Canadian Finance and Investing Thread - Paying More is our National Pastime

The Something Awful Forums > Discussion > Ask/Tell > Business, Finance, and Careers > Canadian Finance and Investing Thread - Paying More is our National Pastime

Kashwashwa: Jul 11, 2006; You'll do fine no matter what. That's my motto.

Has anyone looked into ACIC? http://www.acicinvestor.ca/

It's a mortgage investment company and they're offering 7% on TFSA now, which seems insanely good. They have a pretty good track record, so I'm trying to find reasons not to move my TFSA fron ING to them.

I just finished reading the OP... I'm guessing the housing market bubble is one reason to stay away.

Kashwashwa fucked around with this message at 17:27 on Oct 3, 2013

# ¿ Oct 3, 2013 17:22

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# ¿ Apr 28, 2024 23:36

Kashwashwa: Jul 11, 2006; You'll do fine no matter what. That's my motto.

I changed my TFSA from ING cash account to Questrade so I could buy ETF's. I've made 2.6% profit in 2 weeks. I guess the markets are doing quite well in general.

Anyway, one suggestion - when using Questrade, be sure that you change your CAD to USD if you want to buy a vanguard ETF. I just made a purchase of a Vanguard ETF and noticed I owed Questrade a substantial amount.

If you're looking for a canadian alternative to the Vanguard VTI, iShares XUS.TO is very close.

# ¿ Oct 31, 2013 14:51

Kashwashwa: Jul 11, 2006; You'll do fine no matter what. That's my motto.

Kal Torak posted:

This is only true if you are buying an ETF on a US exchange. If you buy the previously mentioned VCN or VDY, you would not have this problem.

Aha - good to know

# ¿ Oct 31, 2013 15:09

Kashwashwa: Jul 11, 2006; You'll do fine no matter what. That's my motto.

ninja edit

# ¿ Nov 4, 2013 04:36

Kashwashwa: Jul 11, 2006; You'll do fine no matter what. That's my motto.

Lexicon posted:

You've missed the point entirely - which is perfectly ok, because that's why this thread exists

An RRSP trades taxation today for taxation in future. A contribution generates a tax saving now... But the government gets its cut when future withdrawals happen.

This is entirely unrelated to the return generated by the holdings in these accounts.

A TFSA and all its earnings belong fully to the owner, now and in future. No downstream tax on withdrawal or earnings.

Yeah, I did a bit more reading after my post and realized the error in thinking.

Now that I look at it, would it make sense to try to get rid of my RRSP all-together, and migrate it into my TFSA? Basically come retirement time for me, I think the RRSP will actually be hurting me by 'clawing-back' into my GIS.

Apparently I would be taxed 10% on a 5,000 withdrawal (still leaving the $4,500 to be taxed of course), but I could chip away at the RRSP I have.

# ¿ Nov 4, 2013 18:58

Kashwashwa: Jul 11, 2006; You'll do fine no matter what. That's my motto.

Withdrawing 5k would still leave me in the same (25%) tax bracket of the province I live in. I have 35k in an RRSP.

Kashwashwa fucked around with this message at 20:07 on Nov 4, 2013

# ¿ Nov 4, 2013 20:04

Kashwashwa: Jul 11, 2006; You'll do fine no matter what. That's my motto.

Vehementi posted:

Reading through this entire thread... I don't know if it's been corrected yet but I did not see it on the first page of posts.

There is no penalty for "early" withdrawing of RRSPs, aside from it possibly being a bad idea depending on your other income that year.

The "withholding tax" is not a penalty: it is them simply taking the tax early, just like your employer withholds income tax on your salary. If this ends up being more (or less) tax than is appropriate (calculated as if the money withdrawn from RRSP is standard income), then this is all fixed come tax time.

Example:

You are 25 and you lose your job at the end of 2013 and have no income in 2014. In mid-2014, you withdraw $5000 from your RRSP and pay "withholding tax" of 5% or 10% or whatever it is. You earn no other income in 2014. Your tax refund for the 2014 tax year (received in early 2015) will refund those taxes, because the government guessed wrong and took extra (it turned out that you are under the $9000 allowance, under which you pay 0% tax rate).

Example:

You have $100k of income and want to buy a boat or some poo poo so you pull $5000 from your RRSP like a dumbass. 5% or 10% or whatever is withheld. During tax season next year, you will actually owe even more tax, because that $5000 should have been taxed at your marginal rate which is like 38% or some poo poo so you're going to get a tax bill for ~$1500.

Thanks so much for explaining this... I was still misunderstanding RRSP withdrawal. This makes converting my RRSP into a TFSA so much simpler.

# ¿ Jan 2, 2014 06:12

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# ¿ Apr 28, 2024 23:36

Kashwashwa: Jul 11, 2006; You'll do fine no matter what. That's my motto.

Just a heads up to people trading ETFs using Questrade - for some reason I was assuming you can buy AND SELL ETFs commission free. I think the wording "trade ETFs commission free" is what made me think that. Anyway, it's only buying that is free, you are still charged the commission on selling.

# ¿ Jan 30, 2014 18:49

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