Winter seems to be officially here. I hope you are keeping warm and are joyously getting ready for the upcoming Christmas Season. I have included a brief video update and you may want to check out the links below.

As always if you have any questions, comments or concerns, please call me at 403-341-5899.

• I am often asked about the rising interest rates. This article provides some great insight. Rising interest rates and your finances in 5 questions

• Christmas can be a stressful time. Here are some tips on how to best manage stress this time of year.

• Investment Outlook for 2023 webcast featuring Rt. Hon. Stephen Harper it is available on demand, you can register here

LifeLegacy Planning Tips for year end:

• RESPs: even with increasing rates on investments, there is not much better than the 20% return on your investment that the Canada Education Savings Grant provides. If there are children or grandchildren in your lives that have future aspirations of post secondary education, an RESP can be a fantastic way to help them on their journey. The annual grant is based on contributions in a calendar year. We would be happy to help you determine the potential grant available to your children or grandchildren, and help you set up or contribute to your RESPs.

• TFSAs: investing is hard enough in today’s world. Worrying about paying taxes on your returns is one extra hurdle. Investing in a Tax-Free Savings Account allows your money to grow free from tax and pay out to beneficiaries without tax. Did you know that since the TFSA was launched that you could up to and including this year have invested $81,500? TFSAs are available to all Canadian Residents over the age of 18. If you have carry forward room, you have not lost out, and can still contribute. In fact, in Jan 2023 the annual contribution room has increased to $6,500.

• RRIF Income: Registered Retirement Income Funds are one option to convert your RRSP to when you want to start to draw income. You can draw from a RRIF at any age, however, the regulations require that in the year you turn 72 you must start to draw from the RRIF. While RRIFs have no maximum amount that can be drawn, the government does require that you draw at least the minimum. If you are under age 71, the formula to determine your RRIF minimum is 1 divided by 90 minus your age multiplied by the year end value of your RRIF. If your age is over 71 there is a prescribed rate published by CRA .

Let’s break that down. If you are 65 and have a RRIF you are required to draw 4%. If you are 80 you are required to draw 6.82%, at 85 the required payment is 8.51%. The escalating payment as you age is set to deplete your RRIF throughout retirement. By design the RRIF is supposed to decline. There are not many 85-year-old retirees that have the risk tolerance or time horizon which allows them to invest to get an expected annual return of 8.51%. If your RRIF is going down each year – you are doing things right. A planning tactic we often look at is how to take more from RRIF accounts each year, rather than potentially leaving balances to the final estate. If you can draw from your RRIF at a lower tax bracket early, and either a) increase your standard of living, or b) invest the surplus in your TFSA, the tax savings to the final estate are often significant.

• Realized Capital Gains or Losses: the volatility of the investment markets in the past 2 to 3 years have resulted in active trading. In 2021 many investors had large distributions of capital gains. 2022 has been less active, but may provide opportunities to create capital losses. It is likely worthwhile investigating if tax loss selling can be useful to you.

• RRSPs: While the deadline for RRSP contributions that will be deducted in 2022 is March 1, 2023, contributions can be processed at any time. We would be happy to review with you the potential tax savings of a contribution and how contributions can grow towards your future retirement goals. Even with market volatility and the idea that investments may be “on sale” as Sir John Templeton famously said the best time to invest is when you have the money.

Ed