Skip to content

TFSA or RRSP? 2024

One of the most common investment questions Canadians ask themselves today is, “Which is better, TFSA or RRSP”?

Here’s the good news – it doesn’t have to be an either or choice.  Why not do both? Below are the features of both plans to help you understand the differences.

Tax-Free Savings Account (TFSA)

 Any Canadian resident age 18 or over may open a TFSA. Contribution is not based on earned income.  There is no maximum age for contribution.

  • From 2019 to 2022, the maximum contribution each year has been $6,000, was increased to $6,500 in 2023. In 2024, the contribution has been increased again to $7,000.
  • There is carry forward room for each year in which the maximum contribution was not made. For those who have not yet contributed to a TFSA, the cumulative total contribution room for 2024 is $95,000 and will increase each year in January. The TFSA was first introduced in 2009.
  •  The deposit is not tax-deductible, but the funds accumulate with no income tax payable on growth.
  •  Withdrawals may be made at any time on an income tax-free basis.  Withdrawals create additional deposit room commencing in the year after withdrawal.

Read more

Protecting Your Family

Let’s face it, raising a family today can be financially challenging.  The cost of living continues to increase, housing costs are rising along with education and extra-curricular activities for our children.  It is tough to make ends meet and still have something left over at the end of each month.

Most families today require both parents to work to afford the lifestyle they enjoy.  Losing one of those incomes through premature death, illness or a disability is a real risk that many families would have a difficult time facing emotionally and financially.

How do you protect your family?

  • Life insurance is designed to protect your family by providing the resource to replace income, pay off debt, and fund future education costs in the event that one of the parents dies.
  • Disability, or income replacement insurance, is designed to replace lost income if an individual is not able to work due to accident or sickness.
  • Critical Illness insurance will pay a lump sum benefit in the event of a diagnosis of many major illnesses.

Read more

What is Key Person Insurance?

Most business owners understand that assets vital to the success of the enterprise should be insured.  Premises are routinely covered for fire and/or theft; vehicles used to make deliveries, insured; machinery needed for manufacturing, also insured. Given that these tangible assets are instrumental in the success of the business, it makes good business sense that the business is protected in the event of a loss.   But what about key employees? Many business owners overlook the impact on their business should a key employee die unexpectedly.

If you own or manage a company whose continued success is dependent on key people (it might even be you), it would be prudent to insure all key personnel whose death or incapacity would negatively affect profitability.  Key persons are those who contribute to the continuing success and profitability of the enterprise.

What happens when an owner or key person dies or becomes disabled? Read more

Segregated Funds for Estate Planning

As we age and our thoughts turn to estate planning, Segregated Funds may present a valuable planning opportunity.  As we progress through the stages of life our investment focus changes from growth to income to preservation.  Usually, the expected rates of return reduce as we age, primarily because we have less time to make up for a loss and feel the need to be more conservative in our approach.  Anyone who has retired shortly before or after a major market correction (or crash!) understands the impact volatility can have on their enjoyment of a comfortable retirement.

In addition, none of us want to leave an estate for our heirs which could be a fraction of what was intended or be a catalyst for family discord.   Fortunately, you do not have to forego the opportunity of growth in order to preserve the capital that you wish to leave to your family.  Segregated Funds not only protect your estate against market fluctuations, they also provide the comfort of knowing the inheritances you wish to leave will be received by those for whom they were intended.

What are Segregated Funds?

Segregated funds are similar to mutual funds and represent market- based, equity, bond or fixed income investments.  They differ from mutual funds in that as they are offered by life insurance companies, they have special benefits that mutual funds do not.  These special benefits include: Read more

Six Important Reasons to have a Will

It has been said that a Will is the last message you will leave your family.  Having a Will can provide clear direction as to what your wishes are and who will get what.  Die without a Will (known as dying intestate) and chaos will likely be the result.  Having a Will allows you to provide for certainty instead of chaos.

Most of the reasons to have a Will have to do with what happens if you don’t have one and that often will depend on what province you reside in.  Each provincial government has its own Wills and Estate legislation which also provides for the rules regarding intestacy.  The following are some of the reasons to have a Will and what could result without one.

  1. Informs your family how and when your property is to be distributed

Your Will affords you the opportunity to give clear instructions as to whom will receive your wealth.  It also allows you to make bequests of certain items such as family heirlooms which you may wish to leave to a specific individual. For those who wish to leave funds to a charity, the Will allows you to do this.  Without a Will, this opportunity may be lost. The bottom line is that you make the call.  Dying without a Will means that the provincial government will make the determinationon how your estate is to be distributed depending on the intestacy laws. Read more

Basic Planning for Young Families

As a young family, you will be facing a lot of new challenges that you may or may not be prepared for along the way. Whether it’s children, a mortgage, or unexpected expenses that come up, now is the perfect time to start thinking about all the potential pitfalls that may arise.

In this article we want to share some of the ways that insurance can help you stay ahead of these issues, as well as how to prepare yourself for some of life’s obstacles that you and your family may face.

What Issues Should Concern you the Most?

Now that you’re starting a family, your life is just one piece of the puzzle. Your spouse and any children are also top priorities, meaning that you should consider what could happen to everyone in a variety of scenarios. Here are some crucial questions you and your partner should discuss:

What happens if one of us dies? – While this question may seem a bit morbid, it’s a necessary possibility to plan for, particularly if you are a one-income household. Even with two breadwinners, chances are that your bills and financial responsibilities are too much for one person, meaning that you need to supplement any lost income as a result of one of you passing away. Read more

ARTICLES OF INTEREST

3
Oct

DM Portfolio Commentary – Q3 2024

Regime Change – In the final paragraph of our first quarter letter, we wrote:
‘In the next issue of this commentary, we could very well be talking about a quarterly decline for your equity allocation, and it may be more than just a speed bump. History and the well documented mistakes of others, however, tell us that our best course will be to stay put, regardless of how bleak things might seem in the moment or how tempted we are to try and outsmart the market.’

While the three months immediately following that report passed without incident, it looked like our warning might be coming to fruition halfway through Q3.

Click here to read more:  DM Portfolio Commentary – Q3 2024

12
Sep

Cardinal Update – September 2024

A Double Dose of Good News – Bank of Canada cuts rates again as TSX hits all-time high.

Amid slowing inflation and rising unemployment, the Bank of Canada kicked off September by lowering its benchmark rate by another 25 basis points.

It’s the third quarter-point rate reduction in 13 weeks, bringing the country’s key interest rate down to 4.25 per cent as the central bank continues to walk an economic tightrope with inflation falling to 2.5 per cent and unemployment rising to 6.6 per cent.

Company Focus: Element Fleet Managment – The next time Amazon delivers a package to your door, thank Element Fleet Management for overseeing the vehicle that brought it to you.

Click here to read more:  Cardinal Update – September 2024

5
Sep

DM Monthly Report – Sept 2024

SMALL POWER – Partway through the summer, Sleep Country Canada was bought by Fairfax Financial, marking the fifth acquisition of a DM stock position within a 12 month span. The good thing about buyouts is that to convince target company management and shareholders to accept such deals, a substantial price premium is usually required and, as the accompanying table illustrates, recent bids for DM holdings have followed this rule.

Click here to read more:  DM Monthly Report – Sept 2024

19
Jun

DM Monthly Report – Summer 2024

WHAT HAPPENS TO STOCKS FEATURED IN THE DM LETTER? It’s a bit of Dixon Mitchell lore (mostly perpetuated by our research team!) that whenever a stock is mentioned in our monthly newsletter, it gets the performance equivalent of a kiss of death. To investigate the validity of the claim, we calculated each stock highlighted since the covid market bottom has faired against its relevant benchmark to the end of May 2024.

Feature Stock – Jamieson Wellness Inc. (JWEL) In May we established an initial position in JWEL in the DM Canadian Equity Portfolio.

Click here to read more:  DM Monthly Report – Summer 2024