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Weekly wrap: fingers crossed for TFSA doubling, how to spend your tax refund, looking under the Robo hood

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Gordon Pape (www.everythingzoomer.com)

Gordon Pape, author of the definitive TFSA book, Tax-Free Savings Accounts,  wrote a couple of good pieces this week for the Globe & Mail on what next Tuesday’s federal budget may have in store for the TFSA. In TFSAs benefit more than the rich, Pape listed various groups that can benefit from TFSAs, including seniors, savers, young people, income splitters and low-income Canadians. Or as I’ve said, pretty much every Canadian 18 years of age or more.

An earlier Pape column on Monday titled Oliver’s plan to raise TFSA limits raises many questions, looked at whether the promised “doubling” of an annual TFSA contribution limits would be double the original $5,000 limit, for a total of $10,000, or double the current $$5,500 limit for a total of $11,000. Hey, we’d be happy with either event! The other main question is how inflation indexing would be handled.

Over at Retirement Redux, Sheryl Smolkin looks at What Seniors Want in the federal budget. Continue Reading…

Why It’s Important To Talk With Your Kids About Money

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BriefingBy Gary Rabbior,

Special to the Financial Independence Hub

Do you talk with your kids about money matters? Are you preparing them to handle the financial decisions and responsibilities they will face in their lives? Do you get a sense that your kids are getting the financial knowledge, or developing the financial skills, in school that they will need in life? Or do you know much at all about what your kids know about money – and how they make financial decisions>

If you are like many parents today, the answers to those questions may not be very encouraging. In this day and age, with money matters so dominant in so many peoples’ lives, it almost seems surprising to have to advocate for talking with our kids about money to help them prepare for their financial futures. But that is what we  — The Canadian Foundation for Economic Education (CFEE) and BMO Financial Group — are doing with the Talk With Our Kids About Money Day program, which happens today (Wed., April 15th).  We are encouraging and helping parents and teachers to talk with our kids about money.

Early days for school-based Fin Lit Continue Reading…

Weekly wrap: Futurepreneurs, seminar ripoffs and millennial homeowners

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businessman and businesswoman outdoorsWe’ve talked on the Hub before about older Boomerpreneurs (Baby Boomer entrepreneurs) but what about younger entrepreneurs? After all, Bill Gates and Steven Jobs made the leap into entrepreneurship while they were barely out of their teens. The Million Dollar Journey blog this week did a good piece on the Futurepreneur Canada programs. 

Beware however some entrepreneurs who may be getting rich on your desire to become an entrepreneur via real estate. Read this Boomer & Echo blog: Free Seminar — Learn How to Get Ripped Off.

And while we’re on the subject of real estate, check out the Broke Millennial’s recent blog on The Compromises Millennials Make to be Homeowners.

In Canada there has long been talk about expanding the CPP, or Canada Pension Plan. But most of the chatter in the United States has been about retrenching on social security benefits. Riding to the rescue is celebrity economist Paul Krugman, who argued this week in the New York Times the Case for Expanding Social Security.

But just in case you do fall short in saving for retirement, you can take heart from Jonathan Clements’ article in the Wall Street Journal this week, arguing Why you will need less money than you think for Retirement. Of course, we here at the Financial Independence Hub don’t much believe in the outdated concept of Retirement. We prefer the term Findependence, Continue Reading…

A murder mystery: who will kill the global economy?

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Andrew Busch (Twitter.com)

By Jonathan Chevreau

One of the more entertaining financial presentations at this week’s BMO investing conference in Chicago was a keynote talk by author and broadcaster Andrew Busch on who killed the global economy. (I qualify this with the phrase financial presentations because Rick Mercer’s talk was also highly entertaining but could hardly qualify as being financial).

By contrast, Busch had worked at BMO Capital Markets for 22 years earlier in his career and grew up in Chicago. His financial research is available free here.

Billing his talk as a “Murder Mystery,” he ran movie clips from various Film Noirs to illustrate his points.

Among his suspects; the ECB’s Mario Draghi, Japan prime minister Shinzo Abe, China president Xi Jinping and the Federal Reserve’s Janet Yellen. Busch played the role of “Private Economic Investigator.”

Resemblance to Greece?

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Suspect 1

Starting with Yellen, he submitted clue number 1 as the unemployment rate. With 3 million Americans underemployed, this fact shows up in sluggish wage increases so “we’re not seeing an acceleration in wealth gains so are not seeing inflation.” What jumps out from the latest job numbers is where they are located; 14 million Americans are employed in local government, another 2.7 million in the federal government and 5 million more in the states. Continue Reading…

Having retirement options means freedom

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Robb Engen, Boomer & Echo

By Robb Engen, Boomer & Echo

Special to the Financial Independence Hub

Saving outside of my defined benefit pension plan will give me several options to consider when it comes to retirement.  To me, options mean freedom, even though I’ll be faced with some tough choices.  Here’s why:

According to my plan provider, I should be able to retire at 57 and receive an annual pension of roughly $64,800.  That will equal approximately 55 per cent of my average salary in my top five earning years.

(Note that I contribute nearly 12 per cent of my salary toward the pension plan each year, in case anyone believes these retirement benefits were conjured out of thin air).

I’ve also built up a decent sized RRSP portfolio – over $100,000 before my 35th birthday.  If left alone with no further contributions, and assuming an 8 per cent annual return, this portfolio will be worth $543,000 by the time I turn 57.

To stay in a 32 per cent tax bracket (22 per cent federal, 10 per cent provincial) I could withdraw up to $23,000 (in today’s dollars) from my RRSP to give me an annual salary of $87,800.

The RRSP Meltdown strategy Continue Reading…