Wondering About RRSP’s? The deadline is approaching…

General Trish Pigott 8 Feb

Below is some information that was provided by Enriched Academy pertaining to RSP’s and whether one should consider investing in them…

The RRSP Deadline is March 1, 2021.

A comprehensive breakdown of the RRSP (Registered Retirement Savings Plan) and how to take full advantage of its features.
📈 What is an RRSP?

An RRSP is a registered retirement savings plan. It is critical to understand that your RRSP is not an investment.

It’s an account that holds your investments.

The difference between an RRSP that loses money and makes money, are the investments held inside the account.

Remember this: Your RRSP is only as good as the investments inside of it.

Pros:
✅ Tax free growth. Each year you do not have to pay divident, capital gains or interest on the growth of your investments.
✅ Tax deductible. That means you can claim the money you put in your RRSP as a tax deduction when you file your income tax return, which lowers the overall tax you pay.
✅ Freedom to choose your own investments (more on this a bit later)
✅ Unused contribution room can be carried over. If you don’t contribute
✅ Spousal RRSP can increase your tax savings even MORE!

Cons:
❌ Taxable income upon withdrawal. When you invest in an RRSP and decide to take that money out, you will have to pay income tax.
❌ Further the first point, you will eventually have to pay tax on both the money you put in and the growth. There are ways to minize this through RRIF’s (Registered Retirement Investment Fund’s, learn more here)
❌ Forced withdrawal at age 71.
Three Common Myths About RRSPs

  1. You are limited to the investments you hold inside your RRSP. There are several different accounts that you can hold in your RRSP.
  2. You have to INVEST in something to take advantage of the RRSP tax refund. If you want to put money into your RRSP and are unsure of what to invest in, BUT still want to take advantage of the tax refund (will explain this later). You can simply transfer your money into your RRSP and leave it in cash until you’re ready to invest.
  3. RRSPs are a scam and not worth because you have to pay taxes in the end. Yes, you do  eventually have to pay tax, BUT don’t underestimate the power of interest-free growth and the tax deductions. Also, having a smart strategy on how you take that money out in a tax efficient way is key.

What you may not have known about RRSPs:

1) You are PAYING fees! 100%.
The fees are dependent on the investments you own. Here is the MER (Management Expense Ratio), which is the annual fee you pay of on our our students.
2) There are two ways to take money OUT of your RRSP:

  1. You can borrow money up to $35,000 from your RRSP to buy your first house under the Home Buyers’ Plan (HBP). You won’t pay taxes on the withdrawals but you have to pay it back within a certain amount of time.
  2. If you or your spouse is considering going back to school, you can take out up to $20,000 to pay education costs under the Lifelong Learning Plan (LLP). You won’t pay taxes on the withdrawals but you have to pay it back within a certain amount of time.

3) Use your RRSP over contribution limit.
You can over contribute by $2,000 to your RRSP before paying the fee of 1%. Some people purposely over-contribute up to the limit to take advantage of tax-deferred growth and compounding in their RRSPs. You can learn more here.

Thinking About Selling Over the Winter Months? Get Your Home Ready…

General Trish Pigott 2 Feb

Selling Your Home in the Winter
While you might think selling your home in winter is harder, with the right considerations it doesn’t have to be! When selling your home during warmer months, the focus is typically on curb appeal and gardening, as well as having bright colors and patterns to draw out different rooms. While curb appeal should not be forgotten in winter months, the focus should be centered on creating a warm, comfortable and welcoming space. Below are some tips on how to do this:

  •     Curb Appeal: If you live in an area that receives high amounts of snow, be diligent about keeping your sidewalk and driveways clear for visitors, and to keep your home looking clean for the viewing. Always make sure to sweep any fallen leaves or debris.
  •     Make Your Entrance Welcoming:  Clear your front door area so it is warm and welcoming, have a nice planter, welcome mat or wreath on your door.  Setting the tone as they enter will change the showing.
  •     Keep it Cozy: Ensuring your home is sufficiently heated during showings will also go a long way to making it feel more comfortable; a steady 68 to 70 degrees Fahrenheit during showings is ideal.
  •     Light and Inviting: With days being shorter and darker during winter, ensuring your home is well-lit and inviting can make a big difference. In some cases, you may consider repainting the walls before listing your property.
  •     Declutter: When selling, it is important to declutter your home so that it looks its best and gives room for people to imagine their own belongings in your space.   Clear your counters, remove large amounts of family photos from bookshelves and put away the mountains of toys.  Even if you have to box them up for a period of time while the house is being shown.  This is great for young kids as it feels like they get new toys once they dig into the boxes again.  It also gives people a vision of how they want to live in the home.  Clutter free and organized!
  •     Bake Cookies!:  Everybody loves a home that smells like baking, this helps envision living in the space.
  •     Define Property Boundaries: If you are showing your home in the middle of snow season, be sure to mark the four corners of your property so that potential buyers can see exactly what they are getting.

While there is some extra work with selling your home in the winter due to the weather conditions, it can pay off! Buyers tend to be highly motivated and often there is less competition for sales during this time giving more focus to your home.