As many of you have probably heard, there was some big news announced in the last budget that will benefit your Investment Plans. The budget, which was the first for Finance Minister Joe Oliver, included some changes to EI Benefits, Registered Disability Savings Plans and Foreign Asset Reporting. It also included a large increase in what Canadians will be allowed to hold in their Tax Free Savings Accounts. As previously promised to Canadians, the Government will be allowing contributions of $10,000 per year starting January 1, 2015. For many Canadians, this will mean that their total limit will be a healthy $41,000. Those with Non-Registered Investments can quickly take advantage of these Tax Free Savings by converting units of their Cash Accounts to TFSA assets.
The other very important change that was introduced involves Registered Retirement Income Fund (RRIF) minimums. The old rules insisted that those who turned 71 would need to take out at least 7.38% of their RRIF accounts. This amount then increases every year after that. More flexibility will be added to the plan going forward and seniors should now be able to take an amount closer to 5% at age 71. For those who don’t want to redeem a lot from their Registered Plans, they will be able to leave more in their RRIFs & LIFs thus sheltering more money from taxation.
As always, I’m more than happy to discuss these changes in more detail. Feel free to give me a call or an email!
Bryce A. Borden