Orlando Lopez, CFP, CIM®, CIWM

Global corporates hold potential for capital appreciation and higher yield, to complement core bonds. Learn more about Mackenzie Global Corporate Fixed Income Fund: https://ow.ly/eKEH30sEcZS

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What you need to know about the Bank of Canada’s latest rate cut. Josh Nye, Canadian Fixed Income Strategist, shares three key takeaways.

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When choosing an executor (or "liquidator" in Quebec), there are many factors you will need to consider. One important consideration is where the potential executor resides, as that may cause complications down the road for your estate. Learn more. #estateplanning #intergenerationalwealth #wealthmanagement

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📅 Something to look out for with the First Home Savings Accounts(FHSA) as we head into the last half of 2024. 😃 FHSAs were introduced in April of 2023 to help Canadians save for the purchase of a home. Most financial institutions didn’t offer them until the end of 2023. As such, I believe this is why there is a carry-forward provision with contributions. 💰You can contribute $8,000 per year to a FHSA and have that contribution be used to reduce your income in the current year or a future year. You must be at least 18 years of age(or the age of majority in the province where you live) to open a FHSA. There are also restrictions about owning a house and past ownership. 🧮 The maximum amount of room you can carry forward or contribute the following year if you missed a year is 8,000, making the maximum contribution anyone can contribute in a single year $16,000(assuming they have room from a previous year). The lifetime contribution amount is $40,000 to the account. ⏰ If someone didn’t contribute last year or this year, the carry-forward room from 2023 will be lost at the end of the year. #FHSA #housing #canada

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4 Comments

For our last (of 4) strategy pieces on advanced RRSP planning, we look at the “meltdown strategy”. This strategy aims to replace excess RRSP assets with non-registered assets, but is the riskier that the others we have discussed because it uses an investment loan (leverage). The meltdown strategy follows the same principal as the preceding posts – it can be more tax efficient over the long-term to spread out RRSP/RRIF withdrawals over more years. This, of course, depends on both your and your spouse’s retirement date. We talked 2-weeks ago about how a spousal RRSP being key if you think your spouse will retire before you…but I digress. For the meltdown strategy, you would obtain an investment loan to be invested in a non-registered account. You would then pay the interest component of the loan by withdrawing (deregistering) the exact same amount of funds from your RRSP. From a tax perspective, you are accomplishing an offsetting income inclusion (RRSP withdrawal) with an interest expense deduction from the loan – because the cash from the loan is invested in a non-registered taxable account, you can write off the interest. Said another way, you’ve created an offsetting income-expense balance, at least in theory (there are withholding taxes on RRSP withdrawals so sizing is key), which is why you should consult your tax professional before implementing anything like this. It is quite simple to create a tax-efficient non-registered account strategy targeting capital gains. Even heavily discounted bonds will accomplish this quite nicely. This is a complex strategy so you’ll need someone reliable to model this out for you, but it has the potential to help you restructure your savings if you find yourself very RRSP heavy.

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Yup, it has been painful but ever since the Bank of Canada started cutting rates, what a rally in the REIT space! Although moves off a bottom tend to be quick and violent. As the article notes, the catalyst is BoC rate cuts coupled with dividend yields too high to ignore. Many investors, like ourselves for our Income Portfolio, were waiting for that first rate cut with signals of more to come before deploying capital. In addition, residential & industrial REITs largely delivered impressive rent growth in Q2, adding to their attractiveness. This simply reinforces the fact that high-quality assets can generally deliver during tough environments.

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