Are we putting enough money aside and hoping that the money will be there when we need it?

Is there an art/science behind the investment world?

Hopefully the information below helps you understand what each of the areas discussed are and how they work. If you have an investment portfolio then you most likely fall under the following categories below.

If you don’t have an investment portfolio as of yet then what are you waiting for?

You will find having an investment in your own financial future makes perfect wealth sense

When advisors discuss investing with clients, they are primarily talking about using the different markets to invest surplus cash for long-term growth of wealth. There are three areas of investment that most individual investors will fall under when investing for the future. 

The trading of stocks, bonds, and mutual funds, impacts the financial wealth of the world economy.

Examples of how capital markets work can be traced back to early hierarchy of our civilization. The capital markets were developed as a way for buyers to buy liquidity. In Western Europe, where many of our ideas of modern finance began, those early buyers were usually monarchs or members of the nobility, raising capital to finance armies and navies to conquer or defend territories of their own. Many devices and markets were used to raise capital, but the two primary methods that have evolved into modern times are the bond and stock markets. 

So, what are stocks and bonds?


Bonds are considered debt. The bond issuer borrows by selling a bond, promising the buyer regular interest payments and then repayment of the principal (amount paid) at maturity (a set date in the future). If a company wants to borrow money, it could just go to one lender and borrow the money. But if the company wants to borrow a large sum, it may be difficult to find any one investor with enough capital and the inclination to make such a large loan, thus taking all the risk as the only lender. In this case the company may need to find a lot of small lenders who will each lend a little money, and this can be done through selling of bonds.

A bond is a formal contract to repay borrowed money with interest (often referred to as the coupon) at fixed intervals. Corporations and (e.g., federal, municipal, and foreign) governments borrow by issuing bonds. The interest rate on the bond may be a fixed interest rate or a floating interest rate that changes as underlying interest rates, rates on debt of comparable companies continually change. (Underlying interest rates include the prime rate that banks charge their most trustworthy borrowers and the target rates set by the Governments Financial Benchmark or The Federal Bank.)

There are many features of bonds other than principal and interest, but this is the easiest explanation that at least shows how they work. Because of the diversity and flexibility of bond features, the bond markets are not as transparent as the stock markets; that is, the relationship between the bond and its price is harder to determine


Stocks are shares of ownership. When you buy a share of stock, you buy a share of the corporation. The size of your share of the corporation is proportional to the size of your stock holding. Since corporations exist to create profit for the owners, when you buy a share of the corporation, you buy a share of its future profits. You are sharing in the fortunes of the company.

Unlike bonds, however, shares do not promise you any returns at all. If the company does create a profit, some of that profit may be paid out to owners as a dividend, usually in cash but sometimes in additional shares of stock. The company may pay no dividend at all, however, in which case the value of your shares should rise as the company’s profits rise. But even if the company is profitable, the value of its shares may not rise, for a variety of reasons having to do more with the markets or the larger economy than with the company itself. Likewise, when you invest in stocks, you share the company’s losses, which may decrease the value of your shares.

Corporations issue shares to raise capital. When shares are issued and traded on a public market such as a stock exchange, the corporation is “publicly traded.” 

Only members of an exchange may trade on the exchange, so to buy or sell stocks you must go through a broker who is a member of the exchange. Money Managers – who work for big conglomerates brokers will manage your account and will offer varying levels of advice and access to research for a commissionable fee. Most members of the exchange have Web-based trading systems which can be easily accessed by the public so that you can buy and sell at a fraction of the cost of working with a Money Manager these discount brokers offer minimal to no advice or research which creates the platform for minimal trading fees. 

What are Mutual Funds?

Mutual Funds, and Index Funds

A mutual fund is an investment portfolio consisting of securities that an individual investor can invest in all at once without having to buy each investment individually. The fund thus allows you to own the performance of many investments while actually buying and paying for the transaction cost of buying only one investment. Mutual funds have become popular because they can provide diverse investments with a minimum of transaction costs. In theory, they also provide good returns through the performance of professional portfolio managers.

An index fund is a mutual fund designed to mimic the performance of an index, a particular collection of stocks or bonds whose performance is tracked as an indicator of the performance of an entire class or type of security. 

Mutual funds are created and managed by mutual fund companies, by brokerages or even banks. To trade shares of a mutual fund you must have an account with the company, brokerage, or bank. Mutual funds are a large component of individual retirement accounts and of defined contribution plans.

When corporations or governments need financing, they invent ways to entice investors and promise them a return. The last thirty years has seen an explosion in financial engineering, the innovation of new financial instruments through mathematical pricing models. This explosion has coincided with the ever-expanding powers of the computer, allowing professional investors to run the millions of calculations involved in sophisticated pricing models. 

The Internet also gives amateur investors instantaneous access to information and accounts.

So, in conclusion the ways that capital can be bought and sold is limited only by the imagination below you will find a brief recap of how each investment works in its simplest form. We hope this has made investing easier to understand. Again, this is the very basic understanding of investing as there are more complex explanations to each of the following.

  • Bonds are
    • a way to raise capital through borrowing, used by corporations and governments;
    • an investment for the bondholder that creates return through regular, fixed or floating interest payments on the debt and the repayment of principal at maturity;
  • Stocks are
    • a way to raise capital through selling ownership or equity;
    • an investment for shareholders that creates return through the distribution of corporate profits as dividends or through gains (losses) in corporate value;
    • traded on stock exchanges through member brokers.
  • Mutual funds are portfolios of investments designed to achieve maximum diversification with minimal cost.
    • An index fund is a mutual fund designed to replicate the performance of an asset class or selection of investments listed on an index.
    • An exchange-traded fund is a mutual fund whose shares are traded on an exchange.



Life insurance can be a core strategy for retirement savings

Did you know if you are legally blind in the USofA you can carry a concealed weapon?  Apparently in 2001, a legally blind man obtained a permit in North Dakota to carry a concealed weapon. He has managed to satisfy the state’s shooting test by hitting a human-sized target 10 times out of 10 from a distance of 21 feet, or 6.4 metres. Even though this man is legally blind, he hits the target every time – once someone points him in the right direction.

Retirement planning can be like this if you don’t have a plan. Many people can’t see how much income or savings they’ll need to make ends meet in retirement, but if someone points them in the right direction, they might just have enough wealth sense to hit the target.

The talk about life insurance as one of those core strategies in retirement is something that has been met with a lot of resistance in the past. I truly believe this is more of not understanding the process than not believing this additional asset can be of value in the future. 


A little while ago, a client of mine, was concerned about how he was going to generate enough income in retirement. He is 46 years old, and is behind in his target goal in saving for retirement. He’s a business owner and had been putting most of his savings into his business to expand it (which is a common business scenario). He has a small retirement portfolio but because of the way he has invested in his business over the last few years he has not been able to reap the benefits of this current market run for his retirement. He is now in a position where he feels comfortable with where the business is and wants to focus on his future retirement needs. He has decided it is time to put a plan in motion that will help him meet his retirement goals.

…So, as we started to create a succession/retirement plan we discovered there was a need for insurance. While we talked about adding insurance to his portfolio, we also discussed the advantage of the investment vehicle within the insurance policy that would help him create some of the cash flow he and his wife will need in the future – a figure which they believe to be about $100,000 annually after taxes. By implementing an insurance policy as one of the core funding strategy some of the needed funds each year could be provided for them as part of their retirement plan on a tax-free basis. Because he is behind in his retirement planning portfolio, we wanted to create an accelerated plan for retirement that is a reasonably safe platform and not subject to market volatility.  As an added bonus this plan also covers off an insurance shortfall which was discovered in our initial review, should he pre decease his wife.


How does this actually work? 

We talked about the life insurance product and it’s features and set out some projections. Since it was determined there was an insurance need and at the age of 46, he purchased a whole life insurance policy with an initial face amount of $2,000,000. The premiums will be paid on a monthly basis and he wanted the policy to be fully paid up in 10 years. 

Each dollar of premium that he pays is used in two ways: Covering the Cost of insurance itself and making a deposit into a dividend fund inside the policy. That accumulating fund is known as the “cash value” of policy.

Starting at 65, he is going to receive $50,000 annually from this policy. 


He’s going to borrow $4167 from his policy each month tax-free ($50,000 annually) to use in retirement, by using the policy as collateral (which many banks are glad to do; they’ll typically lend up to 90 per cent of the cash value). This is not considered taxable income because loan proceeds are considered tax-free. There will be an annual interest charge on the borrowing of the money, which he plans to capitalize and will be paid out in full upon death (meaning – he won’t pay the interest annually, but the interest will be added to the loan balance from his policy over the years).

If he passes away at age 90 LE (life expectancy), the total insurance benefit to be paid out is projected to be $3,801,847. This money will be used to pay off the capitalized loan to the bank via his policy which is projected to be $2,032,295 at age 90. There will still be about $575,998 left over in his estate for his heirs and he and his wife would have received $1,250,000 tax-free during his retirement.

He plans to meet the balance of his cash needs in retirement using other strategies that were presented. You don’t have to structure your insurance plan exactly like he has. You could borrow less, or not borrow at all. You could reduce your premiums by stretching them out over a period longer than 10 years, or borrow money to pay your premiums (which is another strategy for another discussion). You can choose to cover whatever portion of your cash needs in retirement that suits you. 

The end result of this is the client now has a plan in place that will help him achieve his retirement goal.

As always speak to an adviser about your various options and create a plan that works to suit your needs.



“How much money do I need for retirement?”

A simple question asked by many clients of their advisors. The response should be… “What life style do you want to lead in retirement?” 

The answer from said client… should be…

“I want to live in the lifestyle that I have become accustomed in my present state.”

One could say that is completely dependent on what your wants and needs are. If your wants out weigh your needs then you will need a lot of money to retire on. If your needs are more important than wants you will need less retirement income. How much money you need to save for retirement is in part a function of how much money you will spend – and for how long.

So, what are the parameters for determining your retirement budget and the lifestyle you plan to lead.

Well according to Statistics Canada, the average Canadian household spent $68,980 in 2019 on consumer goods, an increase of 9.5% from 2016. Since nobody really lives in an “average” Canadian household and retirees have unique spending differences from the general population. Then let’s look at those numbers, the average household spending for the retirement population would then change to between $45,725 and $87,459, although spending net of income tax, insurance and pension contributions was only $36,339 and $65,086. These latter figures may be a better gauge of average spending on goods and services for the retired population.

Do we believe these numbers? 

Not Really!

Since Statistics Canada relies on the population to report their numbers so they can be compiled and published, I would suggest on that the average spending on goods and services for the retired population is likely on the low side. It’s no doubt though that many of Canada’s retired population will be well above these averages. As many have now entered retirement with a mortgages and other big-ticket expenses that were not of past retirees.

Trends during retirement

We will get to life expectancy shortly but let’s say you retire at age 65 and life expectancy is 90… then you have 9125 days to play with. 

What will you do with them?

Let’s see… I want to see the world, I want to golf more, I will volunteer, I will spend time with friends, look after grandchildren, go fishing, hiking, gardening, play cards with friends, join fitness groups, etc. These are things we hear all the time. They are things that generally happen.

So, let’s do the math… 

If you go away for one month a year travelling for five years that equals 180 days. If you look after the grandkids one day a week five years that equals 260 days and so on. With all the other activities our wish list we could keep yourselves very busy for 1825 days or five years. Yes, you will be very busy for the first five years guaranteed. You will also spend more money during that time because every day is like a weekend. Since you don’t have to work during the week you can spend money every day other than your days off. All of a sudden, this retirement business is expensive. You have to understand that you are living on a fixed income moving forward as the money you have saved is all you will have.

But not to worry at some point during retirement you start to slow down and move a lot slower. You realize that you are busier now in retirement than you were when you were part of the work force. So, you give up the volunteer work, the grand kids tend not to need us as much as they age, and travel becomes a permanent residence in a warmer climate for half the year. The next 1825 days we see the need to rest and this is when the savings begin. We have done it all… 

We made it! Age 75 – 3650 days (10 years) into retirement we figured out that it’s time to rest – now what.

Time will tell and that will be based on health.

Things to consider…

Real estate

Real estate is a huge consideration when it comes to retirement spending planning. There are a couple of reasons.

If you own an older home, obviously part of your budgeting needs to include ongoing repairs and possibly renovations. Whether you like it or not, large capital costs will factor into your retirement spending particularly when you own an older home.

If you own a vacation property like a cottage or a place down south, hopefully retirement means you can spend more time enjoying these properties – if you so choose. But if you spend less time, either because the cottage is tougher to get to or maintain or you’re travelling instead of wintering in Florida, a point comes where the financial cost of maintaining a valuable, though mostly empty piece of real estate needs to be weighed against the usage. Renting a cottage or vacation home may be better financially, although capital gains tax implications and family attachment to a secondary home need to be considered before selling.

Obviously, a home downsize or a sale of a second property can also inject capital into your retirement assets and potentially allow you to scale up retirement spending.

And if you rent instead of owning your home during retirement, that makes a big difference in terms of your long-term retirement spending. Owning a home can create a safety net for funding expensive long-term care costs in your 80s and 90s that doesn’t exist if you’re a renter.

Life expectancy

We often hear about the average Canadian life expectancy, currently 79 for men and 83 for women in Canada as of 2017 according to Statistics Canada. But these ages are simply representative of the average age at death across the Canadian population. This means Canadians who die at a younger age skew life expectancy downwards as compared to the age to which a retiree is expected to live. Also, that is an old number we do know that people are living longer now than they have in the past.

For perspective in 2021, a retired husband and wife, both aged 65, have a 50% chance that at least one of the two will live to age 94 and a 25% chance that at least one will live to age 97. The life expectancy of a 65-year-old man is 89 and of a 65-year-old woman is 91.

It’s not only how much you’re going to spend in retirement that matters for retirement planning purposes, but also, for how long. An earlier retirement or a longer life expectancy will both increase how much money you need to retire and be financially independent.


Nobody is average, but everyone is looking for some perspective. Take the above with a grain of salt.

Statistics Canada data suggests that spending on goods and services was $65,086 for couples without children and $36,339 for one-person households in 2016, but this includes Canadians across all age groups. Studies suggests average retirees in 2016 spent $31,332 per year on good and services, though this excludes any housing costs beyond utilities and property taxes. It’s also a consolidation of married and single retirees, suggesting the figures should be higher for couples and lower for singles, while adjusted by both to reflect additional home ownership costs or rent.

Studies found a 16% reduction in spending as workers moved into retirement, but other global studies have been found to show more modest declines in spending.

Spending may increase in the early years of retirement, but those who live a long life may not only have more years of retirement to fund, but are also exposed to the risk of incurring long-term care costs as they age.

Retirement planning is more art than science, but at least with some reasonable sense of what to expect with your retirement spending, you can develop a long-term retirement plan. I feel it’s prudent to budget to replace 85% of your pre-retirement basic living expenses, but some people will spend more or less depending on their personalized retirement and financial goals.



As I wonder what to write about this week, I am reminded by my sweet 17-year-old that I am too old to know anything. This comes about as she is learning to drive my car, now I guess after 40 years of driving my 17-year-old who yearns to be free is in that stage of Dads don’t know anything. This may be correct in today’s world of teenagers but I know one thing I own the car and control the keys.

The interesting fact about raising two girls is eventually I do know something and become the smartest person in the room as long as no one else is around. My 20-year-old went through a similar stage and now that she has bills to pay, she understands that the money tree in the house is not always fruitful. There was a steep learning curve but we managed to get through this together. I had to sit her down and draw diagrams as this generation works well with pictures since they are on their phone all the time. 

Let me set this up so you understand how I got to be the smartest in the room again.  

I gave my daughter her very own credit card. Yes, I did – Bad Idea not really in a society where cash is a thing of the past and everything you do requires a good credit rating. Teaching your child about good credit management before, they go to University and move out into the real world is a key lesson in Financial Wealth Sense.

The beginning of the lesson was harsh and a steep learning curve for all involved, as I paid the credit card bill monthly. The credit card was meant to be for gas and emergencies. She understood the gas part well but the emergencies quickly became Starbucks, Booster Juice, Boston Pizza and all other things that she had to have. In the beginning I did not mind her using the card at will as I knew what she was spending it on as the app on my phone notified me each time a transaction was made. Like I said I paid the bill monthly so she would continue down the path of having good credit and to be totally honest she did not have a job because of school and sports commitments. In the beginning it was fine but then the very fine line became easier to cross, she was starting to spend money at will. The learning curve was a $1,500 visa bill from various spends during a one-month shopping spree. Again, I knew it was happening and I let her do it to teach the lesson. Wait for it!

Once the month was over and the final bill was in, I filled up the car with gas gave her a gas card for $150 and put $250 in her bank account for extras. Because it was meant as a lesson not a punishment, I said this needs to last you six weeks, you now must choose how you want to spend your money and to clarify I did take the credit card away for the same six weeks.  Of course, she did not understand why and in fairness I never explained how this would play out. I already knew exactly what would happen given the parameters I set out for her when I gave her the credit card. She had no idea that she had spent that much in a month as her exact words where, “It was easy all I had to do was tap tap!” I also explained that it was nice that you wanted to pay for all your friends’ coffees, and dinners but that would have to wait until you had your own money to be that generous.

This is where the diagrams come in to play because remember this was about teaching a lesson not a punishment. With pictures and a lap top, I showed her how credit ratings work and why she needs a good credit rating in the future so she can buy a car, a house, or even apply for credit. I then explained that she had no money coming in (other than birthday, holiday money from generous relatives, and odd jobs) but she was spending as if she was gainfully employed.  

I then asked the $1,500 question. 

How will you pay this bill?  

Of course, there was a blank stare followed by the words, “I don’t know.”  This is where many individuals end up making monthly payments on consumer spending for money that they did not have in the first place and it’s too easy to get caught up in the cycle. 

I drew this diagram below to help explain the process of money and her future lifestyle: Three Kinds of Money

Lifestyle: In its simplistic form are the things that we can afford to do and have while we enjoy the merits of living for today and days to come.

Accumulation: Is the process of collecting assets, through purchase or by obtaining them, an activity of collecting for a particular purpose in the future.

Transferred: This is money that is being directed away from your Lifestyle and Accumulation of funds that will not help you lead life the way you want in the future. This is where Credit Cards, and Debt usually reside!

So now that you understand the three kinds of money above:

Which would you least want to change moving forward?

If you said Lifestyle, you would be correct. No one wants to change the way they live on a daily basis. So, we cannot take away from your LifeStyle.

Which would you want change the most?

If you said Accumulation, you would be correct. We want this to be the biggest piece of the circle moving forward because our accumulation will help us keep the Lifestyle to which we have become accustomed to in the future.

So, by default that leaves us with Transferred, we want this to be the smallest piece of the circle in our future because this is money that we are losing unknowingly or unwillingly through Credit Cards, Debt, Interest and Monthly Payments.

“Does all this make sense?” I asked.

She said Yes! She now understands the process of money and it’s transactions, and for the next six weeks she managed her funds, she was proud of the fact that she made the money last although the car was running on fumes she did have money left in her spending account. 

She still has the credit card today but only uses it when it’s absolutely needed, she has managed to find a great summer job while in university and has made a fair amount of money. She has started an investment portfolio (Accumulation), she has also created a budget plan for herself and has managed to stay within her limits (Lifestyle). I have only had to provided some support for bigger ticket expenses that happen from time to time but I always attach a limit to those purchases to keep her in check (these would be the Transferred expenses). If I did not help there would be monthly payments and interest since they were not in the budget. To be fair she does try to contribute some money to these purchases. When she graduates and finds that dream job I will teach her the value of an Emergency Fund to compensate for things that happen outside of her budget.

My point here is simple we have to teach our children how to be financially stable, we must teach them how to live for today and be set for the future because if we don’t, they will find themselves in a cycle of never-ending debt with bad credit. It’s easy to do when you don’t understand the value of your needs versus wants or financial well-being.

I guess the moral of this story is that I may not always be the smartest one in the room at all times but the one time I need to be I will be.



As we make our way through the cycle of life, we always find a way to put off the uncomfortable things for another day. We have been taught to be prepared whether it was for the unexpected or expected we should always be prepared. If only life were that simple!

Since Covid-19 planning has never been more top of mind for Canadians, but research shows that 57% of Canadians don’t have a will. My clients will attest to this as it is one of the first questions I ask in my interview process. Sadly, I concur only half of my client base had Wills in place before we met.

Estate planning typically isn’t at the top of our to-do lists because it can be complex, expensive, and – let’s face it – who is worried about dying while living. 

If you don’t want to see a lawyer about creating a will, Online wills are a thing, as are Handwritten wills.

Example of a hand written will…

“In case I die in I leave all my worldly possessions to the guy next door.” signed: The Neighbour

Seems simple enough – not to mention lucky guy next door!

“In case I die in I leave all my worldly possessions to the guy next door.” signed: Seems simple enough – not to mention lucky guy next door!

If you were to pass tomorrow and you left this handwritten statement to be found. Then the statement above would be upheld as a valid will, since holograph wills (handwritten wills) are legal in all provinces except BC and PEI. As long as a will is written entirely in your handwriting and signed by you, it’s legally valid. Please understand if you are writing your own will that it likely won’t be as comprehensive as a will created online or with a lawyer.  But in the end a will isn’t just about who gets your assets, it’s also about appointing an executor of your estate and guardians for any minor children. 

Let’s say you have an estate worth 1 million dollars, and you don’t have a spouse or any heirs. Typically, in this situation you may pass things to a friends, acquaintances, universities, alumni associations or charities to name a few. People without heirs will get creative in how they pass on their assets. It’s much more common to leave a gift to charity, friends, or organizations if you don’t have children. In fact, leaving a gift to charity in your will is one of the ways you can have a positive impact when you’re gone not to mention the tax break received by the estate – you can either leave a bequest (a specific item/amount of money), or a portion of your estate to an organization you care about.

The validity of the will can be challenged, and a judge will always look for testamentary intention.

What did the testator (the will-maker) actually intend? It’s important to be clear with your wishes, and it’s equally as important to say what you DON’T want as to what you do – for example if you want to ensure someone is disinherited or cut out of your will, stating that in the will and providing any additional details can ensure your wishes hold up after you’re gone.

Planning your estate and communicating your wishes as appropriate can protect your estate and, as importantly, allow your heirs the opportunity to prepare themselves for their changed circumstances. The “do nothing” option is not in the best interests of your family, your business or other relationships. As the world we live in becomes increasingly characterized by legal action and government intervention, estate planning is something everyone should do. 

So, the moral of the story is unless you want to work for the government in death create a Last Will of Testament that clearly state your intentions upon death. Whether you are leaving your processions to your heirs or creating a legacy the value of a will is not as complex as you believe it to be and also makes for great wealth-sense.



In 2009, the Tax-Free Savings Account (TFSA) was introduced to Canadians. Since that time, TFSA’s have grown in popularity and as a result, there are lots of debates over which is better the RRSP or the TFSA. 

What does each investment do for you Immediately?

RRSPs give you an immediate tax deduction…

The most attractive feature of the RRSP is the immediate tax savings you get when you put money into the RRSP.  The value of this tax break is determined by the marginal tax rate that you are in.  This short-term tax gain is offset by future taxes when you take the money out of your RRSP.  When you take money out, you will pay tax based on your marginal tax rate at the time you take the money out (which should be a lower tax rate than at the time you originally put the money in).  Any growth inside the RRSP, grows tax deferred but eventually there will be taxes paid when withdrawn from the RRSP.

Tax Free Savings Accounts give you Tax Free growth…

Unlike the RRSP, there is no immediate tax deduction when you put money into the TFSA but there is no tax paid when you take the money out either. The appeal of the TFSA is actually the TAX-FREE growth on your investments within your TFSA portfolio. You don’t pay tax on any of the growth inside a TFSA.  That is its best feature.

Below we have the reasons…

What do you need this money for?

If you need to spend the money in the near future for a car, a kitchen renovation, or maybe for a vacation, the TFSA is a better option because using the money does not trigger tax.  However, putting money into a TFSA and then taking out on a regular basis kind of defeats the real benefit of the TFSA which is its long-term TAX-FREE growth. If the Tax-Free growth is the goal, then you might be better off using a high interest savings account instead of a TFSA as the savings vehicle.

Emergency Funds…

Most people will agree that a TFSA, conceptually, can be a great place for emergency money.  However, an emergency fund should not only be readily accessible but also a safe investment.  Putting safe investments in place with lower returns to remove market volatility concerns will also negate the true benefit of the Tax-Free growth.  If you want your TFSA to be a safe haven for your investment then you will probably get better results from a High Interest Savings account for your emergency money with zero risk involved.

Saving for your first home or for education…

While the TFSA and the NON-RSP (non-registered savings plan) seem like logical ways to save for a home or for education because they are not taxed, your RRSP does offer two opportunities to withdraw money through the First-Time Home Buyers Plan and the Lifelong Learning Plan. This requires you to pay back the loan overtime giving you a chance to pay yourself back in the long run. The only thing lost is the gain on the money while it is not in your portfolio.

There is no right or wrong answer…

One of the problems with the outcome of the TFSA or RRSP debate is it seems like people have to make the choice between one or the other which really is not the case. Both the TFSA and the RRSP have merits and a place in your financial plan.  

Why can’t you have both?

Both the TFSA and the RRSP have strong financial benefits that are good for you. One way to invest in both the RRSP and the TFSA is to invest in the RRSP first and then use the tax refund to invest into the TFSA.  

An example:

You could invested $5,000 into an RRSP, or you could invest the entire $5,000 into the TFSA.

But should you?

What should you do?

Well if you invest $5,000 to the RRSP this will generate a tax savings based on your marginal tax rate. 

Let’s say the marginal tax rate is 30% (this marginal tax rate has been chosen for ease of calculation), that is equal to a tax savings of $1,500. Now take the $1,500 of tax savings and invest that return into a TFSA.

So now you have $6,500 invested into your portfolio from your original $5,000 that you invested in your RRSP. Most people in reality just spend the tax savings on a trip or something they want which is normal when you find free money. But why not take advantage of that free money to increase your future investment portfolio.

So, which is better? 

TFSA investments which grow TAX FREE, or RRSP investments which grow TAX DEFERRED. They both have their own merits in your portfolio and it depends on what you need out of each. Tax savings today which is important to most at tax time, or if tax savings is not a concern then would you would want tax-free growth for the future. Now you can see why there is a debate.

Why does one have to be better than the other?

Why can’t you have both? Well you can but you have understand what each represents in your investment portfolio.

The decision is yours to make choosing one or the other or even both make great wealth sense where your investment portfolio is concerned. Is the debate over? No! But now you have an understanding of the merits of each investment and how they work…

As always seek professional advice when creating a plan for the future. The value found in the advice given could provide a bigger pot of gold at the end of the rainbow.

It’s almost that time again! Taxes will be due soon enough…

It’s almost that time again! Taxes will be due soon enough…

A new year means new limits. Here’s a list of new financial planning data for 2021 (In case you want to compare this to past years, that data is included). Pensions, RRSP, TFSA, CPP, OSA, New Federal Tax Brackets.

Pension and RRSP contribution limits

  • The new limit for RRSPs for 2021 is 18% of the previous year’s earned income or $27,830 whichever is lower less the Pension Adjustment (PA).
  • The limit for Deferred Profit Sharing Plans is $14,605
  • The limit for Defined Contribution Pensions is $29,210

Remember that contributions made in January and February of 2021 can be used as a tax deduction for the 2020 tax year.

Tax YearIncome fromRRSP Maximum Limit

TFSA limits

  • The annual TFSA limit for 2021 is the same at $6,000.
  • The cumulative limit since 2009 is $75,500 (assuming you were over the age of 18 in 2009)

TFSA Limits for past years

YearAnnual LimitCumulative Limit

Contribution amounts for 2021

  • Employee contribution = 5.45% (up from 5.25% in 2020)
  • Employer contribution = 5.45% (up from 5.25% in 2020)
  • Self employment = 10.9% (up from 10.5% in 2020)
  • The maximum employer and employee contribution to the plan for 2021 will be $3,166.45 each and the maximum self-employed contribution will be $6,332.90. The maximums in 2020 were $2,898.00 and $5,796.00.
  • CPP Benefits
    • Yearly Maximum Pensionable Earning (YMPE) – $61,600
    • Maximum CPP Retirement Benefit – $1203.75 per month
    • Maximum CPP Disability benefit – $1413.66 per month
    • Maximum CPP Survivors Benefit
      • Under age 65 – $650.72
      • Over age 65 – $722.25

Reduction of CPP for early benefit – 0.6% for every month prior to age 65. At age 60, the reduction is 36%.


Old Age Security (OAS)

  • Maximum OAS – $615.37 per month
  • The OAS Clawback (recovery) starts at $79,845 of income. At $129,075 of income OAS will be fully clawed back.

OAS rates for past years:

YearMaximum Monthly BenefitMaximum Annual Benefit

New federal tax brackets

For 2021, the tax rates have changed.

Lower Income limitUpper Income limitMarginal Rate Rate



As we continue to move through Covid-19 as a society we are often reminded of the times when we could do things we wanted without circumstance. Since the middle of March or 266 days ago, we can now describe ourselves as living in a suppressed environment. As difficult as that has been for many, we must understand that even if our reality has changed during this time our outlook on life should not be broken. We will survive this and this too shall pass as we are a resilient society.

Knowing that with every passing day we are one step closer to understanding that we will not be able to celebrate Christmas with family and friends as we can already see the writing on the wall. The toughest part of this conversation is that someone else other than ourselves is making that decision for us. We must believe that these chosen officials are not trying intentionally to separate us from family on this special holiday as some would believe, but they are truly trying to keep us from having to endure any pain and suffering that would come from us failing to understand the severity of the circumstance if we fail to listen.

We already know there will be complaining. The only thing anybody should be complaining about is their health in this circumstance. Short of the death of a loved one, a terminal illness, or some other horrible tragedy, everything is controllable. If we’re in control of it, we have the ability to fix it. 

Where is the value in complaining? 

Instead of complaining about what could happen or when it does happen…Why not asses the situation, and find a solution. 

What if you could…

– Organize a catered dinner for loved ones who you cannot see this Holiday Season. 

– Create a Zoom, Google Chat, Face time, or just a simple phone call to create that festive moment with a cheer for the holiday season knowing that you will soon be able to get together as a family in a safer environment sometime in the future. Life is way too short to risk any lives because you fail understand why.

With this also comes with a lack of optimism about our future. There are a million reasons why not, but there is one good reason why, our future is bright we just have to persevere and understand there is a light at the end of the tunnel.

No matter what happens, we have to keep going we have a choice. We have come this far and yes; we are tired of not being able to do what we have done in the past. But isn’t this where the optimism lives knowing we will one day rise above this to return to what we know. If we truly believe as a society that we can do it no matter what, we’ve got this. The only reason we might bring up any excuses about the future is because you don’t believe there will be one. Do not let that kind of thinking ever get in the way of our success because we already know this, we are resilient and we will persevere. Many things have stood in the way of our success lately and we have found a way to move forward to this point in time. So, don’t give up now as this too shall soon pass!

To be able to get through this holiday season, We, need to have optimism. Every day is hard, and we all have to fight to win.

To that I say Happy Holidays and a Merry Christmas to all! So long 2020 and bring on 2021 I’m ready!

Lest we forget! Thank you to all that served and continue to serve our great country.

Lest we forget!  Thank you to all that served and continue to serve our great country.

Thank you for all that served our country, giving us the freedom we enjoy today. Thank you to all that continue to serve our country and put themselves in harm’s way to protect us from what the world has become.

I leave you with this poem below… a tribute to the fallen soldier.
The GreatWar 1914-1918
In Flanders Fields
Flanders Poppy on the First World War battlefields.
by John McCrae, May 1915

In Flanders fields the poppies blow
Between the crosses, row on row,
That mark our place; and in the sky
The larks, still bravely singing, fly
Scarce heard amid the guns below.

We are the Dead. Short days ago
We lived, felt dawn, saw sunset glow,
Loved and were loved, and now we lie
In Flanders fields.

Take up our quarrel with the foe:
To you from failing hands we throw
The torch; be yours to hold it high.
If ye break faith with us who die
We shall not sleep, though poppies grow
In Flanders fields. Lest we forget.