Four Things You Need to Know about Inexpensive Term Insurance – April 2013

The most basic form of insurance and the simplest to understand is Renewable and Convertible Term Insurance. Coverage is provided for a specified term, the policy renews automatically at the end each term period until the policy expires, most commonly at age 85. This plan has the lowest initial cost at entry, but don’t be mesmerized by the low cost because on renewal you will pay a substantial increase. If, however, you become uninsurable before the end of the term period you will have no other option but to renew or convert it to a permanent plan if you want to keep the coverage.

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Residency Rules Snowbirds Need to Know – March 2013

by Michelle Munro for www.advisor.ca

Avoiding Canadian winters by heading to the warmer climate of the southern United States has long been a common goal for Canadian retirees. These snowbirds look to enjoy the warm weather while maintaining their Canadian ties. For many it’s a great way to spend a part of their retirement, as long as they are aware of the potential tax consequences.

Many of them are just like the parents of my friends, a healthy sun-seeking couple named Mary and James. They’re well-to-do and readily able to afford a few months in Florida’s warmth, and they think they have all the knowledge they need to avoid any tax or financial pitfalls that may be caused by their extended time in the U.S. At a gathering recently, James confidently told me he and Mary have no fears that their sojourn down south will cause them to be considered as U.S. residents for tax purposes. He and his wife hold to the conventional wisdom that says if you spend fewer than 183 days in the U.S., the Internal Revenue Service will leave you alone. Read more

Make the Most of Your Registered Retirement Savings Plan – January/February 2013

The 2012 Registered Retirement Savings Plan (RRSP) contribution deadline is Friday, March 1, 2013. Here are some facts about RRSPs to help you make the most of this great opportunity to grow your retirement savings, better plan your personal taxes, and enjoy a comfortable retirement.

Make your maximum contribution
Your RRSP contributions provide a deduction from your taxable income, which for most, results in a tax refund when you file your personal tax return.

For 2012, you can contribute a maximum of 18% of your earned income in 2011, to a maximum of $22,970.

This number will be adjusted if you are a member of pension plans and/or profit sharing plans, depending on the value of your benefits in the previous year. Read more

Got an RSP and Turning 71? – December 2012

Do you know someone with a Registered Savings Plan (RSP) and turning 71 – maybe your parents, brother or perhaps yourself? If you do, you should be aware of some decisions that have to be made to the Registered Savings Plan. The Income Tax Act says that you have to terminate your RSP’s by December 31st in the year you turn age 71. In doing so, you have three options:

1. You can withdraw all the funds in your RSP in one lump sum; however, this would be a fully taxable withdrawal for 2012. Unless you have a negligible amount in your registered plan, this is not a good option. This strategy defeats the whole plan in having an RSP in the first place.

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