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Libs have defined middle class as having the capacity to provide decent housing, quality of life, and a good education for their families, while saving for a dignified retirement.
The libs consider that the above can all be achieved anywhere from $44,700 to $89,401.
I don't see that happening nor do I see that as realistic in today's economy.
Generally govs take somewhere like 75% and 150% of the mean income to determine the middle.
Sometimes net worth is used as many taxpayers have equity in homes, however as home prices explode less can afford that potential equity asset. That fact coupled with less jobs push people out of the middle AND even make the poor poorer and even more worse off.
In times like today, companies that make money hold it until they see what Jr. does and what effect looming trade variables will have on their bottom line so in reality they "make money" and horde capital to the further deyriment of hiring and raises. They take capital but release none, not a good sign for economic growth.
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- Save for Retirement
If you have maximized your Registered Retirement Savings Plan (RRSP) contribution room, use a TFSA to complement your RRSP. A TFSA gives you a second source of funds in retirement that you can withdraw at any time without tax consequences. You can also earn tax-free returns even if you don’t have the earned income required to make an RRSP contribution. And you can contribute at any age once you become an adult.
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Had a moment to read the 2 links.
Maxing an RSP in any given year will mean having 18% of your gross income under your mattress. In "real" terms for someone that earns 50,000. That means sitting on $9,000. In real terms, that means having probably somewhere around 50% of all possible disposable income ( after taxes and bills). Aka of the roughly $20,000 that goes to discretionary spending, your earmarking HALF to savings. The last year my daughter was in Gynmanstics not counting travel/lodging expenses for ourselves I think the cost was $5,000. Heck, it cost $16,000 for both of them to get braces years ago.........
What percentage of people ( I truly don't know and kind of wish when people aka writers and banks put this stuff together they included the "whole picture") are really ever able to max their RSPs. Any unused room also carries forward......
So I wonder, just who the RBC is "speaking to" when they say. Wow, did you know that if you max your RSP ( say $20,000) and defer 30% of the income taxes, you can also sock even more into a TFSA if you haven't also maxed your RESP? :) Consider just this. When you get your tax return in May having deferred 30% of $20,000 ( roughly 6,500) you can now max your TFSA for that calendar year....omg look at you go.........
Words can be a little tricky.
Growth in your RSP is "tax free" to. If you make it to retirement, then and only then is it taxed. There no capital gains tax, theres no tax on the dividends, theres no tax on the interest. It to, just like the money in a TFSA grows tax free and compounds. I forget the exact rate but the effective tax on dividends is around 16% and Interest 22%. That to isn't taxed until in theory and hopefully many years later when depending on various things your annual income will be somewhere between $45,000 and $90,000 and subject to 20.5% fed income tax...
Again simply to "illustrate" and this is not entirely dead on accurate either
You have $1,000 you can direct to an RSP and get $300 back right then and there, you can direct it to a TFSA.
Two different people go each way. They both buy X and it cost them $10/share. It yields in dividends 5% and does so for 10 years and over the 10 years it doubles from $10/share to $20/share when at age 65 and take the cash to go on a trip to sunny Florida to celebrate winning at the game of life.
In the RSP
$1,000 worth of X is now $2,000.
10 years of dividends yielding 5%/year has accumulated $500
$2,500
Its taxed at 20% or $500 goes to the government leaving that person.
$2,000 ( plus the $300 they got back in year 1)
$2,300
In the TFSA
$1,000 worth of X is now worth $2,000
10 years of 5% yield dividends has accumulated $500
$2,500
What did you do with the $300 you got back 10 years ago.
Did you use that to buy your child some much needed hockey equipment?
Did you invest it in stock X where it to doubled to 600 and you received $150 more in dividends for a total amount of $750
Was that in an unregistered account?
Capital gains tax applies to 50% of the gain and the dividends are taxed at 16%
Was it in a TFSA where its sheltered.
Person one goes to Florida with $3,050
Person two goes to Florida with $2,500
Are we absolutely certain TFSAs are better than RSPs?
Answer
Depends
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The libs consider that the above can all be achieved anywhere from $44,700 to $89,401.
And we will tell you that in order to have a similar lifestyle, not the same but similar. You want 70-75% of your annual income during your working years.
So lets assume your a working stiff with no Pension. I am going to ignore CPP/OAS, I am going to ignore inflation.
75% of $60,000. Your target is $45,000 of income a year during retirement.
How long do you hope to live before its gone? Statistics tells us men are living 22 years, women 25 years.
Whats a reasonable rate of return? Well depends on your risk tolerance. What is that? Thats a different long discussion, not what most think it is.
Lets use 4% so you aren't losing ground to inflation.
How much do want in the bank the day you retire?
$702,993.59
or you could just rent a room where G used to work because the cost is about the same.
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Next logical question...OMGF!! how, how the hell can we save that much....How, how can we possibly. When Im taxed up the ying yang taking care of everyone and everything else....
BNS says "Don't worry your richer than you think you are.
:)
How much do you have in the bank now?
How many years are we talking about before you hope to retire
Lets have a look at your budget, lets have a look at your income, taxes..literally Im asking you to tell me everything about your life. Divorced?
Alimony payments?
What other goals in life do you have. Would you like a vacation every 5 years or so?
How are your parents? Do you want to care of them in their golden years? Will you need to??
Whew, you have some savings, you have some home equity your jobs secure.
What? What do you mean your afraid things are on thin ice.....Well we can help there to.
but honestly don't worry.
Theres 20 years until you hope to retire and now that the kids are off to University getting their pedigrees so they to can join the Burgois, its ok.
You've got 60,000 saved. You just need to come up with another 650,000
Easy peasy.
For the next 20 years you just have to save $21,828 each year.
oops sorry, don't worry. CPP and OAS are going to help.
Based on your years in Canada, and contributing to society etc combined they will get you about
$12,000 a year. So we really don't need to find $650,000, nor save $22,000 a year.
You really only need to find a source of about 30,000 year in your golden years.
:)
Is it really that bad....No.
However......
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Jben, your analysis and figures are pretty well accurate. Financial planning is very important and people nowadays throw it out like four sails to the wind. The mentality is spend today, enjoy life and the government will take care of us when the need arises. That is a serious problem living in a welfare socialist state. The bubble will burst simply because we have over extended ourselves. I was fortunate enough to marry a great gal 32 years ago who signs her name with the credentials CPA. I would not even know how to fill out a simple tax return but fortunately she has guided our modest life pretty darn close to retirement now. The planning started 3 decades ago. Food for thought!
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I /like
hehe (designations).
Dont get me "wrong" but really, speaking in generalist terms, they like many things are devalued. Dont mean what they used to. And oddly enough the paper cost ( if not social cost) hes as Werner said inflated (grossly).
True Story. Just happened this morning. My GF, my sister could verify any of this.
Find out my 24 year old niece (great young girl) is shortlisted for being hired as a financial advisor. I had to use great care initially with my sister to ensure she understoood I wasn't slagging her daughter/my niece. Thankfully my sister being being a couple years older than I, completely understood. What does she know about "life", about divorce, about being a parent and now huge bills for a child...for life....or "getting your affair in order" and so many more thing....Maybe a child/spouse get into a car accident and it's life altering....
about budgeting ( she's just moving out on her own now), the cost of food, insurance, the myriad of investment vehicles, the options out there. For some X will be the "right choice", for Y, and so much more...
What was 1 part of the process...give us 50 names of people you know and do a market analysis. Go read some of the job postings I linked Over and over you will see " increase share of the wallet".
Translation, ok we have their day to day banking, maybe you've talked to them about credit and many types of credit, pros cons, why this or that might be right for them (and in many cases it is)...We want more of the wallet, get them to buy Life Insurance from us, we dont care if they already have enough and the extra premiums....wallet share...
I know a lot about tax law, know quite a bit about family law, estate planning and even some more trickier stuff about small business, succession planning, laws and tax treatment for sole proprietary and more......
Doesnt mean Im a CPA or CFA, or a family lawyer
/sigh
hopefully by the time we are worm food, some things will straighten out
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Jr blames global corporate elites for public anger over things like economy, says [COLOR=#191919]"It's time to pay a living wage, to pay your taxes, and to give your workers the benefits – and peace of mind – that come with stable, full-time contracts."
Gee Jr, can you say Crown Corps, Green energy BS, International funding, and Carbon Tax.
Lecture much? How about you pay your NATO tab? I am weary of paying for you and your children's protection as he shruuged and told Merkel there are other ways to measure NATO contribution.
You just can't make up this kind of political stupidity.
#clueless
https://beta.theglobeandmail.com/news/politics/trudeau-merkel-germany-nato-spending/article34065401/?ref=http://www.theglobeandmail.com&
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I was watching news feeds from Europe,tonight,where JT was speaking to E C members about CETA and NATO commitments etc. and he actually didn't sound too bad according to Mrs Trimmer. Then,I thought,it's really easy to appear to be a decent,knowledgable guy when you're preaching to the choir of dedicated leftist government reps from European countries who have quite clearly drank too much left wing Kool-Aid. CTVNews actually reported that some Euros called him a handsome Canadian Kennedy. JEEZUS,I fackin' near lost it,then.
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The way I see it we are doomed to years of Trudough. He is a global celebrity and has Canadians duped. Scary that eh. What we need to do now is work on getting Wynne either thrown in jail or out of office. The Provincial Libranos will screw you children and grandchildren like nothing else. They truly are a menace to our future well being. The hydro sale alone will permanently hurt everybody's standard of living now. It can't be reversed. A new government can kill the carbon tax fraud though.
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The Hydro sale can be reversed. Just means the province has to buy the shares back on the open market at whatever the market price is.<br><br>but yep. <br>Another indication just how screwed up things are.<br><br>thousands and thousands of GTA ERs losing their Shute over Trump. Marching, filling social media.<br><br>meanwhile in their own backyard.<br>/crickets
