Delean: The math can be tricky for principal residence tax exemption montrealgazette.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from montrealgazette.com Daily Mail and Mail on Sunday newspapers.
Image source: Getty Images
The flexibility of the Tax-Free Savings Account (TFSA) is beyond compare, because users have so much leeway to make the most of their accounts. One salient feature is international diversification. It means you can hold U.S. and other foreign securities in your portfolio.
Some financial experts say it makes sense to set aside home country bias if the chosen foreign assets can deliver higher returns than their Canadian counterparts. However, not all would agree that this asset-allocation strategy is beneficial to TFSA investors. What’s the point if there are tax consequences in a tax-advantaged account?
A fee-based account is where a fee is charged based on the market value of the assets being managed. This is distinctly different than a transactional account where commissions are charged for every buy and sell transaction. When clients open a fee-based account, they sign a fee-based agreement that establishes the agreed upon fee, how the fees are calculated, when the fees will be charged, and which accounts are to be fee-based.
There are a number of benefits for clients in moving to fee-based accounts. Working on a “fee for service” basis, rather than a commission or transactional fee basis, means the best interests of the client are more aligned with those of the Portfolio Manager. If fees are based on the market value of the account, then the only way a Portfolio Manager will be compensated more is if they can grow your account in value. If your account declines in value, then so does the compensation paid to your Portfolio Manager.
PAID CONTENT
A retirement crossroads
Canadians on the cusp of retirement often struggle with one question above all others: when should they officially start living off their savings?
Many choose to retire on schedule, at 65, drawing income from a mix of their Registered Retirement Savings Plan (RRSP), Canada Pension Plan (CPP) and Old Age Security (OAS). What they may not realize, however, is their contributions will continue growing between the ages of 65 and 70 – if left untouched.
Waiting to access these assets has clear financial upsides: Canadians who delay collecting their CPP can see payments rise by 0.7% per month after the age of 65, up to a maximum of 42%.