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Family Finance Beyond RRSPs
(NC)-Congratulations, you have contributed the maximum amount to your RRSP. So now what? "At this point," says Anita Prescott, a certified financial planner (CFP) and Winnipeg-based financial adviser with CIBC Imperial Service, "it's best if couples can work with a dedicated financial adviser to really look into their net worth (the difference between what you own and what you owe)." And to maximize any potential gains, Prescott offers some insight for families working together to invest and grow this net worth. Take advantage of the benefits of a spousal RRSP While the contributing spouse will realize the immediate tax savings from the spousal RRSP contribution, many couples will also benefit from future tax savings when income is received from the spousal RRSP, because the income is taxed at the spouse's marginal rate, and not that of the contributor. With proper planning, income can be drawn from both spouses' RRSPs or other income sources in order to reduce the total taxes paid on the entire amount. Make your portfolio tax efficient If you have both registered and non-registered investments, ensure your portfolios are structured to be tax efficient. Positioning your income-producing investments within a tax-sheltered RRSP and your equity and dividend-producing investments in your non-registered accounts may allow you to realize significant tax savings. Improve your cash flow If you have a regular investment plan in which your RRSP contribution is withdrawn automatically, you may be able to have less income tax deducted at source. That way, you'll have more cash in your pocket now instead of having to wait for your tax refund. Have your children file tax returns If your children earn income in the year, they could reap benefits by filing a tax return, even if they owe no tax. Earned income at any age generates RRSP contribution room, which can be carried forward indefinitely. By filing a tax return today, your children can build valuable contribution room for use in future years. This article is intended to provide general information and should not be construed as specific advice. This article is not applicable in Quebec. About The Author News Canada provides a wide selection of current, ready-to-use copyright free news stories and ideas for Television, Print, Radio, and the Web. News Canada is a niche service in public relations, offering access to print, radio, television, and now the Internet media, with ready-to-use, editorial "fill" items. Monitoring and analysis are two more of our primary services. The service supplies access to the national media for marketers in the private, the public, and the not-for-profit sectors. Your corporate and product news, consumer tips and information are packaged in a variety of ready-to-use formats and are made available to every Canadian media organization including weekly and daily newspapers, cable and commercial television stations, radio stations, as well as the Web sites Canadians visit most often. Visit News Canada and learn more about the NC services. News Canada More Articles Lions and loans: why finance should always be personal - Rachel Lane
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