Today I want to talk about something that confuses a lot of people: the registered retirement savings plan or RRSP. The RRSP is a quintessentially Canadian retirement-savings tool that was introduced by the Liberal government in 1957. Some of you may be asking why I am talking about RRSPs literally days before the end of the RRSP “season”. There are two reasons. The first is that it’s bad practice to pay attention to RRSP seasons because you’ll get better return for your dollar, save money and have less stress in your life if you’re contributing year-round because of dollar-cost averaging. Secondly, I want to make sure you take the time to understand the RRSP instead of quickly skimming this and then making hasty decisions. Continue reading What is an RRSP and how does it work?
After having this conversation no fewer than three times over the past few months, I figured it would be a good idea to clarify a widely-held misconception for landlords holding mortgages and really for anyone whose goal is to put themselves in a better financial situation. I have heard both landlords and others make the unqualified statement that you’ll lower your income taxes if you keep your rental property mortgage for a long time and don’t accelerate the payments on rental properties. While this is true, it’s not necessarily the best way to maximize your net worth and that’s the goal, isn’t it? Even though lowering income tax is a great idea, keeping a mortgage for a long time means we’re just paying money to the bank in the form of interest. To make it worse, the interest we’re paying is often higher than the income tax we would pay if we had no mortgage! Continue reading Net worth and income tax: a rule
Friends of mine know that I’m an ardent supporter of electoral reform in Canada— specifically I believe this country should transition from a First Past The Post electoral system to a system of proportional representation such as STV.
Almost a year ago while on vacation I started to ask myself whether the systemic qualities we demand in government are exclusive to democracy or if any other system of government could achieve the same qualities we hold as desirable. I realized that my support of proportional representation is rooted in the belief that a representative government is a legitimate government and that this is a foundational concept in any modern democracy. Continue reading Appointed democracy: eliminating self-selection bias in parliament (Updated)
Before I started working from home, we often found ourselves having scheduling conflicts around our single car. I started using my bike much more at the end of last summer and plan to continue as the snow lets up in the spring, but sometimes you have to go the extra distance and for most people that involves a second car.
I recently discovered that Google was now providing transit directions in Thunder Bay. This is arguably the best thing to happen to transit in a long time. No longer do I have to consider planning a bus trip. Now I can sit on the couch and pull out my phone and know instantly how long it will take me to get where I want to go. I realize this is old news for people in larger centres, but it’s basically a second car that costs a fraction of the price. Or a first car. Why not pull out your phone just before you get in your car and see how long the bus will take? It’s very likely that it may only be an extra few minutes over the car trip and will save you money and let you relax.
Here are the 2013 income tax rates and brackets for Canada and the provinces and territories, as well as contribution limits to RRSPs and TFSAs.
Continue reading 2013 Canada income tax rates, limits and amounts