Investing and the investment world can be complex. Re: Investing offers clear, unbiased answers to your questions on investing, from a trusted source.
Investir peut être complexe. Et le monde de l’investissement aussi. Le site Re : Investir est une source d’information fiable qui offre des réponses claires et objectives à vos questions sur l’investissement.
Roxanne M.
When you’re starting to invest, the options can seem overwhelming! However, before you make any decisions, there are some questions you should ask yourself:
You can invest money through an advisor at your bank or financial institution, through a registered financial advisor or an online investment advisor.
Tom
Our website, GetSmarterAboutMoney.ca, provides unbiased information on a wide range of investing topics, including converting your savings to income in retirement, receiving government benefits in retirement and other topics related to growing older.
How you choose to divest and choosing your retirement income options is based on your own individual financial needs and personal financial situation. There is no one option that is right for everyone. Speaking to a financial advisor or tax professional may help you understand how these options work for you and help you make a decision.
Terri
While your money is in a Registered Retirement Savings Plan (RRSP), you don’t pay tax on what you earn – whether capital gains, interest or dividends. However, generally RRSP withdrawals are fully taxed as income, and transfers into registered plans may also trigger tax events. Learn more about investing and taxes.
Speak to a financial advisor or tax professional for advice related to filing taxes, or before making changes to or withdrawals from your RRSP.
Shirley
Thanks for your question, Shirley. We do not have a specific Registered Retirement Income Fund (RRIF) calculator. Our RRSP Savings Calculator can be used to estimate the income your RRSP will generate in retirement, based on specified years in retirement and investment return.
The Canadian Retirement Income Calculator is a government resource that allows you to calculate expected retirement income from all sources – including RRIFs, other registered plans (like TFSAs), company pension plans, CPP and OAS.
The calculators on GetSmarterAboutMoney.ca, as well as the Canadian Retirement Income Calculator are only able to provide estimated retirement income. To learn more about the income you may expect in retirement, and to discuss your financial needs in retirement, speak to a financial advisor.
Satya
The rules for who can open a TFSA account are set and enforced by the Canada Revenue Agency (CRA). To open a TFSA in Canada, you must be over 18 and have a valid social insurance number (SIN). Additional rules apply if you are a non-resident – you can find this information on the CRA website.
The CRA has resources to help you find out how much TFSA contribution room you have available. You can check your TFSA contribution limit using these CRA resources:
Learn more about TFSAs on GetSmarterAboutMoney.ca.
Reginald
If you have never contributed to a Tax-Free Savings Account (TFSA) and you were eligible and at least 18 years of age in 2009 – the first year the TFSA was available – you should be able to contribute up to the full amount.
To check your TFSA contribution limit, you can use these Canada Revenue Agency services:
Learn more about TFSAs on GetSmarterAboutMoney.ca.
Paul
Thanks for your question, Paul! We have a variety of calculators on our website, GetSmarterAboutMoney.ca. Some of the calculators you can use to help estimate future investment worth are:
See all of the tools and calculators on GetSmarterAboutMoney.ca.
Keith P.
You may pay a set-up fee when you set up certain accounts, for example, a Registered Retirement Savings Plan (RRSP). Ask about fees and understand what you will pay for an account and services before you open an account.
You can learn more about RRSP fees on GetSmarterAboutMoney.ca.
Jason
The Registered Disability Savings Plan (RDSP) was established to help parents and others save for the long-term financial security of a disabled person (one who qualifies for the Disability Tax Credit). Four key points about RDSPs:
You can make lump-sum withdrawals at any time, with some additional rules regarding withdrawing bond or grant funds. The main function of an RDSP is to provide regular payments to the beneficiary, called lifetime disability assistance payments (LDAPs) no later than the year they turn 60. Learn more about receiving regular payments from an RDSP.
Speak to a financial advisor for advice related to investing in your RDSP, and making withdrawals.
Danny H.
There are many reasons why people choose to invest, but one reason is to meet personal and financial goals. For example, a specific goal may be:
Setting specific goals allows you to determine what you need to do to meet these goals. Investing your savings may help you reach these goals faster. For example, if you put $1,000 in a chequing account that earns no interest, in one year, you will have $1,000. If you invest that same $1,000 in an investment that earns 5%, in one year you will have $1,050. In 2 years, you will have $1,102.50. This is because of the power of compound interest.
No on investment strategy is right for everyone. Speak to a financial advisor to learn how to make a plan and set your financial goals, and to understand which investment products may fit your life and risk tolerance.
Jeff
Thank you for submitting your question to Re: Investing!
A locked-in retirement account (LIRA) is an account that holds money moved out of a pension plan. You may use one if you are changing companies and can take your pension savings with you. It works like a Registered Retirement Savings Plan (RRSP), but your money is locked in. You cannot withdraw the funds until you retire. You set it up with a bank or other financial institution.
We recently answered a question about LIRA that contains other information about LIRA, that you may find helpful. Here is the link: http://www.getsmarterreinvesting.ca/question/can-a-lira-be-included-in-a-self-directed-account/.
Michael
Thank you for your question, Michael.
If you sell an investment for less than you paid for it, you get a capital loss. At tax time, you subtract your capital losses from your gains (a capital gain happens when you sell an investment for more than you paid for it). This gives you your net gains. You pay tax on 50% – or half – of your net gains. The Canada Revenue Agency provides more details about how to use a capital loss.
Read our article about investors and tax.
We are not able to provide advice on individual taxes. Speak to a financial advisor or tax professional for advice about capital losses.
Karen
In general, anyone who sells securities in Ontario or provides advice about investing in securities must be registered with the OSC. You can check registration to find out if a person or company is registered and in which category.
If you have not met with the advisor yet, you may find our article about your first meeting helpful.
If you have any further questions about your advisor’s qualifications, you can contact the OSC’s Inquiries and Contact Centre for assistance.
JaneAnn
Thank you for your question, JaneAnn.
TFSA contribution room is indexed for inflation and annual limits vary by year. If you don’t contribute the full amount each year, you can carry forward the unused amounts, based on the contribution limits for each year. The contribution limit for 2018 is $5,500.
Learn more about TFSAs and comparing TFSAs and RRSPs. You can also learn how to find out your TFSA contribution room from the Canada Revenue Agency.
Speak to a financial advisor or tax professional for advice about the options that work best for your investment plan.
Richard
Thank you for your question, Richard.
You must close your Registered Retirement Savings Plan (RRSP) in the year you turn 71. You can withdraw your RRSP savings in cash, convert your RRSP to a Registered Retirement Income Fund (RRIF) or buy an annuity. Here is how RRSPs work. This article describes in more detail, how you can get income from your RRSP.
Speak to a financial advisor or tax professional for advice about the options that work best for your retirement plan.
Chiradee
Thank you for your question Chiradee. We are not able to provide specific advice such as what type of product is a good investment for an RESP account.
A Registered Education Savings Plan (RESPs) is a type of account that allows you to save for a child’s education after high school. There are tax benefits because there is no tax on the investment earnings, as long as they stay in the plan. There are other reasons to open an RESP. Until the end of the year the beneficiary is 17, the federal government also puts money into the RESP as a grant or bond. There are a number of investment options for RESPs including: stocks, bonds, mutual funds and GICs. Find out how you can open an RESP.
Read our brief overview on the different types of RESPs.
Speak to a registered financial advisor for advice about the options that work best for your RESP.
Rae
Thanks for your question Rae. We are not able to recommend specific products, but we are happy to provide resources to help you make an informed decision about where to invest.
Our inheriting money hub contains articles relating to ‘getting advice’ and ‘financial planning’ which may help you get started with building an investment plan. Before you decide how to invest money from an inheritance, make sure you look at your whole financial situation and determine if there are debts that you should pay off first. Learn how to create a balanced budget which can help you track spending and prepare for unexpected expenses.
Read about the risk-return relationship so that you are comfortable with your level of risk tolerance. Take some time to understand the different investment products and the pros and cons of each. Perhaps take the Investor Knowledge quiz to figure out if there are areas where you would like to learn more.
If you need help deciding what to invest in, speak to a registered financial advisor for advice about the options that work best for your retirement years.
Brandon C.
There are a number of benefits to saving in a Registered Retirement Savings Plan (RRSP). For example:
There are other benefits which you can read about in 5 reasons to open an RRSP.
You may also be interested in learning about Tax-Free Savings Accounts (TFSAs) and the difference between TFSAs and RRSPs so that you can decide what type of plan suits your investment needs. Here is information about TFSA basics.
Speak to a registered financial advisor or tax professional for advice about the options that work best for your investment plan.
Marg H.
Thank you for your question, Marg.
All withdrawals from a Registered Retirement Income Fund (RRIF) are fully taxable. Also, once the RRIF is set up, you can’t make any more contributions to the plan. Therefore, you would not be able to replace the withdrawal in the same plan a month later.
The federal government sets the minimum amount you must take out of your RRIF every year, based on a percentage of the value of your RRIF. There is no maximum withdrawal limit. However, if you take out more than the minimum amount, you’ll also pay withholding tax on the excess amount. Your financial institution will hold back an amount, based on withholding tax rates, and pay it directly to the government on your behalf. Here is more information about how RRIFs work.
Speak to a financial advisor or tax professional if you need advice or assistance with understanding the tax consequences of RRIF withdrawals, and your options when making withdrawals from this type of account.
Matthew
Day trading means buying and selling investments – like stocks – within the same day. A day trader may base their decisions on financial analysis or speculation. It’s often high-risk and there’s no guarantee that you will make money.
There are many ways to invest. Generally, investing in the stock market for the long-term has been historically beneficial. This is because while share prices typically fluctuate up and down in the short-term, and sometimes by large amounts, the market has historically always recovered and trended upwards. By investing for the long-term, you are more likely to be able to weather “dips” in the market. Check out this Interactive Investing Chart to see how investments grow over time.
Before deciding which form of investing is right for you, take a moment to understand the risk of stocks and the risk-return relationship. You may also be interested to find out more about diversification, fees for buying and selling stock and making an investment plan.
If you need assistance understanding the different ways to invest and what suits your needs, speak to a registered financial advisor.
Betty M.
There are different ways to name a beneficiary for mutual funds and you should speak to the financial institution or registered investment firm where your account is held, and also speak to an estate lawyer so that you fully understand the best options for your estate.
If your mutual funds are held in a registered account, such as a Registered Retirement Savings Account (RRSP) or Registered Retirement Income Fund (RRIF), one option is to name your spouse as the “successor annuitant” on your RRSP or RRIF. If this is done the successor annuitant will take over the accounts and won’t have to make any changes to investments or incur any fees. If they are not named as “successor annuitant”, the accounts will be collapsed and investments sold. There may be some disadvantages to your spouse. Read more about RRSP annuitants from CRA.
If your mutual funds are in a non-registered account your options may be different and you should speak to the financial institution or registered financial advisor where your account is held for instructions on how to name a beneficiary. As mentioned above, you may wish to speak to an estate lawyer about these options so that you fully understand them.
Read more about reducing your estate costs.
Braulino S.
The federal and provincial governments provide tax benefits in a number of ways. Here are examples of ways in which individuals can take advantage of government tax benefits:
The list above is not exhaustive. Speak to tax professional about the various government tax benefits or contact the Canada Revenue Agency for more information.
Bry
Yes, Registered Retirement Savings Plans (RRSPs) can hold stocks. Equities (both Canadian and foreign stocks) are typically considered qualified investments that can be held in an RRSP. An RRSP is a type of account, registered with the federal government, which can be used to save for retirement. RRSPs have special tax advantages.
Speak to your registered financial advisor to find out if your old RRSP account is active and whether you have contribution room in your RRSP. Your advisor can also help you figure out which stocks work best for your investment plan.
Warren
Transferring from a Registered Retirement Savings Plan (RRSP) to a Registered Education Savings Plan (RESP) will typically have tax consequences. It is possible in certain circumstances to transfer from an RESP to an RRSP. Find out more about RRSP transfers and what happens if your child doesn’t continue their education.
Learn more about RESPs.
Speak to a registered financial advisor or tax professional for advice about the options that work best for your investment plan. Canada Revenue Agency also provides information about RRSPs and RESPs.
Michael W.
Thank you for your question, Michael.
The federal government sets out the rules for qualified investments for registered accounts such as Registered Retirement Income Funds (RRIFs). The rules that apply to self-directed RRIFs are generally the same as those for Registered Retirement Savings Plans (RRSPs). For more information about eligible investments, go to the Canada Revenue Agency’s information for self-directed RRSPs.
Learn more about inverse exchange-traded funds (ETFs) in this article about Speciality ETFs.
Speak to a registered financial advisor for advice about your options for investments in your RRIF.
John B.
A Registered Retirement Income Fund (RRIF) is an account registered with the federal government that provides a steady income in retirement. A RRIF is opened by transferring money from a Registered Retirement Savings Plan (RRSP). Transfers from other registered accounts such as pension plans are allowed in certain circumstances. However, funds are not transferred from a non-registered savings plan to a RRIF. Find out more about how RRIFs work.
Because contributions to an RRSP are made with pre-tax dollars, and is not taxed as long as it stays in the RRSP, you pay tax when you withdraw from the RRSP. If the RRSP was transferred to a RRIF, the tax is deferred until you make your withdrawals from your RRIF. All withdrawals from a RRIF are fully taxable.
Speak to a registered financial advisor or tax professional for more information about tax considerations relating to your RRIF.
Peter N.
Thank you for your question, Peter.
Bonds do not typically come with voting rights. When you buy a bond, you’re lending your money to a company or government for a set period of time (the term). There are bonds called “convertible bonds”, which may come with the right to purchase common shares under certain conditions. Those common shares may come with voting rights.
A voting right, is usually attached to common shares, or equity, in a company, and is the right of the shareholder to vote on matters such as electing directors and corporate actions such as issuing securities.
Learn more about how bonds work and types of bonds.
Speak to a registered financial advisor for advice about stocks and bonds.
Bernice
Thanks for your question, Bernice. We are not able to provide individual investing advice. The following information may help you make an informed decision.
Segregated funds are an investment product sold by life insurance companies. Unlike mutual funds, segregated funds provide a guarantee to protect part of the money you invest (75% to 100%). However, you have to hold your investment for a certain length of time (usually 10 years) to benefit from the guarantee. You pay an additional fee for this insurance protection. Learn more about segregated funds.
Speak to a registered financial advisor or licensed insurance agent for advice about the options that work best for your investment plan.
Ishmael
Before you invest in a company, make sure you do your research. It is important that you understand the company’s business and its products or services. There is no guarantee, as there is always some level of risk with investing, but here are some things to consider so that you can be as comfortable as possible with your choices:
A public company’s financial statements, prospectus and MD&A are filed on the System for Electronic Document Analysis & Retrieval (SEDAR) at www.sedar.com. Learn more about where to get information on a company before you invest.
If you need help assessing the potential value of different companies and whether they are good options for your investment plan, speak to a registered financial advisor.
Marta
A Registered Retirement Savings Plan (RRSP) is an account, registered with the federal government, that you can use to save for retirement. They have special tax advantages. Investments that can be held in an RRSP are called qualified investments. Qualified investments are described on the federal government’s website. Syndicated mortgages are not listed as qualified investments.
Our resource GetSmarterAboutRealEstate.ca provides details on what syndicated mortgages are, how they work and the risks associated with them. In particular, Investing in Real Estate states that “Syndicated mortgages are not insured by the Government of Ontario or any other investor protection fund, meaning there is no way to guarantee you will get your money back.”
Learn more about syndicated mortgages and other real estate investments in Understanding real estate investments.
All investments carry a certain amount of risk. Before deciding if any particular investment product is a good choice for you, create your investment plan and understand the relationship between risk and return. Speak to a registered financial advisor for advice about the options that are best for your investment plan.
Christine B.
Thank you for your question, Christine. Interest, dividends, or capital gains earned on investments in a Tax-Free Savings Account (TFSA) are typically not taxable either while held in the account or when withdrawn. There are certain circumstances under which taxes may be payable with respect to a TFSA, and these circumstances are described on the Canada Revenue Agency website.
Keep in mind that taking money out of a TFSA can affect your TFSA contribution room for the year. Here is information about TFSA basics.
Speak to a registered financial advisor, tax professional, or contact Canada Revenue Agency directly, for specific advice about what you need to report for your income tax return.
Joel
If you were named as the beneficiary, you can inherit the Registered Retirement Income Fund (RRIF) tax free. If you were named as the “successor annuitant”, you can take over the RRIF and automatically start receiving payments from it after your wife’s passing. The rules relating to being a “successor annuitant” are described in this article.
Speak to a registered financial advisor, tax professional or estates lawyer for advice about the best options for you, and find out more about making withdrawals from your RRIF..
Tony E.
If the company is a public company in Canada, disclosure documents are filed on the System for Document Analysis and Retrieval (SEDAR) at www.sedar.com. Information about principals in the company can be found in the disclosure documents on SEDAR (for example, the Management Discussion and Analysis will include information about compensation of executive officers and directors). Here is an article on where to get information on a company. There is also information on the OSC website about disclosure rules for public companies in Canada.
If the company is not a public company, you can ask the company directly for this information. If they are incorporated in Ontario, you can also check with the Ministry of Government and Consumer Services, for more details.
If you have more questions, contact the OSC Inquiries and Contact Centre.
Alison F.
HST does not get charged on trades (investments). It does get charged on portfolio advisory fees, since this is considered a service. Review your client account agreement with the registered advisor or firm where your account is held, for details about taxes charged on advisory fees.
You can also read Investment Performance and the Cost of Advice to help you understand your account statements.
Dan K.
Thank you for your question to Re: Investing, Dan. We are not able to provide advice about specific products or companies.
You can go to resources such as Globefund or Morningstar to find out which exchange trade funds (ETFs) use “smart beta” (ETFs that use alternative index construction rules instead of the typical cap-weighted index strategy, in a transparent way) and you may also be able to use these resources to determine who are the largest sellers of ETFs in Canada. Our article about how to monitor ETF performance provides links to Globefund and Morningstar.
Learn more about the risks of ETFs and ETF Facts on our website. You may also find a registered financial advisor helpful in answering your questions about ETFs.
Tina
Thank you for your question to Re:Investing!
You can open a Registered Retirement Savings Plan (RRSP) at any age as long as you have earned income and file a tax return. Here’s how RRSPs work.
Learn more about RRSPs and retirement planning.
Sam
Thank you for your question Sam. We are not able to provide advice, but the information provided below can help you make an informed decision.
A withdrawal from a Registered Retirement Savings Plan (RRSP) is counted toward your income for the year and must be reported at tax time for that year. There is a withholding tax on the total amount of the withdrawal. The amount of the withholding tax depends on how much you withdraw. Learn more about making RRSP withdrawals before you retire.
You may also be interested in learning about Registered Retirement Income Funds (RRIFs). You won’t pay any tax on investment earnings when you convert your RRSP to a RRIF. Your money will continue to grow tax free as long as it stays in the RRIF. You only pay tax on the withdrawals you make. Learn more about how RRIFs work. Annuities are another option for creating retirement income.
Speak to a registered financial advisor or tax professional about your options and to decide what is right for you.
Catherine
Thank you for your question Catherine.
The Home Buyers’ Plan (HBP) is a federal government program that allows you to borrow up to $25,000 from your Registered Retirement Savings Plan (RRSP) tax free to fund your purchase. The money must have been in your RRSP for at last 90 days. In order to qualify, you must not have lived in a home owned by you or your spouse in the last 5 years. You must have entered into a written agreement to buy or build a home that you intend to occupy as your principal residence. This article provides information about government help for first-time home buyers.
The Canada Revenue Agency provides detailed information about the HBP. Speak to a registered financial advisor or tax professional for more information about the HBP and your options.
Cindy
Thank you for your question Cindy. The answer to your question depends on a number of factors.
There is information on our website on our website on how mutual funds work and also about how mutual funds are taxed:
You may also find useful information in this article about investors and tax.
Speak to a registered financial advisor or tax professional for more information about tax considerations with mutual fund investments.
Cindy
Thank you for your question Cindy. We are not able to provide financial advice, but hope the resources below will provide helpful information about your question.
Both Canada Pension Plan (CPP) and Old Age Security (OAS) are retirement benefits offered by the federal government.
CPP payments are based on what you paid into the plan. OAS depends on your other income and how long you’ve lived in Canada. In order to determine if capital gains received from your mutual funds would affect your OAS, review information on the federal government’s website. Read our article about government benefits to learn more. Note that you must apply for these benefits, as you do not receive them automatically.
Speak to a registered financial advisor or tax professional for more information about how redeeming mutual funds may affect your government benefits.
Kim
Thank you for submitting your question to Re: Investing!
Compounding interest will vary depending on the investments you hold. Find out more about growing your savings with compound interest and the effect of compounding interest by using our calculator.
Speak to your registered advisor to find out what the expected returns are on your investments and how to calculate compounding interest.
Will B.
Coinbase is not currently regulated by the OSC. We cannot provide advice about their legitimacy. Here is general information about cryptocurrency trading platforms that may help you with your decision:
– Cryptocurrency trading platforms operate around the world, often with little regulation or oversight. Because of this, a platform user may be left with few remedies if they lose money on a particular platform as a result of a cryptocurrency transaction. The price of cryptocurrencies can be volatile and the cryptocurrency trading platforms can be vulnerable to cyberattack. You should be aware of these risks before using a cryptocurrency trading platform.
– Ensure you read the terms and conditions associated with any cryptocurrency trading platform. These terms may not be drafted in the best interest of the user. For example, there may be limits on your ability to exchange cryptocurrencies for Canadian dollars.
– It is hard to verify the information provided about the company through online forums. For example, there may be positive reviews drafted by employees, or other people paid by the service provider.
It is important to speak to a registered financial advisor, if you have any questions about cryptocurrencies. Learn about cryptocurrencies on our website. The OSC’s Inquiries and Contact Centre is also available to answer your questions.
Tony C.
Thank you for your question to Re:Investing!
Once you understand the type of service you require, you can shop around to compare fees.
These articles may help you make an informed decision about the type of advice you require:
When you pay a fee, you’re paying for the various services that your firm provides, which can be different depending on your firm or the type of account that you have.
Find out more about and visit Investment Performance and the Cost of Advice to help you understand how fees may affect investment performance. Make sure you check registration of the financial advisor you are considering using, before making an investment decision.
Matt
Thank you for your question Matt.
We are not able to provide investment advice, however, the resources provided below can help you make an informed choice.
Our resource GetSmarterAboutRealEstate.ca provides details on what mortgage investment entities (MIEs) are, how they work and the risks associated with them. Learn more about MIEs and other real estate investments in Investing in Real Estate.
Before deciding if any particular product is a good investment choice, create your investment plan and understand the relationship between risk and return.
Speak to a registered financial advisor for advice about the investments that are best for you.
Anonymous
A Ponzi scheme typically recruits investors through ads and emails that promise high returns by joining a special group of investors. Often there is pressure to get in on the scheme quickly. Investors may see returns fairly early but those returns are paid from investors’ own money and money from new investors. The investment does not exist. When new people stop joining the scheme, there will be no money to pay you out and you lose the money you invested. The promoters vanish taking all the money with them. Read more about Ponzi schemes and other common investment scams.
One way to prevent being the victim of a Ponzi scheme is to make sure you check registration of the promoters before making an investment. Learn about 4 signs of investment fraud, how you might be approached and 4 ways to avoid investment scams.
If you feel you have been a victim of an investment scam, contact the OSC Inquiries & Contact Centre for more information.
Anonymous
Thank you for contacting Re:Investing! It is great that you are taking steps to find out more about this individual before making an investment.
Before making an investment decision, you should check their registration at CheckBeforeYouInvest.ca.
Since you mentioned that this investing opportunity was being offered to your community group, you may find information in this article about affinity fraud helpful. This is a form of investment fraud in which fraudsters approach potential victims through a group or community organization they belong to and whose trust they have gained.
One of the 4 signs of fraud is offering a big return for little risk. Here are 4 ways to avoid investment scams.
You can also contact the OSC Inquiries & Contact Centre for more information.
Anonymous
Thank you for your inquiry Re:Investing.
There are various ways to invest in real estate related investments that may involve securities, including, for example:
The first three types of investments listed above are regulated by the Ontario Securities Commission. Syndicated mortgages are regulated by the Financial Services Commission of Ontario.
The differences between these investments, and how they are regulated, are described in this article: https://www.getsmarteraboutmoney.ca/investing-in-real-estate/
I encourage you to review this document. If you have any follow-up questions, you are welcome to contact us again. You can also contact the OSC Inquiries & Contact Centre for more information.
Anonymous
Thank you for your question to Re:Investing! It is great that you are taking the steps to find out more about a company you are planning on making an investment with. We are not able to confirm whether a company is legitimate, however, we can provide you with information to help you make an informed decision.
Before making an investing decision, you should make sure you check registration of the person or company offering the investment at CheckBeforeYouInvest.ca. Also, check if they are a public company and file disclosure documents on the System for Electronic Document Analysis & Retrieval (SEDAR) at www.sedar.com. Learn more about where to get information on a company.
Learn about:
You can also contact the OSC Inquiries & Contact Centre for more information.
Anonymous
Companies engaging in the business of forex trading (if the investments are securities) are required to be registered as investment dealers. Investment dealers are required to be members of the Investment Industry Regulatory Organization of Canada (IIROC).
You may wish to review the list of Member Dealers on IIROC’s website (www.iiroc.ca) and contact some of the dealers listed to see if they trade in forex. The list of Member Dealers is available at: http://www.iiroc.ca/industry/Pages/Dealers-We-Regulate.aspx.
There is information on the Canadian Securities Administrators (CSA) website about risks of trading in forex.
You can also read about fraudulent forex schemes and other common investment scams in this article.
You can also contact the OSC Inquiries & Contact Centre for more information.
Anonymous
Thank you for contacting Re:Investing!
If a company is public in Canada, they are required to provide certain disclosure documents on the System for Electronic Document Analysis & Retrieval (SEDAR) at www.sedar.com. Learn more about where to get information on a company.
If you are concerned about the investment, learn the 4 warning signs of fraud.
If the company is not public, speak to a lawyer to find out what information they are required to provide to you. You can also contact the OSC Inquiries & Contact Centre for more information.
Anne H.
Thank you for your question to Re:Investing. Diversification is a way to try to reduce the risk of your portfolio by choosing a mix of investments. The key to diversification is to not put everyone in one investment. Your overall investment portfolio should match your risk tolerance, but each investment may have different characteristics, to minimize overall risk.
Mutual funds can provide built-in diversification. Here are four reasons investors may decide to choose mutual funds. Guaranteed investment certificates (GICs) are considered one of the safest ways to invest and often form part of an investor’s portfolio. Learn more about GIC basics and risks of GICs.
We are not able to provide specific advice about your personal investments. In order to help you make informed investment decisions, we are providing unbiased resources and information.
Speak to a registered financial advisor or tax professional for advice about the options that work best for your investment plan.
Byran
If you use your RRSP savings to buy an annuity directly you do not pay tax at the time of buying the annuity. You would pay tax on the income received from the annuity. Find out more about getting retirement income from your RRSP, how annuities work and what happens when you withdraw from your RRSP before you retire.
Speak to a registered financial advisor or tax professional for advice about the options that work best for your retirement plan.
Thomas G.
Thank you for your question Thomas.
When you withdraw from your Registered Retirement Savings Plan (RRSP), your financial institution will hold back the tax on the amount you take out and pay it directly to the government on your behalf. There are a couple exceptions, including the Home Buyer’s Plan and the Lifelong Learning Plan. You have to report the amount you take out on your tax return as income. At that time, you may have to pay more tax on the money — on top of the withholding tax. It depends on your total income and tax situation. Learn more about the rules and consequences of taking money out of your RRSP.
You can speak to a registered financial advisor or tax professional for advice.
Dave R.
Thank you for your question to Re:Investing.
You can’t transfer money from your Registered Retirement Savings Plan (RRSP) to the RRSP of someone else. This includes transfers to a spousal RRSP. Doing so can have tax consequences.
Find out more about making RRSP withdrawals before you retire and spousal RRSPs.
Speak to a registered financial advisor or tax professional for advice about the best investing options for you.
John
Thanks for your question John.
We are not able to provide advice, but the following information may be helpful.
The minimum Registered Retirement Income Fund (RRIF) withdrawals set by the federal government are based on the age you are on January 1st of the applicable year. This article describes how the amounts are calculated. It also describes the tax implications if you take more than the minimum amount.
Speak to a registered financial advisor or tax professional to confirm what happens when you have more than one RRIF account.
Bonnie K.
Thanks for your question Bonnie.
You open a Registered Retirement Income Fund (RRIF):
A registered financial advisor can help you with the steps involved in this process.
Learn more about RRIFs. You may also be interested in reading about getting retirement income from your RRSP.
Miles H.
If you are under 71, and have both a Registered Retirement Savings Plan (RRSP) and a Registered Retirement Income Fund (RRIF), you will pay tax on the withdrawals from the RRSP and separate taxes excess amounts over the minimum withdrawals from your RRIF.
The current tax rates on RRSP withdrawals are between 10% and 30% depending on how much you take out. Find out more about RRSP withdrawals.
You can open a RRIF anytime, but no later than the end of the year you turn 71. You have to start withdrawing money from your RRIF in the year after you open it, based on a percentage of the value of your RRIF. The percentages based on age are listed in this article about withdrawals from your RRIF.
Speak to your registered financial advisor or a tax professional to learn more about the tax implications of withdrawing from your RRSP and/or RRIF.
Shauna
As your question is unique to your situation, we recommend speaking to a registered financial advisor or tax professional. In terms of Registered Retirement Savings Plan (RRSPs) and Registered Retirement Income Fund (RRIFs), here is some information that may help:
RRIFs:
RRSPs:
Mike
Typically, you can select the investments in your locked-in retirement account (LIRA), but there may be some restrictions. A LIRA is an account that holds money moved out of a pension plan. You may use one if you are changing companies and can take your pension savings with you. It works like a Registered Retirement Savings Plan (RRSP), but your money is locked in. You cannot withdraw the funds until you retire.
Be careful if people are contacting you to withdraw money from a LIRA. This is a common type of pension scam which you can read more about in this article.
If you are moving money from a defined contribution pension plan, learn more about options when leaving a defined contribution pension plan before retirement.
You should speak to your registered financial advisor to find out more about options for a LIRA.
Jonathan
You can purchase stock from a registered investment firm or through a registered financial advisor. This article on how to buy and sell stocks will provide you with a starting point on how to invest in stocks. Make sure you have a plan and understand risk.
Before you purchase cryptocurrencies, read our article on cryptocurrency basics and make sure you understand how they work and the risks associated with them. Some cryptocurrencies may be subject to securities regulation. You can also learn about cryptocurrency offerings such as initial token offerings.
If you go to an advisor, make sure they are registered. You can contact the OSC Inquiries and Contact Centre as they are available to answer your questions about finding a registered financial advisor and also about securities regulation of cryptocurrencies.
Alyssa
It is possible to withdraw money from a Tax-Free Savings Account (TFSA) and then make contributions to a Registered Retirement Savings Plan (RRSP). Before you do, make sure you understand the process and any tax implications.
You can take money out of your TFSA at any time, without paying tax on the withdrawal. Taking money out can affect your TFSA contribution room for the year. Make sure you understand how transfers work. If you are withdrawing investments, such as stocks or bonds, you’ll pay 100% tax on any gains made by swapping investments between your TFSA and a registered account. Here is information about TFSA basics.
There are limits on how much you contribute each year to your own RRSP and your spouse’s RRSP. Your total contribution room for the year is the lower of: 18% of your earned income for the previous year, OR the maximum contribution amount for the current tax year: $26,010 for 2017. Find out more about RRSP contributions. If you decide to open an RRSP, make sure you understand what happens when you withdraw from your RRSP before you retire.
Speak to a registered financial advisor or tax professional for advice about the options that work best for your investment plan.
Doug
We cannot tell you which is the right option for you but we can provide information to help you make your choice.
A direct investing account, or discount broker account, is provided by a registered investment dealer firm, and usually does not provide an advisor to help you choose your investments.
In order to use a direct investing account effectively, you must have a good idea about your personal investing plan. You should have time to monitor and manage your investments and research your investments regularly. If you are purchasing mutual funds, understand how Fund Facts work and also how fees and compensation affect your investments.
If you are not sure whether you will be able to manage your investments regularly and effectively, you may wish to work with an advisor. Here are 3 reasons to work with an advisor. If you decide to use an advisor, understand what to expect. Before you work with an advisor, visit CheckBeforeYouInvest.ca to learn how to check their registration.
L
You can open a Registered Retirement Income Fund (RRIF) anytime, but no later than the end of the year you turn 71. You must take out a minimum amount from your RRIF each year. This amount increases as you get older. There is no maximum withdrawal limit. Here is more information about how RRIFs work and making withdrawals from your RRIF.
Speak to your financial advisor to find out the best options for you.
Tyla F.
All investments held in non-registered accounts are subject to tax, but not all investment income is taxed in the same way or at the same rates. Depending on where you hold your bond, e.g. in a registered account like an RRSP or TFSA, the tax you pay may vary. Learn more about bonds and how to buy and sell bonds.
We are not able to provide financial advice. Speak to a registered financial advisor or tax professional for more information what happens when you sell a bond.
Susan M.
We cannot provide investment advice, such as where to invest, or specific products to choose, as every individual’s investing needs/goals are different. We can provide you with unbiased resources and information to help you make an informed investing decision.
Generally, the higher the potential return of an investment, the higher the risk. Before deciding which investments are best for you, make a plan and understand the risk-return relationship. Your asset mix will largely determine the risk and expected return of your portfolio. Here is a table that explains risk/return by asset.
As an example of a way you can compare returns, using mutual funds as an example, look at the mutual fund’s Fund Facts to help you understand their performance history and risk rating and costs associated with owning it.
Speak to a registered financial advisor to help you choose the best investments for your investing needs.
Aditya
Both Registered Retirement Savings Plans (RRSP) and Tax-Free Savings Accounts (TFSA) offer tax advantages to help you reach your savings goals. The main differences are:
Non-registered investment accounts have no special “tax status”. All investments held in non-registered accounts are subject to tax. Find out more about investors and tax. Speak to your registered financial advisor or tax professional about your options.
Rob C.
Thank you for your question to Re:Investing!
To change your withdrawal preference from yearly to monthly you can speak with your registered financial advisor or firm where you have your Registered Retirement Income Fund (RRIF).
Learn more about making withdrawals from your RRIF.
Sujata B.
You can set up multiple Tax-Free Savings Accounts (TFSA), but you cannot contribute more than your annual contribution limit to all of them combined.
The maximum annual contribution limit for 2018 is $5,500. If you have not contributed the maximum in past years, or have made withdrawals in previous years, you may have additional contribution room available. Generally, your TFSA contribution room is made up of the TFSA dollar limit for the year, any unused TFSA contribution room from the previous years, and any withdrawals made from the TFSA in the previous year. You can check your contribution room through the Canada Revenue Agency’s My Account service.
You can also read about making transfers between TFSAs in this article about TFSA basics.
Also, you can learn5 more about contribution rules through the CRA website.
You may also want to speak to a tax professional about your options for TFSA account contributions.
Anonymous
A pension plan, can provide a steady income after you retire – either by paying a fixed amount for life or helping you save money while you are working. There are government, employer and individual pension plans. The Canada Pension Plan (CPP) or Quebec Pension Plan (QPP) gives a monthly income starting as early as your 60th birthday. There are two main types of employer pension plans:
1. Defined benefit (DB) plan
– Pays a certain amount of retirement income for life which is based on a formula that includes your earnings and years of service with your employer
– Typically, both you and your employer contribute. Your employer is responsible for investing the contributions to ensure there’s enough money to pay the future pensions of all plan members.
2. Defined contribution plan
– Contributions are guaranteed, but retirement income is not. Usually, both you and your employer contribute to the plan. Your employer may match some contributions you make
– You are responsible for directing investing all contributions to grow your savings. In this way, it is similar to a Registered Retirement Savings Plan (RRSP) and retirement funds depend on total contributions and returns on investments.
Find out more about pensions and ways you can plan for retirement.
M
Firms must provide you with account statements on a quarterly basis. Talk to your registered advisor to see if they will send you statements on a monthly basis, on request. Learn more about investment performance and the cost of advice.
Ruby
Cryptocurrencies are digital currencies that are not issued or backed by a central bank or monetary authority and in many cases, have not been subject to traditional financial sector regulations. Cryptocurrencies are risky, because they are volatile, lack oversight, and are vulnerable to hacking. Some fraudsters have tried to capitalize on market interest in cryptocurrencies by creating new scams or rebranding existing scams.
There are businesses looking to raise money by issuing coins or tokens offerings known as initial coin offerings (ICOs) or initial token offerings (ITOs). ICOs and ITOs may be subject to securities regulation. Learn more about cryptocurrency offerings.
Before you consider purchasing a cryptocurrency, make sure you understand how they work and the risks involved. To learn more about cryptocurrency visit GetSmarterAboutMoney.ca or contact the OSC’s Inquiries and Contact Centre.
Charlie
When you enter a name in the CSA National Registration Search, the initial listing will show you results for all individuals with the name “Robert Smith”. Some listings may also include a middle name.
You can confirm if it is the same Robert Smith a number of ways. Individual listings for each “Robert Smith” will provide information on other or previous names of the individual, the name and address of the firm they work for, the province(s) they are registered in, and the registration categories they fall under. Another option is to contact the OSC Inquiries and Contact Centre at 1-877-785-1555 to see if there is public information available to match the individual.
Jack
The OSC has information available on proceedings against individuals and companies suspected of violating securities law or acting contrary to the public interest. You can review OSC Proceedings if you are looking for specific individuals and companies.
You can also find information about individuals and companies that engage in actions that may pose a risk to investors on our Investor Alerts & Warnings page or by subscribing to our Investor News.
Gerry S.
Thank you for your question to Re: Investing!
Trailing fees are not tax deductible. CRA’s website outlines amounts you can deduct from your personal income tax return. Management fees on mutual fund investments, such as “trailing fees” are not listed on CRA’s website as tax deductible.
We are not able to provide financial advice. Go to CRA to find out more or speak to a tax professional to find out more about what you are able to claim as deductions on your personal tax return.
Richard M.
It is possible to transfer investments directly to a non-registered account or TFSA (if you have contribution room). This is known as an “in kind” withdrawal.
As there might be tax consequences to the “in kind” withdrawal, we recommend speaking to a registered financial advisor or tax professional for more information about your personal investing options.
Ken
A representative at a bank, trust company, or registered investment firm can help you set up and move stocks into a Tax-Free Savings Account (TFSA). The TFSA would be held at that financial institution or investment firm. You would remain the holder of the stocks if you transfer them to a TFSA held in your name.
There are some tax considerations if you’re thinking of moving stocks to a TFSA. Speak to a registered financial advisor or tax professional to learn more about this type of transfer.
Morton F.
A spouse or common-law partner can be named as successor annuitant to an RRSP or RRIF.
Find out more about RRSP annuitants from the CRA.
Speak to your registered financial advisor or tax professional for more information about RRSPs and beneficiaries.
Mike H.
Thanks for your question Mike. There is no set guideline for what a MER of a mutual fund should be in comparison to the performance of that fund. Before you buy a mutual fund, read its Fund Facts. This is the document provided to you when you purchase a mutual fund and it outlines the MER that will be paid on that fund. Also, consider all costs associated with a mutual fund.
You can use this mutual fund fee calculator to help you compare funds and also review the 5 questions to ask yourself before you buy.
Speak to your registered financial advisor for more information about fees.
Learn more about mutual fund fees and CRM2 reporting of fees on GetSmarterAboutMoney.ca.
Wendy S.
Yes. If you do not contribute one year, you can carry forward your RRSP contribution room and use it the next year, or in the future. Here is more information about How RRSPs work.
You can login to your CRA account to find out your contribution room.
Rosalee M.
If you are withdrawing funds from an RRSP, you will pay tax immediately on withdrawal, and possibly more when you file your income tax return.
For example, if you take out $20,000 from your RRSP this year, after the 30% withholding ($6,000) is applied, you end up with $14,000. You will have to report this amount on your tax return as income. You may have to pay more tax on your income depending on your tax brackets.
Here is more information about the amount you pay with a RRSP withdrawal and a link to the information on the CRA’s website.
If you transfer between RRSPs, tax will not be withheld.
Speak to your registered financial advisor or a tax professional about the tax consequences of RRSP withdrawals.
Paul W.
Thanks for your question Paul. A Registered Retirement Savings Plan (RRSP) is usually used to save for retirement. A Registered Retirement Income Fund (RRIF) is used to withdraw money from as retirement income.
Some key points about RRSPs:
Learn more about How RRSPs work.
Some key points about RRIFs:
Learn more about RRIFs.
Mary W.
You have to start withdrawing money from your RRIF in the year after you open it. If you open a RRIF account the year you turn 71, you do not need to make a withdrawal in the first year. If the RRIF account was opened prior to the year you turned 71, you must take out the minimum in that calendar year (between January 1 and December 31). The minimum RRIF withdrawals, which are set by the federal government, are based on the age you are on January 1 of the year. Learn more about making withdrawals from your RRIF.
Mary
Thank you for your question, Mary. While we try to provide as much information as possible, we cannot provide specific advice such as how much to invest in any particular investment and/or recommend specific companies.
We have developed a resource for investors to better understand investing in real estate which also details REITs, how they work and potential risks associated with them. You may want to review the resource and speak to a registered financial advisor before making an investing decision as all investments come with their share of risks.
Brian G.
Thanks for your question Brian. The right amount to invest in an RRSP varies for each individual based on their financial plan. To start, read How much you need to save for retirement to learn about such factors as: age, lifestyle, federal government benefits. It is also useful to know how to choose your asset mix.
Find out how much contribution room you have available. Your contribution room for the year is the lower of:
You may wish to speak to a registered financial advisor for more information and to have a financial plan that meets your individual scenario.
Learn more about creating your plan and RRSPs.
Verna
You can receive monthly Canada Pension Plan (CPP) payments starting as early as your 60th birthday. What you get depends on what you paid into the plan while you were working. You must be 59 or older and apply 9 months before you retire.
The decision of when to start receiving CPP payments – and what to do with those payments – depends on many individual factors. Learn more about CPP from the Government of Canada.
Toby
Adjusted cost base (ACB) represents the amount you paid for an investment plus any additional costs, such as fees and commissions.
If you have an account with a registered financial advisor you will be able to obtain information about fees and commissions on your account statements. Learn more about charges and other compensation.
Sue M.
When you open a Registered Retirement Income Fund (RRIF) your application form or RRIF contract may outline how monthly withdrawals will be made. If you do not have a copy of the application form or contract, speak to the compliance department of the institution or registered firm where you opened your RRIF. They should be able to provide you with a copy and answer your questions.
Fees and commissions you may pay will depend on the types of products you have in your RRIF. You should have disclosure about these fees and commissions from when you made your initial purchases. You can also speak to the institution or registered firm where your account is held, if you do not know where to find this disclosure.
Learn more about opening a RRIF and RRIF withdrawals.
Steve
If you are selling the stock and leaving the proceeds inside your RRSP, you do not need to pay tax.
If you plan to withdraw the proceeds, you will pay a withholding tax. Your financial institution will hold back the tax on the amount you take out and pay it directly to the government. The amount depends on how much you take out and where you live. You also have to report the amount you take out on your tax return as income. At that time, you may have to pay more tax on the money — on top of the withholding tax. It depends on your total income and tax situation.
Learn more about making RRSP withdrawals before you retire and see the withholding tax rates. Speak to a registered financial advisor to learn more about making withdrawals from an RRSP.
Sheila B.
Regardless of whether a withdrawal is from a Registered Retirement Savings Plan (RRSP) or a Registered Retirement Income Fund (RRIF), the amount of the withdrawal is counted toward your income for the year and must be reported at tax time.
The difference may be in the withholding taxes. For RRSPs, there is a withholding tax on the total amount of the withdrawal. The amount of the withholding tax depends on how much you withdraw. Learn more about making RRSP withdrawals before you retire.
With a RRIF, you pay a withholding tax on the amount of the withdrawal above your minimum annual withdrawal. Learn more about making withdrawals from a RRIF.
Depending on your total annual income, you may pay additional tax at tax time in addition to the withholding tax. We are not able to provide advice such as whether you should convert your RRSP to a RRIF as this decision depends on many individual factors. Speak to a registered financial advisor or tax professional about your options and to decide what is right for you.
Roy T.
Registered dealers and advisors must provide an annual summary of all charges incurred in your RRSP account and all other fees received by the dealer or advisor that relate to your account. Read more about the Report on investment performance and the Report on charges and other compensation that you should be receiving detailing your fees.
If your RRSP includes mutual funds, you can learn more about mutual fund fees and use our mutual fund fee calculator.
Speak to your registered financial advisor to find out when you will get your annual account statement.
Robert
The annual contribution limit for 2018 is $5,500. Your personal limit may be different based on contribution room carried over.
Read more about TFSA basics.
Speak to a registered financial advisor or tax professional to find out what your personal 2018 TFSA contribution would be. You can also check with the CRA.
Red
Thanks for your question. There is no “maximum trailing fee”. Trailing fees or trailing commissions are paid out of the mutual fund’s management fee, so it is reflected in the fund’s Management Expense Ratio (MER). There is no set maximum for the MER of a mutual fund. The Fund Facts document provided to you when you purchase a mutual fund outline the MER that will be paid on that fund.
Speak to your registered financial advisor for more information about fees, and make sure you understand product fees before you make an investment.
Learn more about mutual fund fees on GetSmarterAboutMoney.ca.
Perry
The rules relating to RRSPs relate to the age of the account holder, not whether they are retired or not. You must close your RRSP in the year you turn 71. You can withdraw your RRSP savings in cash, convert to a RRIF or buy an annuity.
You can contribute the lower of:
Learn more about how RRSPs work.
Speak to a registered financial advisor or tax professional to learn more about your own retirement saving options.
Patricia
There is no one right investment plan for everyone. Typically, holding a mix of investments from 3 main asset classes – cash and cash equivalents, equities and fixed income investments – provides a fairly well-diversified portfolio. The right asset mix depends on many factors, including your age, tolerance for risk and when you need your money. Here are 7 questions to ask yourself before you invest.
Speak to a registered financial advisor for help putting together an asset mix that fits your investing personality.
Mathieu
While we try to provide as much information as possible, we are not able to provide specific investment advice.
When it comes to investing, having a mix of different investments can help reduce risk and protect your portfolio from losing value (or money) all at the same time, especially if there is a downturn in the markets. The right mix is different for each individual and situation, but it could include a variety of stocks, bonds, cash and other investments in different industries, countries or asset class. Check out some tips to be a smart investor.
It is also important to make sure the individuals and companies you are going to for investments and advice are qualified. Speak to a registered financial advisor to learn what mix of investments and investing strategy may be right for you.
Maria B.
It is good practice to meet with your advisor annually to review your information, progress and update your plan, if appropriate. When you open your account, you may have created an investment policy statement, which outlines the rules you want your advisor to follow for your portfolio. This statement would specify how your portfolio will be monitored, and when or why it should be rebalanced.
Check out What to expect from your advisor and Your first meeting with your advisor.
Kelly
Thank you for your question. Two previous Re: Investing questions may help you understand the difference between these two investments:
While we do our best to provide general information to help you get started, we are not able to provide advice. The type of investment that is right for you depends on many factors, including your financial needs, risk tolerance and overall personal financial situation. Speak to a registered financial advisor for advice related to choosing investments.
You can learn more about mutual funds and exchange-traded funds (ETFs) on GetSmarterAboutMoney.ca.
K
The federal government sets the minimum amount you must take out of your RRIF every year. You can open a RRIF anytime, but no later than the end of the year you turn 71. You have to start withdrawing money from the RRIF in the year after you open it. The minimum amount increases as you get older. For example, if you are 71 on January 1, the minimum amount is 5.28%. If you are 72 on January 1, the minimum amount is 5.40%. Learn more about RRIFs.
We are not able to provide financial advice. Speak to a registered financial advisor or tax professional to learn more about making withdrawals from a RRIF.
Holly L.
You can transfer investments, such as stocks or bonds, from a non-registered account to your RRSP. This is called a transfer “in kind”. You might do this if you don’t have the cash to make your contribution, but you have investments that you want to use instead.
This has tax consequences, however. You are considered to have sold your investments at their fair market value and will have to report any resulting gain on your tax return. You can claim an RRSP deduction equal to the fair market value of the investments transferred to your RRSP. If the fair market value results in a loss, in order to claim the loss on your tax return, you must first sell the investments and then contribute the cash proceeds to your RRSP.
Learn more about RRSP transfers and speak to a registered financial advisor.
Hank
It is an option to hold a mortgage in an RRSP. However, this method of investing should be considered carefully, on an individual basis, in order to consider the risks and benefits.
We are not able to provide advice. Speak to your registered financial advisor to consider the best options for you.
Learn more about self-directed RRSPs and investing in real estate.
Glynis P.
If you are considering changing investment companies, make sure you speak to both financial institutions about the costs, including service fees, before you transfer. Make sure the financial institution you are transferring your accounts to is registered. Learn more about how fees affect your investment.
Eva & Graham
There is more than one factor involved in determining what will save you money in the long run. It is important to look at the cost of fees, together with the potential value of the investment. These factors should be reviewed on an individual basis in consultation with your registered financial advisor.
Front-end load fees are paid at the time you buy your units or shares. This is a percentage of the amount you are investing in a fund. It is paid to the registered firm that sells you the fund. You can negotiate this fee with your advisor.
Deferred sales charges are paid at the time you sell your units or shares. You will pay less if you hold the fund longer.
For more detailed information about these fees, learn more about mutual fund fees on GetSmarterAboutMoney.ca.
Eric B.
When it comes to minimum RRIF withdrawal amounts, the minimum amount does increase as you get older. The percentage is based on your age on January 1 of the year you are making the withdrawal. For example the minimum amount for a 72 year old is 5.40%. The minimum for a 85 year old is 8.51%.
Learn more about making withdrawals from your RRIF.
Dean C.
The net asset value (NAV) of a mutual fund represents the mutual fund’s asset less its liabilities. NAV will fluctuate with changes in the market value of the mutual fund’s particular investments.
Typically, the NAV of a mutual fund will fall initially because a pay out of a distribution will lower the assets and cash in the mutual fund. This will be based on a valuation – typically outlined in the prospectus of the mutual fund on the System for Electronic Document Analysis and Retrieval (SEDAR). This does not mean the NAV will be lower indefinitely. There are other factors that affect calculation of NAV. You should review the NAV in the prospectus to understand how it is calculated. Learn more about mutual funds and NAV and where to get information about a prospectus on SEDAR.
Darrrell
While we do our best to provide general information, we cannot provide financial advice.
Guaranteed investment certificates (GICs) are considered banking products, rather than “securities”. You can learn more about GICs on GetSmarterAboutMoney.ca, including tips for choosing a GIC.
In order to make the decision for time period, speak to your registered financial advisor for more information about products that work best for your personal investment goal.
Dale
The Smith Manoeuvre is a complicated method that is meant to gradually restructure your mortgage into a tax-deductible investment loan.
While we try to provide general information, we are not able to provide advice. Complicated forms of investing typically carry increased risks and should be considered carefully with an investor’s registered financial advisor or tax professional. Learn more about investing in real estate and the risks associated with them.
Corinna
Thanks for your question. While we try to provide general information, we are not able to provide advice. You may find our article about “Converting your savings to income” helpful for your purposes.
Speak to a registered financial advisor for information about income investments, tailored to your individual needs.
Brian J.
Thanks for your question. Taking out the minimum withdrawal amount allowed does not dissolve a mutual fund in a Registered Retirement Income Fund (RRIF) account. Read more about how RRIFs work and making withdrawals from your RRIF.
We are not able to provide financial advice. Speak to a registered financial advisor or tax professional to learn more about making withdrawals from an RRIF.
Brian
You are not required to make a withdrawal from your Registered Retirement Income Fund (RRIF) until the year after you open it. However, you can make withdrawals in the year you open a RRIF. Learn more about RRIFs.
We are not able to provide advice. Speak to your registered financial advisor to learn more about making withdrawals from your RRIF, including withholding tax on withdrawals.
Bill R.
There are limits on contributions to a Tax-Free Savings Account (TFSA). The total contribution you have depends on factors including the year you first were able to contribute to a TFSA, and withdrawals you have made from your TFSA. Learn more about how TFSAs work.
Growth on your investments inside a TFSA does not affect your contribution room, and you can take money out when you want, for any reason, without paying any tax. If you take money out, you can re-contribute it the following year, in addition to the annual maximum. There are penalties for over-contributions. If you are not sure how much contribution room you have, contact the Canada Revenue Agency.
Benedicto G.
Contributions to a company pension plan do lower your available contribution to a Registered Retirement Savings Plan (RRSP). Learn more about plan participation and your RRSP.
While we try to provide general information, we are not able to provide advice. Types of pension plans and employer pension plan contributions vary. Speak to the plan administrator at your company for information about your pension plan.
Learn more about pension plans on GetSmarterAboutMoney.ca.
Ben R.
All mutual funds have fees and expenses that reduce your investment return. There are different types of fees and expenses. For example: sales charges, other transaction fees, account fees and fund expenses. When you mention “early trading fee”, you may be referring to “front-end load” or “initial sales charge”. Front-end load fees and “deferred sales charge” (also known as “back-end load”) are both types of sales charges.
Front-end load fees are paid at the time you buy your units or shares. This is a percentage of the amount you are investing in a fund. It is paid to the registered firm that sells you the fund. You can negotiate this fee with your advisor. Deferred sales charges are paid at the time you sell your units or shares. You will pay less if you hold the fund longer.
For more detailed information about these fees, read about mutual fund fees on GetSmarterAboutMoney.ca. Learn more about the Report on charges and other compensation. Speak to your registered financial advisor for information about fees specific to your investments.
Ben K.
As a first step to investing, you may want to review the following topics:
While we try to provide general information to help you get started, we are not able to provide investment advice. Speak to a registered financial advisor for information specific to your personal financial situation and savings goals.
Barbara
There are some considerations if you’re thinking of moving stocks to a Tax-Free Savings Account (TFSA). You may be able to make “in kind” contributions (for example, securities you hold in a non-registered account) to your TFSA, as long as the property is a qualified investment. In doing so, you may trigger a tax event. This type of “in kind” transfer is considered a disposition by the Canada Revenue Agency – meaning you may need to report a capital gain if the fair market value of the stock has gone up since you purchased it. If the stock value has gone down, you cannot claim the capital loss.
As tax rules are enforced by the Canada Revenue Agency (CRA), if you have questions about this type of transfer, you can contact the CRA. You can also speak to a registered financial advisor to learn more about this type of transfer.
Learn more about investors and tax.
Akhil A.
How to monitor mutual fund performance provides different ways you can compare mutual funds. One way is to review a mutual fund’s Fund Facts, which provides information about performance. Fund Facts can be used as a comparison tool between specific funds. Another option is using resources such as Globefund and Morningstar to see how a mutual fund is performing relative to other similar funds.
You can also use our Mutual fund fee calculator to compare specific funds.
Andrew
Estate administrative tax in Ontario is calculated based on the total value of the deceased’s assets at the time of death. You can learn more about the Ontario estate administrative tax from the Ministry of Finance.
We are not able to provide financial or legal advice. Speak to a tax professional or estate lawyer for advice related to the handling of an estate.
Curtis
Thanks for your question. Generally, you must have a specific password to redeem your bitcoin and you may wish to contact the entity where you purchased it to confirm the process. You can learn more about how cryptocurrencies work and the risks associated with them.
Bitcoin is not considered a security, and the Ontario Securities Commission (OSC) does not directly regulate bitcoin, nor does it oversee the redemption of bitcoin. We are not able to provide advice related to buying or selling investments.
Gary S.
While we do our best to provide general information to help you, we are not able to provide advice. In this case, we can’t tell you what type of investment would work best for you. This is based on personal information – including your income, tax considerations, savings and debts.
For many investors it may make sense to reduce overall investment risk in retirement; however this may not be right for everyone. A registered financial advisor can help you review your goals and savings strategy.
Chris
While we have provided general information about Bitcoin below, Bitcoin itself is not a security, and is not regulated by the Ontario Securities Commission (OSC). We encourage you to learn more by reading the information linked in the last paragraph below.
There are specific ATM machines that you can use to purchase Bitcoin and other cryptocurrencies. When you purchase bitcoins, generally your bitcoins will be deposited in your “virtual wallet”. If you do not have a virtual wallet, you may receive a printed receipt with a code. This receipt will be the only record you have of your bitcoin purchase – if you lose it there is no way to recover this code – so keep it in safe place and do not share it with others.
Some scammers have targeted individuals by asking them to deposit funds into these bitcoin ATMs. If you are asked to do this, contact the Ontario Securities Commission.
Keep in mind that there is limited use for bitcoins at this time. They are not considered legal tender, so, for example, you can’t use bitcoins in place of cash at a store.
Investors may be eager to get in on this new trend, but like any investment, make sure you understand how they work and the considerable risks that often accompany these investments before you make a decision to invest. Learn more about cryptocurrencies on GetSmarterAboutMoney.ca.
Doug D.
Taxes on exchange traded funds (ETFs) depend on many factors, including:
With ETFs, you’ll generally pay tax on:
You should not be affected by distributions that occurred before you purchased the ETF. However, before you make a purchase, speak to your registered financial advisor or tax professional to learn how taxes apply in your situation – based on where you are holding the ETF and the type of ETF you purchase. Learn more about how ETFs work.
M. W.
You will not be issued tax slips for mutual funds held inside a Tax-Free Savings Account (TFSA) like you are for mutual funds held in non-registered accounts, as all gains – whether interest, capital gains or dividends – are not taxable, even after they are withdrawn. Keep in mind capital losses within a TFSA cannot be used to offset capital gains outside of a TFSA.
Speak to your registered financial advisor or tax professionals to learn how taxes apply to your portfolio and registered savings accounts.
Tom
No, earnings on investments inside a Registered Retirement Savings Plan (RRSP) cannot be counted towards contributions. New RRSP contributions are tax-deductible, and the earnings on investments inside your RRSP are not taxed until you make a withdrawal. Learn more about RRSPs and making RRSP contributions.
While we try to provide general information to help you get started, we are not able to provide advice. Speak to a registered financial advisor or tax professional to learn about how your RRSP contributions.
Elizabeth
While you can make contributions to your Registered Retirement Savings Plan (RRSP) up to a certain deadline in the new year to count toward your previous years’ contributions, withdrawals do not work in the same way. Withdrawals made from January 1, 2018 would count toward your 2018 income.
You will receive a tax receipt for RRSP withdrawals made during the calendar year. The withdrawals are taxed as income in the calendar year you make the withdrawal.
Speak to a registered financial advisor or tax professional to learn about how your RRSP withdrawals will be taxed. Learn more about RRSPs.
Bruce S.
It is not possible to set up a Registered Retirement Savings Plan (RRSP) for someone else. Certain registered accounts can be set up by persons other than the beneficiary, such as a Registered Education Savings Plan (RESP).
If what you mean is that you were named as a beneficiary of your friend’s RRSP, the RRSP must be included for tax purposes as part of your friend’s estate – an RRSP can only pass along directly if the beneficiary named is a qualified beneficiary, in other words, a spouse, common-law partner or financial dependant. You may consider contacting the estate’s executor or speaking to an estate lawyer for more information.
Learn more about RRSPs and wills and estate planning.
Heidi
A family plan can have more than one beneficiary. But each beneficiary must be:
Nieces and nephews do not count as blood relatives under family plan rules. However, you are able to open an individual RESP for your nephews. Note that the Canada Education Savings Grant (CESG) and Canada Education Savings Bond (CESB) are based on the total contributions even if there are multiple RESPs, and not per plan. For example, if you set up an RESP and your brother sets up an RESP for the same child, both accounts cannot receive the maximum grant and bond.
Before you set up an RESP, make sure you understand the rules regarding contributions, government grant and bonds, and withdrawals. Learn more about RESPs.
V. S.
There is no maximum that you can withdraw from a Registered Retirement Income Fund (RRIF) in any given year, though there is a minimum amount that must be withdrawn based on your age.
There is no allowance for deferring reporting RRIF withdrawals as income for any reason, and the withdrawal is included as income in the calendar year it was withdrawn. Any withdrawals above the minimum amount will have a withholding tax taken immediately, and additional tax may be applied at tax time depending on your total income for the year. Learn more about making withdrawals from your RRIF.
While we are able to provide general information, we cannot provide advice related to the handling of your investments. Speak to a tax professional to see if you qualify to claim medical expenses and to confirm rules relating to withdrawal. Learn more from the Canada Revenue Agency.
Rui
The closing price of a share is the last price at which a share is traded on a particular day. This does not mean that you will pay this price for a share. What you pay is the share’s “ask price” – the lowest price at which someone is willing to sell one unit of the share – this may change throughout the trading day. Learn more about buying and selling shares.
When it comes to the number of shares you can buy, generally the only restriction is the number of shares available for sale – the share volume.
If you are planning to buy a large amount of one company’s share, make sure you have considered how the share fits in your overall portfolio, and consider how it changes your portfolio’s diversification. Speak to a registered financial advisor to help you answer questions about investment risk.
B and Pankaj G.
We are not able to provide any official values of what average fees are for investors. Fees depend on a number of factors including services provided, and total dollar value of a portfolio. We encourage investors to shop around and ask questions to understand the services offered and fees charged.
Note that service fees do not necessarily include fees such as management expense ratios on mutual funds and ETFs, and fees do not indicate whether your investments will do well.
You can learn about the new Report on Charges and Other Compensation and the Report on Investment Performance that investors receive on InvestmentReporting.ca.
AC
A Registered Disability Savings Plan (RDSP) allows people with disabilities and their families to save for their future. Government grants add to your savings and your investments grow tax-free.
To receive the Canada Disability Savings Grant and the Canada Disability Savings Bond (depending on income), you must apply through the financial institution where you have your RDSP. The application forms are available through Employment and Social Development Canada (ESDC).
Learn more about RDSPs.
Mashiur R.
While we do our best to provide general information to help you, we are not able to provide advice. In this case, we can’t tell you what type of investment would work best for you. This is based on personal information – including your income, tax considerations, savings and other debts. A registered financial advisor can help you review your goals and savings strategy.
A question you may ask first is whether it’s better to pay down your debt or invest. This is one that a lot of people have, and there are things to consider, for example, your risk tolerance. There are many types of risk to consider when investing, and some investments are generally riskier than others. For example, consider what would happen if you lose money on your investment – would you be comfortable with this risk? There is no one right answer for everyone and a registered financial advisor can help with reviewing your financial goals. Learn more about investment risk and risk tolerance.
Try our Pay Down Debt or Invest Calculator using different scenarios for the expected investment return as a first step.
John B.
A Tax-Free Savings Account (TFSA) allows you to take money out when you want, for any reason, without paying any tax. If you take money out, you can re-contribute it the following year, in addition to the annual maximum. You can check your contribution room through the Canada Revenue Agency using one of these services:
While we try to provide general information to help you get started, we are not able to provide advice. Speak to a registered financial advisor or tax professional to learn about investing in your TFSA. Learn more about TFSAs.
Anish
Regardless of where it comes from, it is illegal to withhold income from the Canada Revenue Agency (CRA), and income and gains on assets are taxable, whether they are in the form of dollars, gold, foreign currency or cryptocurrency. If you are not sent tax forms from the exchange or service you use to buy or and sell cryptocurrencies, you are still required to report this income in your taxes.
If you are deemed to be in the business of buying or selling cryptocurrencies, your gains may be deemed to be ordinary income (rather than capital gains). In addition, cryptocurrencies received as payment for goods and services (including as a reward for engaging in cryptocurrency mining) are taxable in the year in which such payments are received.
You can read an archived version of the CRA’s statement about digital currency on the CRA website. Speak to a registered financial advisor or tax professional for information related to reporting income from the purchase of digital currencies. Learn more about cryptocurrencies on GetSmarterAboutMoney.ca.
Jun
Generally debit cards are tied to your personal chequing or savings account – not a term deposit such as a guaranteed investment certificate (GIC). GICs are generally locked until they mature, or until you cash it in, depending on the options you choose. Learn more about GICs.
That said, regardless of what can be accessed, if you lose your debit card, alert your bank or financial institution immediately to avoid becoming a victim of identity theft. Some financial institutions allow you to cancel or suspend your debit card online or through a mobile app. This ensures no one has access to your accounts, and you can check to make sure no charges were made before you were able to cancel your card. Your financial institution will issue you a new card.
Rick S.
Pensions are regulated provincially. In Ontario, you have the following options for a defined contribution (DC) pensions plan when you retire:
You can also put your money into both. For example, you can buy an annuity and transfer the balance of your pension to a LIF. You can also use your LIF savings to buy an annuity at any time in the future, if your need for guaranteed income increases as you get older.
Learn more about your DC pension options at retirement.
Thor O.
It is up to you to decide when and how often you make withdrawals from your RRIF. If you are changing the frequency of your withdrawals, or if you want to make additional withdrawals throughout the year, your financial institution may charge a fee to do so.
Speak to your registered financial advisor to learn more about making this change. Learn more about making withdrawals from your RRIF.
John E.
To calculate the capital loss of an investment, you need to know the “adjusted cost base”. The Canada Revenue Agency (CRA) generally defines adjusted cost base (ACB) as “the cost of a property plus any expenses to acquire it, such as commissions and legal fees”.
See this previous Re: Investing question for more information about calculating adjusted cost base.
You will need to know how much you paid for your holdings (whether all at once or overtime), how much you sold the securities for and any associated transaction costs to buy and sell your holdings. If you do not have this information, you may wish to contact the investment firm where your securities were held. The Ontario Securities Commission is not able to provide advice. Speak to a registered financial advisor or tax professional to help you calculate ACB.
Swati
The Canadian federal government offers a Registered Education Savings Plan (RESP) to help save for a child’s education. However, in order to open an RESP, your child must have a social insurance number (SIN), and be a resident of Canada. Learn more about RESPs.
To learn about other options to save for your child’s education, speak to a registered financial advisor.
Amador O.
There is no direct way to transfer funds in a Registered Retirement Savings Plan (RRSP) to a Tax-Free Savings Account (TFSA). In order to contribute funds to a TFSA from an RRSP, you must withdraw the funds, and pay any applicable withholding tax, plus any additional taxes at tax time. You must also have the available contribution room in your TFSA.
Speak to a registered financial advisor or tax professional for advice related to the tax handling of your investments.
Yannis P.
There is no direct way to convert a Registered Retirement Savings Plan (RRSP) to a Tax-Free Savings Account (TFSA). In order to contribute funds to a TFSA from an RRSP, you must withdraw the funds, and pay any applicable withholding tax. You must also have the available contribution room in your TFSA.
Before the end of the year you turn 71, you must close your RRSP and take one of three actions (or any combination of these): convert it to a Registered Retirement Income Fund (RRIF), purchase an annuity, or take the RRSP as cash. Learn more by reading this previous Re: Investing question.
Speak to a registered financial advisor to discuss your RRSP options and to determine the best decision based on your personal financial needs and overall financial plan.
Heather
You can hold a wide range of investments in a Tax-Free Savings Account (TFSA), like cash, GICs, bonds, stocks, ETFs and mutual funds.
To purchase stocks, you may need to set up an investment account – this could be with a full-service investment firm or self-directed. Before you set up an account, make sure the company and individual are registered with your provincial securities regulator.
Speak to your current TFSA provider to see whether your account is already set up to purchase stocks. If you need to transfer funds from your current TFSA account to another TFSA account to purchase stocks, make sure you understand the rules around making transfers between TFSAs.
Learn more about TFSAs.
Diego
An exchange-traded fund (ETF) is an investment fund that holds a collection of investments, such as stocks or bonds owned by a group of investors and managed by a professional money manager. ETFs trade on a stock exchange and can be sold short or margined. You can also trade in futures and options on ETFs.
ETFs can be purchased through a full-service or online trading platform. Before you work with an advisor or firm, check that they are registered in your province. Learn more about buying and selling ETFs.
If your current RRSP account is not set up to hold investments such as an ETF, speak to your financial institution about the rules to make a transfer to another RRSP account.
Bev B.
Rules related to Locked-In Retirement Accounts (LIRAs) and Life Income Funds (LIFs) in Ontario are regulated by the Financial Services Commission of Ontario (FSCO). Information on locked-in accounts can be found on FSCO’s website.
A LIF created now would be considered a New LIF. For information related to the 50% unlocking withdrawal or transfer. New LIF information, including the 50% unlocking withdrawal or transfer, can be found in this FSCO publication.
Anne P.
Each year there is a minimum amount you must withdraw from your Registered Retirement Income Fund (RRIF) based on your age. Any withdrawals in excess of this amount are subject to a withholding tax. Even though withholding tax is deducted from withdrawals that exceed the minimum amount, you may still owe more tax later when you file your tax return. It depends on your total income and tax situation.
A registered financial advisor or tax professional can help you determine the amount of tax you may owe by looking at the full picture of your retirement income and other personal financial information.
Learn more about making withdrawals from your RRIF.
HT
The stock market brings together people who want to sell stock with those who want to buy stock. The buyer and seller must agree on a price before a stock can be bought or sold. When you buy stock (or equity) in a company, you receive a piece of the company and become a part owner. The stock market is made up of the:
Learn more stock market basics.
Alain G.
While we do our best to provide general information, we are not able to provide advice. The Old Age Security (OAS) pension recovery tax is based on total income, not just withdrawals from a Registered Retirement Income Fund (RRIF). Speak to a registered financial advisor or tax professional to learn how the rules apply and to calculate this number based on a full review of your father’s financial information.
For additional general information on OAS pension recovery tax, visit the Canada Revenue Agency website. Learn more about planning your retirement and living your retirement on GetSmarterAboutMoney.ca.
Xingguang H.
If you are interested in managing your RRSP yourself, you may consider looking into setting up a self-directed RRSP. Self-directed RRSPs are available at investment firms — both full-service and discount brokerage firms. You can hold many different investments in a single self-directed plan. If you’d like advice on how to invest and manage your RRSP savings, open an account with a full-service brokerage.
There are costs involved in managing a self-directed RRSP. First, there may be costs involved in transferring your current RRSP. For a self-directed RRSP, you may pay a set-up fee, an annual trustee fee, and sales charges or commissions for buying and selling investments. You may also pay a fee for investment advice or for managing your investments. Commissions are likely to be lower at a discount brokerage, but you’ll need to be comfortable making investment decisions on your own. Before you set up an account, ask questions and make sure you understand the costs involved.
Learn more about self-directed RRSPs.
Ray
You can receive monthly Canada Pension Plan (CPP) payments starting as early as your 60th birthday. What you get depends on what you paid into the plan while you were working. You must be 59 or older and apply 9 months before you retire. Learn more about CPP from the Government of Canada.
The decision of when to start receiving CPP payments depends on many individual factors. We are not able to provide advice. Speak to a registered financial advisor who can help you understand your retirement income needs, and provide investment advice.
Toula L.
Generally, anyone (firms or individuals) selling investments or offering investment advice must be registered to do so. Some providers may also be investment dealers. Before you purchase an investment, check that the firm or individual you are working with is registered.
Learn more about how to buy an ETF, and how to buy a mutual fund.
Peter
While we try to provide general information to help, we are not able to provide legal or financial advice.
The Canada Revenue Agency website has information on balance owing and late filing interest and penalties. You may wish to speak to a tax professional for guidance and assistance in filing past years’ taxes.
Even if you don’t have to file a return (for example, if you have no income to report), you may still choose to file a return in order to take advantage of certain refundable tax credits and benefits, and to build RRSP contribution room. Learn more reasons to file a tax return.
Logan S.
The Canadian Securities Administrators (CSA) and Ontario Securities Commission (OSC) do not offer investing courses and therefore cannot endorse any courses available to investors. In addition, regardless of an individual’s depth of understanding of investing, investment products or markets, there is no way to guarantee that you will make money investing. All investments come with risks.
Individuals who are registered to sell investments or provide financial advice are required to complete specific courses offered by institutions in Canada. These courses may be open to investors who are interested in taking them, excepting any courses with required prerequisites. One such institution, the Canadian Securities Institute (CSI), offers a version of the Canadian Securities Course specifically for investors. You can learn about the course on the CSI website.
Course requirements for individuals registered with the OSC can be found in National Instrument (NI) 31-103.
Gwen
See this previous Re: Investing question related to redeeming a GIC early.
Because guaranteed investment certificates (GICs) are not considered securities, but rather a banking product, the Ontario Securities Commission does not regulate this type of investment. We suggest you speak to your financial institution (typically the bank where you purchased the GIC) for specific questions related to your investment.
If you have a complaint about your GIC, it may be helpful for you to know that complaints about banks and banking products should be directed to the Financial Consumer Agency of Canada (FCAC). Learn how to contact the FCAC.
Daniel B.
The Canada Revenue Agency (CRA) sets and enforced qualified investments that can be held in registered plans. Read their publication, Qualified Investments – RRSPs, RESPs, RRIFs, RDSPs and TFSAs, for more information.
To find out your Tax-Free Savings Account (TFSA) contribution limit, you can use one of these CRA services:
Learn more about TFSAs.
Angelica
What your investment could be worth depends on how often the interest on your investment is compounded – for example, monthly, quarterly, annually, etc. Learn more about growing your savings with compound interest.
You can use the Compound Interest Calculator on GetSmarterAboutMoney.ca to estimate the growth of your savings over time.
Bob
In general, only funds from a Registered Retirement Savings Plan (RRSP) can be contributed to a Registered Retirement Income Fund (RRIF).
You open a RRIF by transferring money from your RRSP. Transfers from other registered plans like pension plans and DPSPs are allowed under certain circumstances. Funds from a non-registered account cannot be contributed to a RRIF.
We are not able to provide legal or financial advice. Speak to a registered financial advisor for more information about making contributions to a RRIF and generating retirement income. Learn more about registered plans in the Canada Revenue Agency’s publication, RRSPs and Other Registered Plans for Retirement.
Kevin G.
Once you are ready to close and convert a Registered Retirement Savings Plan (RRSP) or a Locked-in Retirement Account (LIRA) to receive income in retirement, one of your options is to purchase an annuity. For more information:
Speak to a registered financial advisor lisenced to sell insurance products or a licensed insurance agent to learn more about your options to purchase an annuity.
Mary
Generally, you can transfer investments in-kind from a non-registered investment account to a Tax-Free Savings Account (TFSA) as long as you have the available contribution room. However, you may have to pay tax if the value of the investments has gone up since you purchased them (in other words, you have a capital gain). Once your investments are in the TFSA, they will grow tax free.
Learn more about in-kind contributions to a TFSA (including what happens if your investments have gone down in value) from the Canada Revenue Agency.
We are not able to provide advice and cannot tell you whether this type of transfer would be beneficial to you. Speak to a registered financial advisor to learn more transferring investments to a TFSA and what is right for your financial goals and needs.
Carolyn T.
First, while we try to provide general information to help you, we are not able to provide financial or legal advice. Whether an investment is right for you depends on many individual factors – you may wish to discuss your options and get advice from a registered financial advisor.
You can transfer investments, such as stocks or bonds, from a non-registered account to your RRSP. This is called a transfer “in kind”. You might do this if you don’t have the cash to make your contribution, but you have investments that you want to use instead.
This has tax consequences, however. You are considered to have sold your investments at their fair market value and will have to report any resulting gain on your tax return. You can claim an RRSP deduction equal to the fair market value of the investments transferred to your RRSP. If the fair market value results in a loss, in order to claim the loss on your tax return, you must first sell the investments and then contribute the cash proceeds to your RRSP. Learn more about RRSP transfers.
John B.
While we are not able to provide advice, we do try to provide general information to help you get started. For information specific to your investments and accounts, speak to a registered financial advisor.
The question you need to answer first is: are you planning to keep your investments in a Tax-Free Savings Account (TFSA)? If you want to take your current TFSA funds and move them to a non-registered investment account, you can withdraw the funds from your TFSA at any time.
However, if you want to move your current TFSA funds to a TFSA investment account, you must have the financial institution(s) handle the transfer directly between the TFSAs. This is to ensure that the funds are not considered “withdrawn” and “recontributed” in the same year, which would be considered an over-contribution and may be penalized.
Learn more about TFSA transfers from the Canada Revenue Agency.
Lyle
A stock option is a contract that gives the buyer the right – but not the obligation – to buy or sell a stock at a specific price on or before a certain date. You don’t have to invest directly in the stock. You can just buy the option. One option usually gives you the right to buy or sell 100 shares of a stock.
If you own stock options that you wish to sell, you will need to set up an account with a full-service or discount broker. Generally there are transaction fees to buy or sell in an investment account. Speak to a registered financial advisor for information on buying and selling options, and for information on the associated fees.
If you are asking about selling options as a market participant to investors in Ontario, you may wish to contact the Ontario Securities Commission’s Inquiries & Contact Centre for further information.
Kevin O.
A spousal RRSP is registered in the name of your spouse or common-law partner. They own the investments in the RRSP, but you contribute to it. You get the tax deduction for any contributions you make to a spousal RRSP. Any contributions you make reduce your own RRSP deduction limit for the year. They won’t affect how much your spouse can contribute to their own RRSP.
Contributions to a spousal RRSP cannot exceed your RRSP deduction limit. We are not able to provide advice. Speak to a registered financial advisor to help you determine the best strategy for contributing to a spousal RRSP. Learn more about contributing to your spouse or common-law partner’s RRSP from the Canada Revenue Agency.
Greg G.
While we try to provide general information to help you get started, we are not able to provide advice.
When you make a contribution to your Registered Retirement Savings Plan (RRSP), the contribution amount is deducted from your overall taxable income for that year – the basis for calculating the income taxes you owe. For example, if you earned income of $50,000 and contributed $8,000 to your RRSP, you will only be taxed on an income of $42,000. The immediate savings to your income tax will depend on your income tax bracket. You can find the federal and provincial income tax brackets from the Canada Revenue Agency.
A registered financial advisor or tax professional can help you in handling your income taxes and can help you determine what will work best specific to your financial goals and personal financial needs.
Maryuri M.
We are not able to provide investment advice. Speak to a registered financial advisor or accountant to calculate the credit for your investments. Generally, for eligible dividends:
The Canada Revenue Agency (CRA) has more information on the taxable amount of dividends, both eligible and dividends other than eligible.
Amanda
Once you open a Registered Retirement Income Fund (RRIF), regardless of your age, you must start making withdrawals, starting the year following opening the plan. The Canada Revenue Agency (CRA) sets a schedule of minimum annual withdrawals, increasing each year as you age.
RRIF withdrawals must be included as income at tax time, and any amounts over the minimum withdrawal are subject to a withholding tax.
For more information on withdrawals from a RRIF, speak to your registered financial advisor or the financial institution where you have your account.
Cheryl P.
There are questions that need to be asked before your question can be answered. First – what type of account are you withdrawing money from? If it is a non-registered account, you will be subject to any taxes on your investments – for example, on interest income or capital gains when selling your investments. If it is a Tax-Free Savings Account (TFSA), then you can generally withdraw money at any time for any purpose without paying taxes. If it is a Registered Retirement Savings Plan (RRSP), you may be able to take some money out tax free – more on this below.
Second, is it your first home? If you are withdrawing money to buy your first home, you may be eligible for the Home Buyers’ Plan to withdraw up to $25,000 tax free from your RRSP. Learn more about the Home Buyers’ Plan.
Learn more about saving for a down payment to buy a home. Speak to a registered financial advisor for advice on which option is right for you.
Nancy R.
Under securities law in Ontario, public companies are required to share information on major shareholders. For more information, see this previous Re: Investing question.
You may be able to obtain a list of registered shareholders from a company that is not public by contacting the company directly. However, they would not be required to provide this information under securities law in Ontario.
Alicia
While we try to provide general information to help you get started, we are not able to provide advice. Speak to a registered financial advisor for investment advice specific to your financial goals and personal financial needs.
One key consideration when saving money for short-term goals (like buying a home) or emergencies is the liquidity of your investments – this means how easy it is to access your money when you need it.
If an unexpected expense comes up, you will need to access your money quickly. Learn more about planning for emergencies.
When saving for a home down payment, you may consider keeping the money separate from other savings, growing your money safely in no-risk or low-risk investments, or saving in an RRSP if you’re a first-time buyer. Learn more about saving for a down payment.
Henry P.
We are not able to provide advice. However, general information is provided below. For more information, speak to a registered financial advisor.
Your question may be referring to the option to make withdrawals from a Registered Retirement Income Fund (RRIF) using your spouse’s age. If your spouse is younger than you, you can use their age to calculate your minimum amount. You don’t have to have a spousal RRIF or name your spouse as the RRIF beneficiary to use their age for your minimum amount. However, you must tell your financial institution that you’re doing so before you make your first RRIF withdrawal. And you can’t change your mind later.
If you have already started making withdrawals from your RRIF, you cannot start making withdrawals using your spouse’s age. In addition, regardless of age, you cannot make a tax-free withdrawal. A RRIF can be set up at any time, and a schedule of minimum withdrawals must be followed starting the year after a RRIF is opened. Learn more about making RRIF withdrawals.
Albert W.
New account statements include reporting on how much you’ve made or lost in your account over specific periods of time using a “personal rate of return”. Your personal rate of return is calculated using a “money-weighted” formula, which reflects any deposits or withdrawals you made to or from your account, the income you earned (such as dividends or interest), and changes in the market value of the investments that you’re holding in the account.
This is different from a “time-weighted” calculation of your account’s performance, which only shows the rate of return for money that is invested and left in the same investment until the end of a certain time period (such as one year). A time-weighted rate of return doesn’t reflect any deposits or withdrawals you make into or out of your account, meaning that it doesn’t consider how your account’s performance is affected by its cash-flows.
If you have questions about the information in your account statements, speak to your registered financial advisor. You can learn more about the account statements you receive on InvestmentReporting.ca.
Bernardo T.
There are three basic ways to make money on investments:
The type of return you receive affects the tax treatment of your investments. Speak to a registered financial advisor or accountant to determine the types of return that best suit your investing goals and personal financial situation.
Jill B.
Similar to holding foreign securities inside an RRSP, see this previous Re: Investing question for information from the Canada Revenue Agency (CRA) regarding qualified investments for registered plans.
We are not able to provide investment advice. While you may be able to hold foreign securities inside a TFSA, foreign dividends are subject to a foreign dividend withholding tax – holding these stocks inside a TFSA may not shield you from this tax. Speak to a registered financial advisor and your accountant for information on qualified foreign investments, including foreign mutual funds, and any tax considerations and questions regarding foreign currency conversion inside an RRSP before you invest.
May K.
The fund’s management fee and operating expenses make up a fund’s management expense ratio or MER. They are paid by the fund, and are expressed as an annual percentage of the total value of the fund. While you don’t pay these expenses directly, they affect you because they reduce the fund’s returns. The MER is charged whether or not the fund does well, and is based on the average value of the fund.
The fund sets how often the fee is taken from returns – this could be as often as daily. Learn more about mutual fund fees.
Speak to your registered financial advisor to learn more about the fees you pay, and read Fund Facts for information on the fees that are part of the funds you hold.
Jason
The term “fiduciary” is a legal term, typically found in corporate law, not in securities law. We are unable to provide legal or other advice. You may wish to read the current Canadian Securities Administrators Consultation Paper 33-404 – Proposals to Enhance the Obligations of Adviser, Dealers, and Representatives Toward Their Clients for information about the CSA’s views on this matter.
Registered firms and individuals must follow rules and policies of the Ontario Securities Commission, or the self-regulatory organization (SRO), such as the Investment Industry Regulatory Organization of Canada, or the Mutual Fund Dealers Association of Canada, as applicable, depending on the category of registration. To understand these rules better, for example, relating to potential conflicts of interest between advisors and clients, it is recommended to contact the SROs directly.
The only category of registration that requires a fiduciary duty is a portfolio manager – individuals hold registration as advising representatives. Advising representatives and the firms they work for provide investment advice and manage your portfolio according to the instructions or discretionary authority you have given. Before you consider working with an adviser registered as a Portfolio Manager, always check their registration.
Christine
Under securities law, there are two main categories for registration: dealers and advisors. The terms “dealer” and “adviser” are legal terms that describe a broad range of people who can deal in (trade) or give advice about securities. They may use a variety of titles, such as investment advisor or financial advisor, financial planner, investment consultant or investment specialist. These titles are not legally defined terms or official registration categories.
A person’s registration is more informative than their title because it tells you the type of products or services they can offer. For example, a person registered as a mutual fund dealing representative can sell and provide product advice on mutual funds, but they are not qualified to sell or provide advice on stocks or bonds. Registration granted by the OSC is not an endorsement, but is a minimum requirement for companies or persons advising or trading in securities with Ontario residents.
Registered firms and individuals must follow rules and policies of the OSC, or the self-regulatory organization, such as IIROC, or the Mutual Fund Dealers Association of Canada, as applicable, depending on the category of registration. Before using the services of a financial advisor, always check their registration.
Blair
We are not able to provide advice. However, general information is provided below. For more information, speak to a registered financial advisor to learn more about the tax consequences of making an early RRSP withdrawal.
You can take money out of your RRSP before you retire – for example, to cover an emergency situation. But you will pay an immediate tax on the money you take out (called a withholding tax), and possibly more at tax time. You’ll also permanently lose the contribution room you originally used to make the contribution – with RRSPs, there is no option to “repay”, unless you are making the withdrawal using a program such as the Home Buyers’ Plan (to buy your first home) or Lifelong Learning Plan (to pay for your or your spouse’s education). Learn more about making RRSP withdrawals before you retire.
If you have a “locked-in RRSP”, the Financial Services Commission of Ontario (FSCO) regulates pensions including locked-in RRSP accounts. Learn how to contact FSCO and information on locked-in accounts.
George R.
Rules governing what can and cannot be held inside a Registered Retirement Savings Plan (RRSP) or other federally registered accounts are set and enforced by the Canada Revenue Agency. Visit the CRA’s website to learn more about qualified investments for registered plans.
Generally you can hold U.S. mutual funds and other foreign securities inside an RRSP. However, speak to a registered financial advisor and your accountant for information on qualified foreign investments, including foreign mutual funds, and any tax considerations and questions regarding foreign currency conversion inside an RRSP before you invest.
P.F.
Life income funds (LIFs) in Ontario are regulated by the Financial Services Commission of Ontario (FSCO).
The rules regarding withdrawals are set by FSCO. Depending on when you opened your LIF, you either have a “New LIF” or “Old LIF” under this regulation. The rules for New LIFs and Old LIFs are available on FSCO’s website.
If you have additional questions regarding the rules surrounding LIFs, contact FSCO or speak to a registered financial advisor.
Amy F.
We try to provide general information to help you get started; however we are not always able to provide answers to your questions. The Ontario Securities Commission (OSC) is an independent Crown corporation that administers and enforces securities law in Ontario. Because guaranteed investment certificates (GICs) are not considered securities, but rather a banking product, we suggest you speak to your financial institution (typically the bank where you purchased the GIC) for specific questions related to your investment.
Generally speaking, GICs come in one of two forms: redeemable (or cashable) GICs and non-redeemable (or regular) GICs. If they are non-redeemable, your financial institution may not allow you to cash them early, and if they do, you may have to pay a penalty and/or lose interest on your investment. Learn more about GICs.
If you have a complaint about your GIC, it may be helpful for you to know that complaints about banks and banking products should be directed to the Financial Consumer Agency of Canada (FCAC). Learn how to contact the FCAC.
Hazel
Re: Investing is a website managed by the Ontario Securities Commission’s Investor Office. We are not able to provide advice, or suggest the names of online investment firms. However, companies and individuals that offer investment advice or sell investments must be registered to provide these services in the province or territory where they operate.
Always check the registration of any person or business trying to sell you an investment or give you investment advice. Take steps to better protect yourself by checking registration before you invest and knowing the common warning signs of investment fraud. Use the Canadian Securities Administrators’ National Registration Search to check the registration.
Since all firms registered as Investment Dealers are members of the Investment Industry Regulatory Organization of Canada (IIROC), which is a self-regulatory organization, another option is to review the list of IIROC dealer members on their website.
Being registered is not a guarantee that the person you deal with will always give you good advice or act ethically. Carefully choose who you invest with, and ask these questions before you invest with a new advisor.
Annette
When you are ready to close your Registered Retirement Savings Plan (RRSP) – which must be done by the end of the year you turn 71 – you have three options:
You can also do a combination of any of the above, depending on what best fits your retirement plan. Learn more about your options for getting retirement income from your RRSP.
While we try to provide as much information as we can, we are not able to provide any specific investment or financial advice. Speak to a registered financial advisor to help you decide which option or options are best for your financial goals, risk tolerance and overall investment plan.
Daniel
First, though we try to provide as much information as we can, we are not able to provide any specific investment or financial advice. Generally, if you have more than one Tax-Free Savings Account (TFSA), you can transfer funds between them. It won’t affect your TFSA contribution room — as long as the transfer is done directly between the TFSAs. Speak to your financial institution or registered investment firm to find out how to do this.
If you withdraw money yourself from one TFSA and contribute that amount to another TFSA, it will be considered a separate contribution – not a transfer. That contribution will reduce, and may even exceed, your TFSA contribution room for the year. If you over-contribute you’ll pay a penalty.
Learn more about the rules for making transfers between TFSAs.
Amalia
Retirement planning is about managing your money so you can make the most of your retirement years. Your retirement plan should balance your needs, wants and the reality of your finances. A retirement plan can help you set goals, have a better idea of how much you need to save, and helps you choose what to invest in, and what investment vehicles will work best for you.
When you start saving makes a big difference in how much you need to put away. The younger you are when you start, the less money you may have to put aside regularly, thanks to the power of compounding. GetSmarterAboutMoney.ca has some tools you can use to help you estimate how much you may be able to save. Try the Compound Interest Calculator, RRSP Savings Calculator, and TFSA Calculator.
We are not able to provide advice on how much you need to save. Speak to a registered financial advisor to help you create an investment plan to reach your goals.
Sophia G.
The withholding tax on Registered Retirement Income Fund (RRIF) withdrawals is not based on age, but rather on the amount withdrawn in excess of the minimum annual withdrawal amount. For withdrawals up to $5,000 a 10% withholding tax rate applies, between $5,000 and $15,000 the rate is 20%, and for withdrawals more than $15,000, a 30% rate applies. Withholding rates are different for residents of Quebec.
Even though withholding tax is deducted from withdrawals that exceed the minimum amount, you may still owe more tax later when you file your tax return. It depends on your total income and tax situation. Learn more about making withdrawals from your RRIF.
Speak to your financial institution if you have questions related to the withholding tax on your account.
Dan
A Registered Disability Savings Plan (RDSP) allows people with disabilities and their families to save for their future. Government grants add to your savings and your investments grow tax-free. There are two types of RDSP payments:
Whether DAPs are allowed depends on the financial institution. Speak to your RDSP provider to learn more about making withdrawals from your plan. Learn more about RDSPs from Employment and Social Development Canada.
Liz
Annuity payments are calculated at the time you purchase the annuity. There are various factors that affect annuity payments – one of the main factors is the current interest rate. Learn more about factors that can affect annuity income.
Speak to an annuity provider to learn how the payment is calculated, and what you can expect to receive. Annuities are insurance products. Insurance providers are regulated by province or territory. In Ontario this is the Financial Services Commission of Ontario (FSCO).
Michael Y.
First, though we try to provide as much information as we can, we are not able to provide any specific investment or financial advice.
In short – it depends. You can purchase an annuity with funds from any source – whether registered or non-registered funds. The difference is in the tax that you pay. You can purchase an annuity with the proceeds of your RRSP when you are ready to convert your savings to retirement income. Other options at this time are to set up a RRIF or take your RRSP proceeds as cash – or any combination of these.
Once you set up a RRIF, you must start making annual minimum withdrawals. If you transfer proceeds from your RRIF directly to an annuity issuer, you may be able to receive a deduction on the excess amount of your RRIF withdrawal, that is, the amount above the minimum for that year. Learn more from the Canada Revenue Agency, and speak to a registered financial advisor or tax professional to understand whether this would apply to you.
Mussie D.
Diversification is a way to try to reduce the risk of your portfolio by choosing a mix of investments. Investors diversify their portfolios because not all types of investments perform well at the same time, and different types of investments are affected differently by world events and changes in economic factors such as interest rates, exchange rates and inflation rates. The key to diversification is to not put everyone in one investment. Your overall investment portfolio should match your risk tolerance, but each investment may have different characteristics, to minimize overall risk.
One way to diversify your portfolio is to invest in several asset classes. An asset class is a group of investments with similar risk and return characteristics. The three main asset classes are cash and equivalent investments, fixed income investments, and equity investments.
You can diversify within an asset class, but simply increasing the number of stocks will not reduce risk. To diversify, you need to select stocks whose prices are less likely to move together – for example, diversifying by investing in different industries (e.g. financial services, energy, health care and utilities).
Learn more about diversification on GetSmarterAboutMoney.ca. Speak to a registered financial advisor about how to diversify your portfolio based on your financial goals and personal financial situation.
Sal
Many factors can cause the price of a stock to rise or fall – correctly determining how a stock price will change is extremely difficult, even for market experts. There are some general factors that can affect stock prices, including:
Learn more about factors that can affect stock prices, and indicators used to assess stock value and growth potential.
Sid V.
Before the end of the year you turn 71, you must close all of your Registered Retirement Savings Plan (RRSP) accounts and either convert them to a Registered Retirement Income Fund (RRIF), buy an annuity, or take the amount as cash. You can learn about these options in this previous Re: Investing question.
You can transfer multiple RRSPs to one RRIF, or you can hold multiple RRIFs – it’s up to you. You also do not need to transfer all of your RRSP funds at once – you can do this over time if you want. However, once you have opened and start using your RRIF, you must make minimum withdrawals, with the amount based on your age.
Speak to a registered financial advisor about your options, and to learn the options that best fit your retirement needs and personal financial situation.
Vera L.
The Canada Pension Plan (CPP) is a type of federal government retirement benefit. What you get depends on what you paid into the plan while you were working. You can receive monthly payments starting as early as your 60th birthday. You must be 59 or older and apply 9 months before you retire.
Learn more about CPP, how to apply, and how much you could receive from the government’s website.
Rohini
The minimum withdrawal required for a Registered Retirement Income Fund (RRIF) is based on your age. At age 70 and under, the formula to calculate the minimum withdrawal is:
1/(90 – age)
At age 56, this would be 1/(90-56), or approximately 2.94%. Your financial institution or financial advisor can also assist with calculating this minimum amount based on your age and the value of your RRIF. Learn more about making withdrawals from a RRIF.
Kawsar J.
An initial public offering (IPO) is the first sale of stock by a private company to the public. It’s often called “going public”. You can learn about why companies go public on GetSmarterAboutMoney.ca.
IPOs may be more risky than a stock that’s been on the stock market for a while because they typically have limited history, and you should always do your homework. Before you decide, it is important to get some information into how the company works. To get some information, investors can read the prospectus from the company issuing the IPO. The prospectus describes the business plan and notes important risk factors. Check whether the company is making money or when it expects to become profitable. This document can be found on the System for Electronic Document Analysis and Retrieval (SEDAR).
Information on upcoming IPOs is relayed through stock exchanges where the stock will be sold, through brokers, newspapers, and new filings on SEDAR. Always check the registration of any firm or individual who offers you an IPO. You can do this by visiting CheckBeforeYouInvest.ca.
Carl M.
A Registered Retirement Savings Plan (RRSP) is an account, registered with the federal government that is generally used to save for retirement. You can hold a variety of investments in an RRSP, and how your savings grow depend on the type of investments you are holding and their growth rates. Learn more about RRSPs, and read this previous Re: Investing question to learn about your RRSP options at retirement.
The RRSP Savings Calculator on GetSmarterAboutMoney.ca can provide you with an estimation of the income your RRSP may generate in retirement, based on your current RRSP balance, additional contributions, expected rate of return and the number of years you will need income in retirement.
Speak to a registered financial advisor to learn more about planning for retirement, and determining how you may be able to reach your retirement savings needs and retirement lifestyle goals using an RRSP, and/or other savings options.
Manimozhi
Anyone can open an investment account and invest, as long as they are the age of majority in their province or territory. In Ontario, this is age 18.
GetSmarterAboutMoney.ca has information to help you get started – learn about investing basics including understanding your risk tolerance, investment products, savings plans and getting advice from a financial advisor.
Tess C.
The annual Tax-Free Savings Account (TFSA) contribution limit is a single contribution limit for an individual. If you set up multiple TFSAs, you cannot contribute more than your annual contribution limit to all of them combined.
The maximum annual contribution limit for 2017 is $5,500. For example, if you have four TFSA accounts and you would like to equally contribute to them, you can contribute $1,375 to each of them to max out your 2017 contributions.
If you have not contributed the maximum in past years, or have made withdrawals in previous years, you may have additional contribution room available. Generally, your TFSA contribution room is made up of: the TFSA dollar limit for the year, any unused TFSA contribution room from the previous years, and any withdrawals made from the TFSA in the previous year. You can check your contribution room through the Canada Revenue Agency’s My Account service.
You can also learn more about contribution rules through the CRA website.
Anonymous
The OSC’s Contact Centre team will answer your call during business hours between 8:30am and 5:00pm. If you call after hours, you can leave a message and we will return your call. Also, the Contact Centre can handle calls in 200 languages. The telephone number is 1-877-785-1555.
Diane
A Registered Retirement Income Fund (RRIF) is a savings plan registered with the federal government intended to provide retirement income. A RRIF is set up after closing a Registered Retirement Savings Plan (RRSP). A RRIF, or any other registered plan, is not an investment in itself – but you can hold a wide range of investments within the plan, such as GICs, mutual funds, ETFs, segregated funds, stocks and bonds
An exchange-traded fund (ETF) is an investment fund that holds a collection of investments, such as stocks or bonds owned by a group of investors and managed by a professional money manager. ETFs trade on a stock exchange and can be sold short or margined. You can also trade in futures and options on ETFs. Learn more about ETFs.
You can hold ETFs and a variety of other investments inside a RRIF. Because you can’t make additional contributions to a RRIF once it’s set up, you will need to use existing funds within your RRIF to purchase ETFs if you choose to. A registered financial advisor can help you determine how ETFs fit into your financial plan.
James
Registered Disability Savings Plans (RDSPs) are a type of registered plan that allow people with disabilities (who qualifies for the Disability Tax Credit) and their families to save for their future. Government grants add to your savings and your investments grow tax-free. Learn more about RDSPs.
Since an RDSP is a long-term savings plan, there are specific conditions about taking money out. Generally, money can be withdrawn from an RDSP anytime by the person who manages the RDSP, but with some very important exceptions and restrictions. There are two basic ways to make withdrawals from RDSPs:
Learn about these two options from the Canada Revenue Agency. For information on either of the above, and how the rules apply to your plan, contact your financial institution or a registered financial advisor.
Morgan
When thinking about investments for any savings goal, you should keep in mind your personal and financial circumstances and risk tolerance. There are many different types of account you can use to save, for various savings goals. For example:
This previous Re: Investing question may help you understand the types of questions you need to ask when choosing investments for any financial goal. Speak to a registered financial advisor to learn more about the different types of savings accounts and which one(s) will work best for your own personal financial needs and goals.
Robert
We are not able to provide advice related to your question, however, we do try to provide general information to help. The “tax-free” portion of a tax-free savings account (TFSA) refers to your income growing tax fee – whether you are earning interest, dividends or capital gains – even when withdrawn. Contributions to a TFSA are made with after-tax dollars, and making a contribution to the plan with the lump-sum you received would not prevent you from paying taxes on the sum. The Canada Revenue Agency requires you to pay income taxes on severance pay. As tax rules are enforced by the Canada Revenue Agency, if you have questions we suggest you, contact them. If you do decide to contribute to your TFSA, make sure you are within your contribution limits. You can find out how much room you have available from the Canada Revenue Agency (CRA).
Another option may be to contribute to a registered retirement savings plan (RRSP), a tax-deferred savings plan, if you have contribution room available. With an RRSP, contributions are tax-deductible and your savings grow tax-free within the plan. Withdrawals from the plan are fully taxable as income in the year you withdraw them.
A registered financial advisor or tax professional can help you determine what will work best for your own financial needs and personal situation. Learn more about TFSAs and RRSPs.
Jane M.
Trailing commissions on mutual funds purchased in a discount brokerage account go to the firm.
Some investment fund managers offer a series of their funds that is designed for Discount/DIY investors. These fund series pay a lower trailing commission than do the traditional full service retail series. However, not all discount brokerage firms offer these series of funds.
If you have questions about trailing commissions or other fees, consider your options and always review documents such as Fund Facts prior to purchasing a fund to ensure you understand the costs and other charges associated with your investment.
Jozef
Many investors have concerns similar to yours. This is generally referred to as socially responsible investing.
Socially responsible investing can mean taking an investing approach that seeks to avoid harm by not investing in companies in fields such as oil, gas or tobacco. It can also involve a focus on company practices – for example, energy companies that focus on ensuring they follow the best environmental practices.
There are funds available that focus on socially responsible companies, however these may not be set up to track the market. Consider your options before investing, and speak to a registered financial advisor or investment firm to ensure they are aware you want to make this a part of your investment plan.
Lena
A registered retirement savings plan (RRSP) is a federally regulated retirement savings option for those eligible that can help you save tax-free until you are ready to retire, and offers other tax advantages. RRSP contribution room is built based on your earned income, up to certain limits, and whether you contribute to a workplace pension plan.
Contributions to RRSPs are not automatic – you must set up an RRSP with a financial institution and make contributions, or, if available, join a group RRSP through your employer. If you have an existing RRSP that you have contributed to, you can make withdrawals from it at any time, subject to withholding tax. You must also report the amount you withdraw as income when you file your taxes. Learn more about making withdrawals from an RRSP before you retire.
Marshy
While we try to answer as many questions as we can, we are not able to provide advice. But we do try to provide general information to help you.
The investment platform you use is not an indicator of how your investments will perform, and no investment platform or financial institution can guarantee you a return.
Before you work with a financial institution, online investment platform or financial advisor, always check their registration and ask questions about how they are paid and how they will work with you. You can check the registration of a firm or advisor with the Canadian Securities Administrators’ National Registration Search, and read these questions to ask a financial advisor.
Tasha
In Canada, bankruptcy rules are based on the Bankruptcy and Insolvency Act, and overseen by the Office of the Superintendent of Bankruptcy.
While the Bankruptcy and Insolvency Act does not specify that you cannot open an RRSP following bankruptcy, ensure you understand the rules around what happens to your income and assets after you’ve filed for bankruptcy. Speak to a qualified financial advisor or accountant for advice related to your individual situation.
For more information on bankruptcy rules, contact the Office of the Superintendent of Bankruptcy.
George
When you are planning to make an investment, understanding what you are buying and why it’s right for your investment needs is a key first step. A mutual fund is a collection of investments, such as stocks, bonds and other funds owned by a group of investors and managed by a professional money manager. The investment objective of the mutual fund determines what types of securities it buys. A mutual fund can focus on specific types of investments. For example, a fund may invest mainly in government bonds, stocks from large companies, or stocks from certain countries. Or, it may invest in a variety of investments.
When you buy a mutual fund, you’re pooling your money along with other investors. You put money into a mutual fund by buying units or shares of the fund. As more people invest, the fund issues new units or shares. The investments in a mutual fund are managed by a portfolio manager. They manage the fund on a day-to-day basis, deciding when to buy and sell investments according to the investment objectives of the fund.
To learn more about mutual funds, how they work, types of funds, risks of mutual funds and how to buy them, visit GetSmarterAboutMoney.ca.
If you are new to investing, GetSmarterAboutMoney.ca also has a wide variety of resources on investing basics, investment products and savings plans.
Zehir
Generally, you do not get to choose the coverage you receive. Your financial institution must be a member of an insurance provider for you to receive coverage. Before you open an account, inquire as to what kind of coverage you have for the holdings in that account. If you already have an account, contact your financial institution to learn more. Note that insurance coverage is not a guarantee of the value of your investments, but rather coverage in the case that your financial institution becomes insolvent.
Learn more about what happens if your financial institution goes bankrupt.
Marilyn
This previous Re: Investing question may help you understand the difference between mutual funds and equities: “Which is better: equities or mutual funds?”
Since mutual funds and ETFs both hold a mix of investments and investment types (e.g. equities or bonds), different funds will have different levels of risk. A financial advisor can help you determine what level of risk is right for you based on your personal financial situation and risk tolerance. Before you work with a financial advisor, check their registration.
Mary
Segregated funds are an investment product sold through life insurance companies, regulated federally by the Office of the Superintendent of Financial Institutions (OSFI) and sold by insurance advisors. Depending on the seller, segregated funds may also be regulated provincially – in Ontario this is under the Financial Services Commission of Ontario (FSCO). They are individual insurance contracts that invest in one or more underlying assets, such as a mutual fund. Learn more about segregated funds.
Segregated fund performance is reported by the insurance companies who offer the product. They typically provide information on the fund’s performance on their website including annual returns and fees. However, keep in mind that past performance cannot be used as an indication of future return.
Mandeep K.
A company’s share price is determined by supply and demand based on buyers and sellers who want different prices. Supply is the total number of shares that people want to sell. Demand is the total amount of shares that people want to buy.
If there are more buyers (demand) than sellers of the stock, the buyers bid up the prices of the stock to motivate sellers to get rid of them. The reverse happens if there are more sellers (supply) for the stock than there are buyers. As more owners sell, the holder of the stock lowers the price to entice a buyer to purchase the stocks since there is now more supply than demand.
Why there might be more buyers for a stock than available supply could be based on a number of factors such as a positive outlook for the company, confidence in the market place or economy or that the company’s share price will go up over time.
Learn more about factors that can affect stock prices.
Patrick B.
There is no database available to help you track down a missing Registered Retirement Savings Plan (RRSP). However, there are a few things you can do to try to locate it:
If what you had was not an RRSP, but rather a locked-in retirement account, for example, set up to hold retirement contributions after leaving a past employer, contact your provincial pension regulator. In Ontario this is the Financial Services Commission of Ontario (FSCO). Outside of Ontario or for federally regulated pensions, you can contact the Office of the Superintendent of Financial Institutions (OSFI) to help you determine next steps.
Eric S.
We are not able to provide advice, though we do try to provide general information to help. If you are concerned about the performance of your investments, speak to a qualified financial advisor who can help you determine the best action based on your investment goals and personal financial situation. There are many reasons investment prices may drop. Depending on the type of investments you hold, or the companies that you invest in, learn about some factors that can affect investment prices.
Prolonged periods of high or low prices may indicate a bull or bear market. A bull market happens when investors are optimistic about companies’ growth potential and profit outlook, and stock prices generally rise for an extended period of time until hitting a peak – the opposite is a bear market, where investors turn pessimistic and stock prices generally decline for an extended period of time, before hitting bottom. Learn more about bear markets and how to handle them when it comes to your investments.
If you are concerned about bear (or bull) markets in the future, consider creating an Investment Policy Statement (IPS). Having an IPS can help investors decide what to do in turbulent periods where you may consider buying or selling, and avoid making emotional decisions.
Bill G.
What happens to the money in a Registered Retirement Income Fund (RRIF) after the death of the RRIF holder – and the taxes on it – will depend on:
Read this previous Re: Investing question to learn more about the tax implications to a RRIF after death.
If a deceased RRIF holder has a designated beneficiary, the money in your RRIF will be paid to the beneficiary, but the taxes are paid from the annuitant’s estate. Generally, the deceased’s estate is responsible to pay the deceased’s taxes. For more information, see the Canada Revenue Agency’s publication, Death of a RRIF annuitant.
Bill G.
TFSAs are a way for individuals to save tax-free throughout their lifetime. The rules for opening a TFSA can be found on Canada Revenue Agency’s website.
The Ontario Securities Commission (OSC) is a Crown corporation that is responsible for regulating the capital markets in Ontario. Learn more about the OSC. As a securities regulator, we do not regulate plans such as TFSAs, or the rules associated with them.
If you have questions related to the administration of a TFSA, or who is eligible to open one, contact the Canada Revenue Agency.
Ishan J.
While we try to provide general information to help you get started, we are not able to provide investment advice.
Deciding how and where you save your money is a big part of your retirement plan. In Canada, the federal government, and sometimes employers, offer incentives to help you save money and build your retirement nest egg. These include:
Learn more about retirement planning. You can also speak to a registered financial advisor who can help you determine the best way to reach your retirement goals based on your personal financial situation.
Joyce
When you buy a bond, you’re lending your money to a company or a government (the bond issuer) for a set period of time (the term). The term can be anywhere from a year or less to as long as 30 years. In return, the issuer pays you interest income. On the date the bond becomes due (the maturity date), the issuer is supposed to pay back the face value of the bond in full (your original investment). There are different types of bonds you can invest in, or you can purchase a bond fund – a mutual fund or exchange-traded fund that invests in a number of different bonds. Before you consider investing in bonds, learn about the risks associated with this type of investment, and the factors that can affect bond prices.
Bonds can be purchased through a full-service investment firm which can place the order for you, or you can invest yourself by setting up an account online through a discount broker. Learn more about full-service investment firms and discount brokers. Bonds can be held in savings accounts, such as RRSPs, TFSAs or RESPs. Before you work with an investment firm, check that they are registered in your province or territory.
Richard P.
Fund Facts is a user-friendly document that provides important information that you should know about the mutual fund you are buying, such as performance history, investments, risk rating and fees. Mutual fund dealers are required to give investors a copy of the latest Fund Facts before they decide to purchase a mutual fund. Learn more using this interactive sample of Fund Facts.
Fund Facts must be updated by the mutual fund company on an at least an annual basis or more frequently if there has been a material change to the fund that affects the content of document (e.g., a change in investment objectives or an increase in the management fee of the mutual fund). The Fund Facts should be dated within a 12-month period from the date of the fund’s simplified prospectus.
All updated Fund Facts can be found on the System for Electronic Document Analysis and Retrieval (SEDAR).
Speak to your advisor if you have questions about information presented in Fund Facts.
Abbas
First, though we try to provide as much information as we can, we are not able to provide any specific investment or financial advice. A registered financial advisor can provide advice on the types of investments that are a good fit to your financial goals based on your specific financial circumstances, investment needs, objectives and risk tolerance. Investments generally fall into three categories: equities, fixed income and cash or equivalent investments. Equity investments are another word for investments in the stock market. Fixed income investments aim to pay regular income while protecting your principal, for example, different types of bonds and some GICs. Cash or equivalent investments include savings accounts, fixed-term deposits and highly liquid investments like money market funds.
A mutual fund is an investment that pools money from many people and generally invests in a mix of investments such as (equities) stocks and fixed income (bonds). As an investor, you own part of the mutual fund by buying units. There are many types of mutual funds, each with its own objectives and risks. A professional manager chooses investments that match the fund’s investment objective for risk and return. Learn more about how mutual funds work. Equities, also known as “stocks” are an investment in a specific company. When you buy stocks of a company, you’re basically buying a piece of that company. As an investor, this entitles you to your portion of the company’s profits, typically paid in the form of dividends or you stand to profit if the share stock price increases. Learn more about how stocks work.
Jim S.
A Registered Retirement Income Fund (RRIF) is an account registered with the federal government that is intended to provide you with a steady income in retirement. You can open a RRIF anytime, but no later than the end of the year you turn 71, not age 72.
If your spouse is younger than you, you can use their age to calculate your minimum amount. This may be a good strategy if you have other sources of income and want to leave your money in your RRIF for as long as possible. RRIFs are generally flexible – you don’t have to have a spousal RRIF or name your spouse as the RRIF beneficiary to use their age for your minimum amount. But you must tell your financial institution that you’re doing so before you make your first RRIF withdrawal. And you can’t change your mind later.
Learn more about how the minimum is calculated, and see the withdrawal rates by age.
Armand B.
A Tax-Free Savings Account (TFSA) allows your savings to grow tax-free, and you can withdraw money at any time without paying tax on any gains you make from selling the stocks.
Withdrawals you make can be re-contributed in the same year if you haven’t contributed more than the current maximum of $5,500 a year or in the following year. Investment income earned by, and changes in the value of your TFSA investments will not affect your TFSA contribution room for current or future years. Read this previous Re: Investing question to learn more.
Trades within your TFSA can be made as often as you like, without having to pay a capital gains tax. However, note that conversely you cannot use capital losses on investments in your TFSA to offset the gains. You should be aware that the Canada Revenue Agency (CRA) may audit a TFSA if investors are using their TFSAs to operate a business of trading securities – for example, if trades are too frequent and you earn large gains. Speak to a registered financial advisor or tax professional to learn more or learn more about TFSA’s on the CRA’s website.
CJ
While we try to provide general information to help answer your investing questions, we do not regulate registered plans, such as registered retirement savings plans (RRSPs) and locked-in retirement savings plans (LRSPs), or the rules associated with these plans. The Ministry of the Attorney General in Ontario has information on division of property related to separation and divorce. Speak to a legal representative to understand how division of property would apply to your personal situation.
The rules that govern RRSPs are set out in the Canadian Income Tax Act which is administered by Canada Revenue Agency (CRA). You can get more information on transferring RRSPs on breakdown of marriage on the CRA’s website. LRSP rules are set out in the Pension Benefits Acts and regulations are administered by the Financial Services Commission of Ontario (FSCO) – Pensions. Learn more on FSCO’s website.
The Ontario Securities Commission (OSC) is an independent Crown corporation that is responsible for regulating the capital markets in Ontario. As a regulatory body, the OSC administers and enforces compliance with the provisions of the Securities Act (Ontario) and the Commodity Futures Act (Ontario). Specifically, we work to protect investors and foster fair and efficient markets by making and monitoring compliance with rules governing the securities industry in Ontario.
Mellinda B.
A capital gain is when you sell a stock for more than you paid for it. The entire capital gain must be reported as income on your tax return and is taxed at a rate of 50% of net capital gains – the total amount of capital gains minus any capital losses if you sold any stocks for less than you paid in the same year. If you receive capital gains from investments outside Canada, the equivalent Canadian dollar value must be reported on your Canadian tax return and will be taxed accordingly.
Investments held and sold in a tax-deferred registered account – such as an RRSP – are not taxed until you withdraw them. At the time of withdrawal, they are taxed as income.
Learn more about tax and investing, and speak to a qualified tax professional for information related to your personal financial situation and questions related to how tax is applied to registered plans.
