your income at the same time, if possible. Obviously that's harder to do if you have a family and kids depending on you. But if you don't find a way, you'll just be treading water..
I cannot stress how important this is. If you are living paycheque to paycheque, then please do NOT risk investing any money... I get the temptation, you want to start making your money in your sleep and you want to start growing. I get it, but investing always comes with risks. And you should NEVER be forced to sell your investments at a low point if an emergency happens. That's why it is CRUCIAL to build an emergency fund to prevent that. I don't know how helpful my answer has been and I feel for you man but you gotta find some way to reduce those monthly expenses... there's no way around it
@@CanadianTShirt yes I wish that I could reduce my monthly expenses. With only old vehicles and no payments on them I just hope that I don’t have to go further into debt fixing them. I have increased my income from $55k to $120k but the 10 years that I spent making less than $60k my debt just went through the roof and I remortgaged twice to get rid of high interest debt. Now just my minimum payments, mortgage, insurance, bills, food, and gas are $4800/mth. Then there is vehicles to fix and 3 kids to buy clothes. I try to pay off as much debt as I can but most months I will pay off $1000 then have to use my 5 or 6 hundred off my line of credit to not get hit with overdraft fees. I do have RESP and TFSA and RRSP investments. Nothing substantial but I don’t want to miss out on free money from them. I even use my debt to purchase RRSP so that I can get it back come tax time. Some days I wish I could just declare bankruptcy and start fresh. But they won’t let me do that because they make too much interest off of me holding so much debt
Are TFSAs worth it for non-resident Canadians? I think there’s a 1% tax on them or something like that
If you are no longer living in Canada, no do not contribute to your TFSA! You will get penalized for it
There are many complex rules when it comes to losing your Canadian residence status, in many cases you can keep your TFSA open but you can't gain any new room and you can't make any new contributions (without facing steep penalties and taxes)
Hello. Just something that I am considering. Would like thoughts and opinions. A possible retirement income portfolio in my TFSA account..... 153000 shares of FIE, 8000 shares of CSAV and 6000 shares of ZWC. Just a foundation to start. Live off 50% of the income and reinvest the other 50% to add/expand the portfolio monthly.
Lake St. Martin First Nation Manitoba Canada 🇨🇦
I would love to visit one day! =)
What about GCI? A know RBC offers it. 2-5% return
Do you mean GICs? I will be making a whole video about GICs, yes they can serve a purpose if you NEED this money in the short term (less than 3 years) and you can't afford to take any risk with the principal
And yes you can hold GICs in ALL of the accounts discussed here (TFSA, RRSP, RESP or FHSA) You can also hold stocks, bonds, ETFs, REITs, GICs or cash =)
@@CanadianTShirt GIC's yes! Thank you for your response! Very helpful! Also, very excited to see a video about them from you!
You got it! There is a ton to discuss! 😊
Thanks for all the videos. I didn’t get one thing about FHSA, so when we say it’s also combination or RRSP and TFSA, does it mean that we contribute to FHSA from our gross salary before tax, not net income like in case of TFSA?
The rrsp won’t generate passive income though. If I maxed out tfsa, I’m debating on doing cash account vs rrsp. The former will help grow my dividend income and the snowball effect; the latter does not and I won’t see it till I retire. Any advice?
Both of them will compound and see the snowball effect!
Just as long as you reinvest those dividends! Of course in a taxable account, those dividends are taxed and thus it grows at a slower rate
@@CanadianTShirt the rrsp won’t have dividends if it’s in a growth stock though.
Sure but that has nothing to do with the RRSP.... If it's a growth stock, there's no dividends. Doesn't matter which account you hold it in: TFSA or RRSP or taxable account etc
Hey thanks for the reply! The limit of RRSP is 18% of your last year salary. But is that gross salary or net salary? If I maxed FHSA and TFSA will it impact my RRSP year amount for the next year? (I added it as a new question so others can see it early) thanks
Hello, as a Canadian I love your videos and I got a lot of knowledge from them. I would like to ask: When I open a new TFSA account with a new brokerage firm and I want to transfer money to that account from another TFSA account, would that money transfer will reduce my available TFSA contribution limit? Thank you
Because you are transferring from an existing TFSA it would not change your contribution limit. If you transfer from any other account type to a TFSA, then it would count towards your contribution limit and reduce what room you have left.
Can you make a video about the public pension plans
Yup! I've already got a video about CPP (canada pension plan) and the important changes for 2024!
ruclips.net/video/rICT8RpVKS8/видео.htmlsi=NuY84McfRHF-R2Du