2017 Saving and Investment Thread

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2017 Saving and Investment Thread

Postby Jonrox » Feb 13th, 2017, 4:32 pm

Maybe this isn't the right forum for it, but I thought we'd quickly see this discussion degenerate like the housing thread did... so Bickering Room it is (unless a mod deems it worthy of another spot).

There's just a couple of weeks left to buy RRSP's for the 2016 tax year. I've been doing a bit of research and am deciding between TD eSeries funds (not exactly sure which ones yet) and Tangerine's funds (Balanced Portfolio for RRSP and Equity Growth for TFSA contribution). Anyone with experience with either? Or another recommendation?

And sorry, but making mortgage payments doesn't count as saving. Unless you own multiple homes, I don't think your primary residence counts as an investment.
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Re: 2017 Saving and Investment Thread

Postby Veovis » Feb 13th, 2017, 6:01 pm

A lot again matters on individual desires. Many desire "fun now" and hope to make it big later, and others choose a long steady life of slow savings for a modest wealth.

However with one good idea one person can become a massive millionaire, while by one bad choice others can become ruined after years of smart choices.

What stock to buy. Not my realm to advise on that to be honest, I have looked more at the Dave Chilton life path (before I even heard of him) where low debt responsible investments and starting young were pillars in my long term plans.

However, I'm not looking to be rich. Some people I know likely see my family as well off while others might see us as having done less that they think people should, it's all a matter of perspective. When it comes to talking to a person at a bank or firm though, don't trust them, they are there to sell you a product just like a realtor or car salesman, however, take their information and go through it and look at 5 year 10 year and greater returns for the funds/companies they feel you should invest in.

Solid investing is on a 20-40 year time line with adjustments and flexibility as the world changes. The cool new versions of Bre-X or dotcoms etc though maybe making a few rich isn't investing, it's gambling.
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Re: 2017 Saving and Investment Thread

Postby Gilchy » Feb 13th, 2017, 6:54 pm

Talk to an independent Advisor. Ask how they get paid, why they recommend their solutions. These steps will eliminate they self-interested, but a good Advisor helps with the long term planning process and is better informed than the average person on appropriate investment strategies.
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Re: 2017 Saving and Investment Thread

Postby Even Steven » Feb 13th, 2017, 11:44 pm

Can somebody tell the rule of thumb for deciding what to invest first - RRSP or TFSA. Both me and my wife have a lot of room in both. We also have a sizeable pile of cash we'd like to invest. We can fully top off RRSP or TFSA but not both. My logic is that first we should cover RRSP side of things which will produce sizeable tax refunds this year and few next years also. And we can toss them into TFSA I guess.

Does it make sense?
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Re: 2017 Saving and Investment Thread

Postby LANDM » Feb 14th, 2017, 3:35 am

Even Steven wrote:Can somebody tell the rule of thumb for deciding what to invest first - RRSP or TFSA. Both me and my wife have a lot of room in both. We also have a sizeable pile of cash we'd like to invest. We can fully top off RRSP or TFSA but not both. My logic is that first we should cover RRSP side of things which will produce sizeable tax refunds this year and few next years also. And we can toss them into TFSA I guess.

Does it make sense?

Depends if you will be taking it out before retirement or want that flexibility. If so, then tfsa. If not, and you want the immediate tax deduction, then rrsp.
That is neither all encompassing nor specific for everyone. But, you get what you pay for with internet advice.
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Re: 2017 Saving and Investment Thread

Postby Static » Feb 14th, 2017, 5:15 am

Even Steven wrote:Can somebody tell the rule of thumb for deciding what to invest first - RRSP or TFSA. Both me and my wife have a lot of room in both. We also have a sizeable pile of cash we'd like to invest. We can fully top off RRSP or TFSA but not both. My logic is that first we should cover RRSP side of things which will produce sizeable tax refunds this year and few next years also. And we can toss them into TFSA I guess.

Does it make sense?



I would fill the TFSA and not worry about the RRSP's. RRSP's are tax deferment plans. While you receive tax credits for the funds you place in the RRSP, you will have to pay the tax when you withdrawal. Given our national debt and the demand the boomers will place on medicare and CPP it is almost a guarantee that taxes will be higher down the road. Therefore, it is better to pay the lower tax today rather than later. I don't use RRSP's whatsoever. Whatever funds I cannot place in the TFSA go into a non-sheltered account that allows for the dividend tax credit to be used.
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Re: 2017 Saving and Investment Thread

Postby Static » Feb 14th, 2017, 5:19 am

Jonrox wrote:Maybe this isn't the right forum for it, but I thought we'd quickly see this discussion degenerate like the housing thread did... so Bickering Room it is (unless a mod deems it worthy of another spot).

There's just a couple of weeks left to buy RRSP's for the 2016 tax year. I've been doing a bit of research and am deciding between TD eSeries funds (not exactly sure which ones yet) and Tangerine's funds (Balanced Portfolio for RRSP and Equity Growth for TFSA contribution). Anyone with experience with either? Or another recommendation?

And sorry, but making mortgage payments doesn't count as saving. Unless you own multiple homes, I don't think your primary residence counts as an investment.


Stay away from funds. There are too many hidden fees and admin costs. Plus, very few outperform the market. Look for a handful of Canadian Titans with a lengthy history of increasing their dividend, utilize the DRIP program if they offer a discount, and forget you own them.
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Re: 2017 Saving and Investment Thread

Postby Veovis » Feb 14th, 2017, 11:53 am

Even Steven wrote:Can somebody tell the rule of thumb for deciding what to invest first - RRSP or TFSA. Both me and my wife have a lot of room in both. We also have a sizeable pile of cash we'd like to invest. We can fully top off RRSP or TFSA but not both. My logic is that first we should cover RRSP side of things which will produce sizeable tax refunds this year and few next years also. And we can toss them into TFSA I guess.

Does it make sense?


Keep in mind these are rounded quick and dirty numbers for explanation purposes.

Many many factors here to actually consider. The big one is income level. There is not simply a tax deferral on RRSP, but a tax savings to be had. If you are getting the RRSP deduction to save at a 40% tax rate now and pay at 20% later, there can be a benefit on tax free money there.

If the refund on the contribution in put back into RRSP every year.... at a 40% tax rate over 7 years one 10,000 RRSP contribution would net you a total of 16639.36 in contributions from tax refunds reinvested over 7 years....that's before interest which would make the total balance even higher, BUT you then must reduce the balance by a lower tax rate and compare over a long term TFSA return and see what works better. The RRSP will be a better option DEPENDING on your current tax rates based on both being in the same investment. (To note at a 30% tax rate the RRSP contributions over 7 falls to 14282.29, it matters what tax bracket you are in)

If you currently earn at a 30% tax rate and plan to draw at a 25% tax rate when retired, the TFSA will be a better option.

If you work and your spouse doesn't (or there is a large income gap between the 2) spousal RRSP's also have parts to play to balance retirement incomes into 2 lower income accounts instead of 1 larger account taxed at a high rate.

If you will receive a pension and your spouse won't spousal RRSP can level out your incomes again, or again TFSA might be the better route.

There are many things to consider and all can be rather easily calculated but the right people. The big thing is, this is an internet forum and the best advice you will receive is to talk to the right professional about those things. Without the fine personal details of your life, income, and timeline it makes a difference as to what financial plan is best for you.

As with most things though, a mix of both is likely going to be used in ones overall lifetime.
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Re: 2017 Saving and Investment Thread

Postby slootman » Feb 14th, 2017, 2:03 pm

Jonrox wrote:There's just a couple of weeks left to buy RRSP's for the 2016 tax year. I've been doing a bit of research and am deciding between TD eSeries funds (not exactly sure which ones yet) and Tangerine's funds (Balanced Portfolio for RRSP and Equity Growth for TFSA contribution). Anyone with experience with either? Or another recommendation?


Vanguard has funds similar to the eSeries and Tangerine funds, which are also quite popular. canadiancouchpotato.com has lots of write-ups on different funds and strategies which may be worth reading. Don't get lost down the rabbit hole :). Buying specific stocks requires more research and ongoing attention, which may or may not appeal to you.

As others have mentioned, RRSP vs TFSA can get complicated with tax considerations so a visit to an advisor could be beneficial. A fee based advisor may be more appropriate for such a meeting vs one that wants an annual cut of your portfolio. Also note that some funds may have tax implications when in a TFSA instead of an RRSP.
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Re: 2017 Saving and Investment Thread

Postby Static » Feb 14th, 2017, 2:30 pm

You should be able to find a RRSP vs TFSA calculator online.
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Re: 2017 Saving and Investment Thread

Postby Veovis » Feb 14th, 2017, 4:29 pm

Static wrote:You should be able to find a RRSP vs TFSA calculator online.


2+2=4

so does 2+3*4-5+2-7=4

Unless you know all the variables to count you won't get the right answer from an online calculator, what they are really good for is telling people their preconceived notions are correct when they choose to leave out variables they may not like, or simply don't know what to evaluate.

As with most things in life, find the right professional to explain things, then check on it to make sure it is on track.
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Re: 2017 Saving and Investment Thread

Postby Jonrox » Feb 14th, 2017, 4:31 pm

How about doing both? Contribute to your RRSP and put the refund into your TFSA?

The individual stock picking isn't something I'll put enough time and energy into in order to be a smart and effective investment.
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Re: 2017 Saving and Investment Thread

Postby Even Steven » Feb 14th, 2017, 4:57 pm

Jonrox wrote:How about doing both? Contribute to your RRSP and put the refund into your TFSA?


Well, this is the ideal scenario, right?

I think it's mostly timing I'm concerned about. We can fully fund RRSP right now. TFSA accounts have 40K room for both of us. We can't do both RRSP and TFSA at the moment but using the refunds from the taxes + putting money aside through out the year should be able to catch up on TFSAs also. But with TFSA there's no deadlines, RRSPs do have it.

Ideally going forwards both RRSP and TFSA are always fully funded + extra going into non-registered accounts, I guess.
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Re: 2017 Saving and Investment Thread

Postby Veovis » Feb 14th, 2017, 5:08 pm

It's a good idea to talk to the right person as they can find the right balance for you between the 2. 100% RRSP might be right, 100% TFSA might be right, RRSP with the additional refund put into an TFSA might be right.

Until the specific details for yourself are known, the proper calculation can't be made as there is an ideal balance for you to save the most overall.

No matter the details though, use something, either, both, anything really and plan for your future.
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Re: 2017 Saving and Investment Thread

Postby Ub2 » Feb 14th, 2017, 5:40 pm

Gee, this subject was covered at length a ways back from the topic 'TFSA's tax dodge for the rich'.

I grabbed this video from that past post and I think it has an excellent explanation describing the uses and differences between TFSA's and RRSP's.

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