all of mine are maxed out right now :)) so im investing in my non-registered for the rest of the year (but keep in mind i am only 27 with low income during the first few years of my working years which is why my RRSP contribution room is a lot lower than yours
@@sapashowdon't forget if your income is low you don't have to claim the RRSP deduction. You may want to wait and claim it is a year when your I come has increased for greater benefit.
Listened to a recent podcast that was talking about not investing too much into RRSP to avoid having "too much" to withdraw as income to avoid jumping to a different tax bracket. Considering I'm in the same boat as you both and just turned 30, this isn't a situation I plan on tackling in the near future, however would be interesting to explore! Maybe something to touch on in a future video?
That's an interesting topic for sure - we'll definitely explore it more in a future video! We're starting to learn more about what happens (or should happen) as you start to approach retirement, so this fits right in 😊
Great video! I'm at a similar point in my investing journey and am trying to figure out what I should invest in in my RRSP. Can you speak a little bit more about home country bias? I have been investing in XEQT (like you guys) but am wondering whether i should start looking to XAW/VXC for my RRSP as well. But then I have also seen Ben Felix (as well as that article from Vanguard) say that 25-30% of a home bias for Canadians is fine and even ideal for reducing volatility. Would love to hear more about what you guys heard from your research!! Your videos have helped me so much and given me so much confidence in my investing journey btw 😊.
Hi steph! I would love to see a video for newbies like me. Answers to questions like what type of stocks to put in the rrsp vs tfsa. For example- dividend stocks , where should they go?, can we buy and sell within the rrsp? Thank you!
That's great Steph, good choice. Cheers! I don't think an RRSP is right for me right now. As a student working part-time, my tax bracket is very low. Right now my TFSA and FHSA are maxed out, and now my goal is to save as much money from working which I will deploy back into my TFSA and FHSA when the calendar strikes January 1. In my FHSA, I don't know my time horizon, so to be safe I'm being conservative buying the CBIL ETF In my TFSA I am investing in roughly equally QQC, VFV, XSMC, ZDJ. Funds inside ETFs are not weighed equally, so I like to buy multiple funds to have greater exposure to each category.
Thank you, and thanks for sharing your breakdown! Love that you have both your TFSA and FHSA maxed out right now. Keep in mind that you can defer your RRSP deductions, and claim them in the future when your income is higher than it is now 😊 but, if you’re not interested in doing that, aiming to deploy your savings back into your TFSA and FHSA during the new calendar year is a great plan!
Thanks for the update on the TFSA, I was curious how your XEQT was going. I am currently working on maxing out my TFSA through a WS managed account. I have also been thinking of switching it to manage it on my own. 3 questions for ya, Does the rebalancing of the XEQT continuously happen on its own? Did you stick to the $10,000 per month of switching over to the new ETF? And do you think once you get closer to retirement that you would switch ETFs or invest in bonds?
Love to hear that you're currently working on maxing your TFSA out 😊 To answer your q's - 1) Yes, XEQT is an 'all-in-one' ETF, and it's rebalanced for you! You pay a slightly higher MER (0.20%) by purchasing an all-in-one ETF that rebalances for you, but it's still a fairly low fee overall (and makes it pretty simple); iShares says that it's 'continuously monitored and rebalanced as needed', which seems to be when the weightings drift more or less than 10% from where they're supposed to be 2) I did for the first 3-4 months of the year, and then ended up doing a bigger lump sum to finish up (mostly because I was so close to maxing out my TFSA in general that I just decided to finish making the purchases of XEQT!); we're actually going to post a video all about DCA vs lump sum in a few weeks with some of our updated thoughts on the topic 3) Good question! We've been doing a lot of research lately into how your investing strategy could / should change as you start to approach retirement. We'll definitely be sharing videos on this topic in the near future 😊
Are you going to use the form where you defer your RRSP or a portion of your RRSP to maximize tax reductions? Would be nice to get a walkthrough of that. :)
Thank you for this video and the specifics of which investment! Do you have a video on how you put XEQT in your TFSA and how you go about that? I love your videos. Sorry about your grandad.
Thank you so much! In our most recent video (Wealthsimple Platform Review - ruclips.net/video/QYXlciZMAD0/видео.html) at the 18:55 mark we walk through how you could purchase an ETF like XEQT inside of your TFSA 😊 Hopefully that's helpful - let us know if you have any other questions!
How do you keep track of how much you have contributed to your TFSA or RRSP so as not to exceed the limit? I use wealthsimple as well and I contribute different amounts into different etfs. Now the etfs have grown above the tfsa limit and I'm not sure how to figure out how much I contributed before they started growing.
you can also log in to your CRA account which tells you your contribution room up until the jan 1st then you can just add whatever you done so far in the current year
Since VXC is all Equities, what do you plan to do as you get older and closer to retirement? Is there a fund you'd move your RRSP to to have a bit more fixed income and less volatility? For example, on Canadian Couch Potato, they have a series of funds that sort of scale down from 100%, to 80/20, then 60/40, etc. But I can't seem to find anything similar with VXC?
Great question! We'll be posting a few different videos that cover this topic (aka making changes to your investment portfolio as you start to approach retirement) in the future 😊
That is the yearly amount of contribution room that’s added, yes! RRSP contribution room is cumulative, so you can catch up on all of the room you haven’t used in the past. I’ve never contributed to my RRSP before this year, so I have room to catch up on before I have to consider the yearly limits 😊
How do we defer taxes? I would contribute into RRSP from my net income which means my tax was already deducted. Would I get returns when I’ll file for return during tax season?
Good question! Yes, in general you reduce your taxable income, and owe less taxes, by contributing to your RRSP, which could result in a tax refund depending on your personal tax situation and how much you paid in taxes throughout the year 😊
I erred in opening my large RRSP. I forgot that one cannot touch the funds until one reaches the age of 71 and even then one may only convert it to a RIF. Imagine not being allowed to touch your funds until you are lucky to reach the age of 71?
Actually, you can withdraw money from your RRSP at any time! Age 71 is the maximum amount of time you can have your RRSP for before you have to convert it to an RRIF, but you can take money out of your RRSP at any time up until then. Keep in mind that if you do take money out of your RRSP, the amount you withdraw will be added to your taxable income for the year (unless you take it out to buy a house, as a part of the RRSP First Time Home Buyer’s Plan) 😊
@@stephandden I know about the withdrawal penalties. 10% instant tax rate for withdrawal of $5,000 or less, 20% for $10,000 to $5,000 and 30% for anything above $10,000. By withdrawing, you have wiped-out any and all interest your investment returned.
RRSP’s are tax deferred - when you put money into the account, you actually reduce your taxable income for the year (aka you pay less taxes); then, when you take money out of the account in the future, you pay taxes on that money for the first and only time. Ideally, you’ll take the money out of your account when your income is lower, so you end up paying less taxes overall 😊
Yes, when your account value is greater than 100k - you get USD accounts for free. 😊 Now, when it comes to currency conversion fee’s - there’s more to it. You’re technically still charged a 1.5% conversion fee when you buy US listed investments, however, when you sell - you’re no longer charged an additional 1.5% fee because of the USD account. Long story short - you still have to pay currency conversion fees even if you have a USD account.
As a 44 year old I regret opening an RRSP in my 20s. There were no TFSAs then but I wish I were able to have access to it and stopped contributing. There are many drawbacks they don't fully explain.
What drawbacks have you experienced? 😊 In general, RRSP’s are more beneficial than taxable accounts (although TFSA’s have more flexibility, ideally you’ll get to a place where you’re using both)
They also have many other videos explaining all the different investment accounts and what order they should be invested in... that just wasn't the topic of this video
As a 58 year old, RRSP is saving me thousand in deferred tax. You have to have a plan to take it out in a tax advantaged manner. Also watch the thresholds, $55,000 right now before it makes sense
Another drawback is if you start maxing out your RRSP early in life and end up with a nice$ defined pension plan benefit you could also end up with tax bill when you go to with draw your RRSP in retirement. If you end up with a large RRSP account and a large defined pension benifit one solution is to hold off collecting CPP and OAS until your are 70 years old and do an RRSP melt down.
Hi Steph. With Wealthsimple seems like we would need to pay taxes from the dividends we earned in TFSA when we withdraw ? do you know if that's the situation ?
If your ETF consist of US stocks, there's a 'withholding tax' on dividends, meaning the tax is already taken before you receive your dividend. There is nothing to do on your end, when you withdraw there is nothing to worry about!
With any Canadian investment platform, you'd have to pay taxes from US (or other foreign) dividends received inside of a TFSA; with USD listed investments specifically, it's a 15% foreign withholding tax on dividends. So yes, you have to pay those taxes with Wealthsimple, as you would with any other investment platform option. Keep in mind that the tax is automatically taken off before you receive the dividend, so you don't have to do anything, or pay any additional taxes - it happens 'without you knowing'. The only investment account that allows you to avoid this foreign withholding tax for US investments specifically is the RRSP - there's a tax treaty that reduces the tax for this account to 0%. We hope that makes sense! 😊
FHSA contribution room starts building once you open an account - since I only opened mine in 2024, I only have $8k of room 😊 If you opened one in 2023, then you would have a max limit of $16k this year!
My life is so good. My life is amazing. Watch how great my life is while I smile at the camera and zoom on my spray painted face. I have such an amazing financial situation let me show you how you can be like me.
I’m sorry to hear that was your take away from this video. Our channel is about personal finance - I share my own situation for transparency! I hope that you have a great week ahead 😊
@@TheBrawlmastahlol who hurt you that much buddy? Steph and Den are one of the most transparent, honest, and educational media creators I’ve ever seen. The fact that they’re open to share their investments performance and money situation is the main reason I follow them. It’s truly inspirational and motivating as someone who is the same age. Steph, keep it up girl! You guys are doing an awesome job. I do love your videos, thanks for all the information you share with us.
Investing in just the S&P 500, via an ETF like VFV, means you’re only investing in the US market (and more specifically, only investing in 500 large cap US stocks). Although the US market has seen strong returns over the past few decades, if we look further back historically, there have been time periods where the US has been outperformed by other global markets. Also, on top of that, past performance doesn’t guarantee future results. I still have an all-equity portfolio, and I’m currently working on increasing my exposure to the US market (hence why I’m investing in VXC within my RRSP). Overall, I’m not over-diversified 😊
Bonds are used to reduce risk in a portfolio - I’m investing for the long-term, and am several decades away from retirement, so I have time to recover from any short-term dips in the market that I may experience (basically, I don’t need to reduce my risk by diversifying by asset class right now - I’m diversified in other ways, while focusing on growth in my portfolio) 😊
I officially have a TFSA, FHSA and RRSP! What account are you using to invest right now? Let us know! 👀
all of mine are maxed out right now :)) so im investing in my non-registered for the rest of the year (but keep in mind i am only 27 with low income during the first few years of my working years which is why my RRSP contribution room is a lot lower than yours
Amazing, we love to hear that! Love that you’ve maxed out your registered accounts - your RRSP will keep growing over time, too 😊
@@sapashowdon't forget if your income is low you don't have to claim the RRSP deduction. You may want to wait and claim it is a year when your I come has increased for greater benefit.
@@DavidHughes-f6c my income is never gonna increase sadly hahahahah working in vancouver is tough
That's great to hear Steph! You both are very enterprising and that's super inspiring for all.
Thank you so much! 🥳
Congrats on starting the RRSP! Very educational video as always. Keep it up! :)
Thank you so much! 😊
Future video: How much RRSP and FHSA deductions to claim each year to optimize tax savings looking forward 5, 10, 15 years.
Great suggestion! 👏🏿👏🏻
Listened to a recent podcast that was talking about not investing too much into RRSP to avoid having "too much" to withdraw as income to avoid jumping to a different tax bracket. Considering I'm in the same boat as you both and just turned 30, this isn't a situation I plan on tackling in the near future, however would be interesting to explore! Maybe something to touch on in a future video?
Heavily contributing to your RRSP is perfect for reducing your current taxable income (especially if you are making good income).
That's an interesting topic for sure - we'll definitely explore it more in a future video! We're starting to learn more about what happens (or should happen) as you start to approach retirement, so this fits right in 😊
GREAT video, so sorry to hear about your grandpa.
Thank you so much ❤️
Like your content. Vary informative. Keep it up.
sorry to hear about your grandpa 🤍 and thank you for the educational video Steph
Thank you! 🙏🏻
Great video! I'm at a similar point in my investing journey and am trying to figure out what I should invest in in my RRSP. Can you speak a little bit more about home country bias? I have been investing in XEQT (like you guys) but am wondering whether i should start looking to XAW/VXC for my RRSP as well. But then I have also seen Ben Felix (as well as that article from Vanguard) say that 25-30% of a home bias for Canadians is fine and even ideal for reducing volatility. Would love to hear more about what you guys heard from your research!!
Your videos have helped me so much and given me so much confidence in my investing journey btw 😊.
great video ! keep up the great work!!!
Thank you so much 😊
Yay congrats!
Thank you! 😊
Hi steph! I would love to see a video for newbies like me. Answers to questions like what type of stocks to put in the rrsp vs tfsa. For example- dividend stocks , where should they go?, can we buy and sell within the rrsp? Thank you!
That's great Steph, good choice. Cheers!
I don't think an RRSP is right for me right now. As a student working part-time, my tax bracket is very low.
Right now my TFSA and FHSA are maxed out, and now my goal is to save as much money from working which I will deploy back into my TFSA and FHSA when the calendar strikes January 1.
In my FHSA, I don't know my time horizon, so to be safe I'm being conservative buying the CBIL ETF
In my TFSA I am investing in roughly equally QQC, VFV, XSMC, ZDJ. Funds inside ETFs are not weighed equally, so I like to buy multiple funds to have greater exposure to each category.
Thank you, and thanks for sharing your breakdown! Love that you have both your TFSA and FHSA maxed out right now.
Keep in mind that you can defer your RRSP deductions, and claim them in the future when your income is higher than it is now 😊 but, if you’re not interested in doing that, aiming to deploy your savings back into your TFSA and FHSA during the new calendar year is a great plan!
Thanks for the update on the TFSA, I was curious how your XEQT was going. I am currently working on maxing out my TFSA through a WS managed account. I have also been thinking of switching it to manage it on my own. 3 questions for ya, Does the rebalancing of the XEQT continuously happen on its own? Did you stick to the $10,000 per month of switching over to the new ETF? And do you think once you get closer to retirement that you would switch ETFs or invest in bonds?
Love to hear that you're currently working on maxing your TFSA out 😊
To answer your q's -
1) Yes, XEQT is an 'all-in-one' ETF, and it's rebalanced for you! You pay a slightly higher MER (0.20%) by purchasing an all-in-one ETF that rebalances for you, but it's still a fairly low fee overall (and makes it pretty simple); iShares says that it's 'continuously monitored and rebalanced as needed', which seems to be when the weightings drift more or less than 10% from where they're supposed to be
2) I did for the first 3-4 months of the year, and then ended up doing a bigger lump sum to finish up (mostly because I was so close to maxing out my TFSA in general that I just decided to finish making the purchases of XEQT!); we're actually going to post a video all about DCA vs lump sum in a few weeks with some of our updated thoughts on the topic
3) Good question! We've been doing a lot of research lately into how your investing strategy could / should change as you start to approach retirement. We'll definitely be sharing videos on this topic in the near future 😊
Great video I opened my RRSP before FHSA I think either way works also depends on the person
Thank you! + thanks for sharing - yes, it depends on your financial goals and situation 😊
What do you think about ETF’s that track the S&P 500? And investing in them with these types of accounts?
🙏🏻 Your grandpa.
Thank you ❤️
Are you going to use the form where you defer your RRSP or a portion of your RRSP to maximize tax reductions? Would be nice to get a walkthrough of that. :)
We'll definitely do a video on that, walking through the process! 😊
Thank you for this video and the specifics of which investment!
Do you have a video on how you put XEQT in your TFSA and how you go about that?
I love your videos.
Sorry about your grandad.
Thank you so much!
In our most recent video (Wealthsimple Platform Review - ruclips.net/video/QYXlciZMAD0/видео.html) at the 18:55 mark we walk through how you could purchase an ETF like XEQT inside of your TFSA 😊
Hopefully that's helpful - let us know if you have any other questions!
How do you keep track of how much you have contributed to your TFSA or RRSP so as not to exceed the limit? I use wealthsimple as well and I contribute different amounts into different etfs. Now the etfs have grown above the tfsa limit and I'm not sure how to figure out how much I contributed before they started growing.
I think on home page that shows summary and graph, there is somewhere shows deposits , cash available, market value. That will show you
@@jedidahcmelly4508Thanks a lot. I found it on the Wealthsimple desktop version.
you can also log in to your CRA account which tells you your contribution room up until the jan 1st then you can just add whatever you done so far in the current year
Since VXC is all Equities, what do you plan to do as you get older and closer to retirement? Is there a fund you'd move your RRSP to to have a bit more fixed income and less volatility? For example, on Canadian Couch Potato, they have a series of funds that sort of scale down from 100%, to 80/20, then 60/40, etc. But I can't seem to find anything similar with VXC?
Great question! We'll be posting a few different videos that cover this topic (aka making changes to your investment portfolio as you start to approach retirement) in the future 😊
@@stephandden Great! Really looking forward to seeing that topic covered hopefully in the near future.
The maximum contribution you can make to your RRSP is 18% of your previous year's income or the current fixed contribution limit ($31,560 for 2024).
That is the yearly amount of contribution room that’s added, yes!
RRSP contribution room is cumulative, so you can catch up on all of the room you haven’t used in the past. I’ve never contributed to my RRSP before this year, so I have room to catch up on before I have to consider the yearly limits 😊
@@stephandden good to know 👍
Hi Steph! Great video!!! Do you mind sharing with us where you opened your RRSP? Wealthsimple? 😊
Thank you! Yes, with Wealthsimple - it’s the only investment platform I use right now 😊
Why not XEQT and add VFV?
How do we defer taxes? I would contribute into RRSP from my net income which means my tax was already deducted. Would I get returns when I’ll file for return during tax season?
Good question! Yes, in general you reduce your taxable income, and owe less taxes, by contributing to your RRSP, which could result in a tax refund depending on your personal tax situation and how much you paid in taxes throughout the year 😊
I erred in opening my large RRSP. I forgot that one cannot touch the funds until one reaches the age of 71 and even then one may only convert it to a RIF. Imagine not being allowed to touch your funds until you are lucky to reach the age of 71?
Actually, you can withdraw money from your RRSP at any time! Age 71 is the maximum amount of time you can have your RRSP for before you have to convert it to an RRIF, but you can take money out of your RRSP at any time up until then.
Keep in mind that if you do take money out of your RRSP, the amount you withdraw will be added to your taxable income for the year (unless you take it out to buy a house, as a part of the RRSP First Time Home Buyer’s Plan) 😊
@@stephandden
I know about the withdrawal penalties. 10% instant tax rate for withdrawal of $5,000 or less, 20% for $10,000 to $5,000 and 30% for anything above $10,000. By withdrawing, you have wiped-out any and all interest your investment returned.
@@stephandden
I helped my father to cash-in his RIF. He was charged 10% for the privilege.
@@stephandden
As for the home plan, I own my home. Meh.
Steph what did you chose to do with your pension when you left your corporate job?
I didn’t have one 😊
Awesome move, I had a feeling that you'd go for something ex-canada 🤣
👀 good guess!!
That's going to be a huge tax-break next season! You'll probably be able to fill up those contributions room super early come tax season. Cheers!
🥳 that’s the goal!
I was wondering what kind of work do you do
We're full time personal finance content creators 😊
is that mean you will get taxed second time when you take it out
RRSP’s are tax deferred - when you put money into the account, you actually reduce your taxable income for the year (aka you pay less taxes); then, when you take money out of the account in the future, you pay taxes on that money for the first and only time.
Ideally, you’ll take the money out of your account when your income is lower, so you end up paying less taxes overall 😊
Wait. You are already over 100K with Wealthsimple accounts. Shouldn't you have USD accounts for free and avoid currency exchange?
Yes, when your account value is greater than 100k - you get USD accounts for free. 😊
Now, when it comes to currency conversion fee’s - there’s more to it. You’re technically still charged a 1.5% conversion fee when you buy US listed investments, however, when you sell - you’re no longer charged an additional 1.5% fee because of the USD account.
Long story short - you still have to pay currency conversion fees even if you have a USD account.
As a 44 year old I regret opening an RRSP in my 20s. There were no TFSAs then but I wish I were able to have access to it and stopped contributing. There are many drawbacks they don't fully explain.
What drawbacks have you experienced? 😊
In general, RRSP’s are more beneficial than taxable accounts (although TFSA’s have more flexibility, ideally you’ll get to a place where you’re using both)
They also have many other videos explaining all the different investment accounts and what order they should be invested in... that just wasn't the topic of this video
As a 58 year old, RRSP is saving me thousand in deferred tax. You have to have a plan to take it out in a tax advantaged manner. Also watch the thresholds, $55,000 right now before it makes sense
And yes, retire early!
Another drawback is if you start maxing out your RRSP early in life and end up with a nice$ defined pension plan benefit you could also end up with tax bill when you go to with draw your RRSP in retirement. If you end up with a large RRSP account and a large defined pension benifit one solution is to hold off collecting CPP and OAS until your are 70 years old and do an RRSP melt down.
Just make your own weighting with separate ETFs
You could do that if you wanted to, yes 😊
Hi Steph. With Wealthsimple seems like we would need to pay taxes from the dividends we earned in TFSA when we withdraw ? do you know if that's the situation ?
Do you hold something in TFSA with distributions from US or other foreign stocks? Tax should be withheld before it hits your account.
If your ETF consist of US stocks, there's a 'withholding tax' on dividends, meaning the tax is already taken before you receive your dividend. There is nothing to do on your end, when you withdraw there is nothing to worry about!
With any Canadian investment platform, you'd have to pay taxes from US (or other foreign) dividends received inside of a TFSA; with USD listed investments specifically, it's a 15% foreign withholding tax on dividends.
So yes, you have to pay those taxes with Wealthsimple, as you would with any other investment platform option. Keep in mind that the tax is automatically taken off before you receive the dividend, so you don't have to do anything, or pay any additional taxes - it happens 'without you knowing'.
The only investment account that allows you to avoid this foreign withholding tax for US investments specifically is the RRSP - there's a tax treaty that reduces the tax for this account to 0%.
We hope that makes sense! 😊
@@stephandden Hi steph . Thank you for taking the time and explaining it , got it now.
@@clarity7060 Thank you for explaining it !
Maybe you're posting late but the contribution limit for FHSA is 16k this year. 8k for 2023, 8k for 2024. I believe you can still add 8k.
FHSA contribution room starts building once you open an account - since I only opened mine in 2024, I only have $8k of room 😊
If you opened one in 2023, then you would have a max limit of $16k this year!
@@stephandden I did not know that. Thank you 😊
My life is so good. My life is amazing. Watch how great my life is while I smile at the camera and zoom on my spray painted face. I have such an amazing financial situation let me show you how you can be like me.
I’m sorry to hear that was your take away from this video. Our channel is about personal finance - I share my own situation for transparency!
I hope that you have a great week ahead 😊
@@stephandden Just like everyone who takes tiktok videos and facebook pictures is for 'transparency'
@@TheBrawlmastahlol who hurt you that much buddy? Steph and Den are one of the most transparent, honest, and educational media creators I’ve ever seen. The fact that they’re open to share their investments performance and money situation is the main reason I follow them. It’s truly inspirational and motivating as someone who is the same age.
Steph, keep it up girl! You guys are doing an awesome job. I do love your videos, thanks for all the information you share with us.
@@cocatellez96 there's nothing inspirational about putting your life and business on the internet
Thank you so much! 🙏🏿🙏🏻
You’re over diversified lol. If you’re not going to buy individual stocks, all you need is SnP 500. Or VFV.
Investing in just the S&P 500, via an ETF like VFV, means you’re only investing in the US market (and more specifically, only investing in 500 large cap US stocks).
Although the US market has seen strong returns over the past few decades, if we look further back historically, there have been time periods where the US has been outperformed by other global markets. Also, on top of that, past performance doesn’t guarantee future results.
I still have an all-equity portfolio, and I’m currently working on increasing my exposure to the US market (hence why I’m investing in VXC within my RRSP). Overall, I’m not over-diversified 😊
Why dont you like bonds?
Bonds are used to reduce risk in a portfolio - I’m investing for the long-term, and am several decades away from retirement, so I have time to recover from any short-term dips in the market that I may experience (basically, I don’t need to reduce my risk by diversifying by asset class right now - I’m diversified in other ways, while focusing on growth in my portfolio) 😊
great vid, a little heavy on the red lipstick though....
Thanks for watching!