My dad, who doesn't frequent RFD would like to know if he can open up a US brokerage account because the fees are more competitive. He was taken aback though when he was told he cannot even trade when visiting Canada. He is not a permanent resident nor a citizen of Canada by the way.
He only buys calls but being able to make spread bets could be a possibility for him down the road.
"The restriction is placed on the broker that if we do not have offices located in Canada we cannot offer brokerage accounts to Canadian citizens or residents, we are also restricted in allowing orders to be executed from Canada. Believe me, I wish this was not an issue. These regulations are not set by TradeStation."
What is this restriction trying to achieve?
Thanks for any suggestions.
Interactive Brokers should be able to take care of him anywhere he lives in the world. If not out of the Canadian office, then out of the US.
Brokerages that aren't approved by Canadian regulations can't take on customers in Canada.
The rule came in roughly around the year 2000. The Canadian and US security regulators both agreed to enforce this rule, so US brokerages were forced to stop taking on Canadian customers and make them transfer their accounts back to Canada.
Although, I know customers that have an IRA or 401k account and then move to Canada are allowed to continue to use their accounts. I'm unsure what the laws are about trying to use regular accounts in Canada when they were opened in the US.
IB has everything I just described, plus an uncountable number of other features I haven't checked out yet. One-click order entry is available if you want it, you can set it in the preferences. Actually there are many possibilities for order entry; for example you can enter a multi-contract combo and then submit all legs with 1 click (including spreads, obv). You can set the default order type or combination to whatever you want. You can set conditions. You can even code your own more complex decision rules in visual basic, C++, java, etc and then plug them into IB as addons. Order entry is one of many things which is customizable depending on your needs, habits or strategies. Most of the other defaults in the platform can be customized too. Or you can disable all the extra features so that the platform has only the bare minimum needed for your stuff, with no bells or whistles. It's all left up to the user.
Big5 bank brokerages in Canada (which admittedly I have only briefly looked at) appear to me as below standard at best, mickey mouse at worst, with the primary reason being lack of customizability. The things I named in my post are basics. VaR, risk ladders, major greeks, and payoffs, are fundamental; the absolute basics for any brokerage hoping to be taken seriously IMO. IB has these, and a bunch of other risk management tools.
I think if you go to the IB website there's a section where you can try out the platform yourself. Not sure if it is full featured in the test-drive version, but maybe worth a look.
If you want more nuanced discussion on brokerages from people who trade a lot of options, go on google and look up a forum called Elite Trader. They have a whole section where people just rate their brokerages on a variety of categories. Hundreds, maybe thousands of reviews on loads of brokerages including IB.
Tuesday, January 11, 2011
where to get PREPAID paypass
i really want one of these paypass credit cards, they look pretty cool. havent had one yet. but i have pretty bad credit, no one will give me a new credit card. which means i have to get a prepaid one. is there such a thing as a prepaid paypass? if so where do i get one from?
thanks
dan
ZoomPass (need a cell number to signup, no fee, load by paying as bill via online banking), the prepaid MC they send is PayPass enabled.
thanks
dan
ZoomPass (need a cell number to signup, no fee, load by paying as bill via online banking), the prepaid MC they send is PayPass enabled.
Transfer RRSP from CIBC to PCF: free or $100 fee?
I contemplate transferring my RRSP from CIBC to PC Financial. Does anyone know if CIBC and PCF are deemed same or different financial institutions for the purpose of such transfer? Thanks.
Not free. They are like Best Buy and FS althou pcf can use cibc atm's.
Not free. They are like Best Buy and FS althou pcf can use cibc atm's.
Quick question about credit cards
Applied for one not too long ago, and the bank teller was too pushy (have made a mental note to not deal with her ever again). So say my card has 19.99% interest, it's only applied to money that as yet to be paid back, right? It's not tacked onto the payment automatically like HST is? Yes I know it's a stupid question but the teller wanted me to get the hell out...
if you make a cash advance or make a cash advance like transaction then the interest will be accumulating right away.
for your regular purchases you have a grace period so when u get your statement within that period you can pay everything off by the due due and there won't be any interest on that.
if you just make your minimum payment and there's still a balance then u could get hit with that interest once you bought it, fair enough?
the way interest works is that it's calculated daily it's not really tacked on like tax.
if you make a cash advance or make a cash advance like transaction then the interest will be accumulating right away.
for your regular purchases you have a grace period so when u get your statement within that period you can pay everything off by the due due and there won't be any interest on that.
if you just make your minimum payment and there's still a balance then u could get hit with that interest once you bought it, fair enough?
the way interest works is that it's calculated daily it's not really tacked on like tax.
CPP Eligibility
How does working in the USA effect CPP? If I worked for 10-20 years in Canada then 10-15 in the US am I still eligible for something in Canada. I know I get US social security for those years. FYI...I live in Canada, commute to Detroit, file taxes every year in both countries.
Working in the US is going to reduce your CPP. Your CPP benefits are calculated based on how much you pay into the plan.
But as long as you make 1 payment to the CPP, you qualify for a CPP pension. Obviously though, in this example your pension would be extremely small.
And just to add to this, you would appear to qualify for full OAS (Old Age Security). OAS just requires living in Canada. To get full OAS you need to live in Canada for 40 years between the age of 18 and 65. I'm about 99.9999% positive the fact that you work in the US won't matter. They only care about the fact that you live in Canada.
And although it doesn't appear to apply to you, I might as well add that Canada and the US have an agreement about social security plans. This could come into effect if you just barely miss qualifying for one plan.
http://www.servicecanada.gc.ca/eng/i...fa/usa-i.shtml
For example you need 10 years of work to qualify for Social Security in the US. If have only worked for 9 years in the US, you could transfer some of your Canadian years to ensure you meet the qualification for the US.
The same is true of OAS in Canada. You need to live in Canada for 10 years to qualify for the minimum. If you lived in Canada for 9 years, you could transfer 1 year of residency in the US to reach the minimum in Canada.
With that being said, if you qualify for the minimum in both countries you can't do any transfers. So if you lived in Canada for 20 years and the US for 20 years, you can't transfer the 20 US years to qualify for the maximum OAS (which requires living in Canada for 40 years). You can only transfer years to reach the minimum.
But like I said I don't expect this will effect you, since you appear you will have reached the minimum in both countries.
Working in the US is going to reduce your CPP. Your CPP benefits are calculated based on how much you pay into the plan.
But as long as you make 1 payment to the CPP, you qualify for a CPP pension. Obviously though, in this example your pension would be extremely small.
And just to add to this, you would appear to qualify for full OAS (Old Age Security). OAS just requires living in Canada. To get full OAS you need to live in Canada for 40 years between the age of 18 and 65. I'm about 99.9999% positive the fact that you work in the US won't matter. They only care about the fact that you live in Canada.
And although it doesn't appear to apply to you, I might as well add that Canada and the US have an agreement about social security plans. This could come into effect if you just barely miss qualifying for one plan.
http://www.servicecanada.gc.ca/eng/i...fa/usa-i.shtml
For example you need 10 years of work to qualify for Social Security in the US. If have only worked for 9 years in the US, you could transfer some of your Canadian years to ensure you meet the qualification for the US.
The same is true of OAS in Canada. You need to live in Canada for 10 years to qualify for the minimum. If you lived in Canada for 9 years, you could transfer 1 year of residency in the US to reach the minimum in Canada.
With that being said, if you qualify for the minimum in both countries you can't do any transfers. So if you lived in Canada for 20 years and the US for 20 years, you can't transfer the 20 US years to qualify for the maximum OAS (which requires living in Canada for 40 years). You can only transfer years to reach the minimum.
But like I said I don't expect this will effect you, since you appear you will have reached the minimum in both countries.
Declaring wire transfer cash to/from foreign country over $10k
I am aware we are suppose to report transfer of funds to other countries over $10000. When we wire cash, does the bank automatically report it?
I am in a situation where I used Citizen Bank (used to be a subsidy of Vancity Credit Union) but they went under. I used citizen bank to wire $30K - lending my funds to my relative in Hong Kong and I did not report it.
My relative is ready to return my cash but I dont know how the records will look like. Since Citizen Bank is no longer active, I will need to use another financial institute to receive the cash. Will the CRA be up in my case since I dont have proper record of lending the money out in the 1st place?
Yes, the bank reports it. I can confirm as I work for a bank in the wire payments unit.
The reporting is not done manually. The banking system automatically identifies accounts with combined transactions of $10K or more per day. And reporting is nothing to be afraid of unless the source of your money is illegal or the money is used for sponsoring illegal activities. Combined transactions of more than $10k per day can consist of $2k withdrawal, $2k cheque deposit, $2k outgoing wire transfer, $2k internal transfer to another bank account, and $2k email transfer received into the account, all on the same day.
Even if your combined transactions per day is not more than $10k, your account may still be flagged and/or reported to the government if anyone in the bank from tellers to account internal audit people think your activities are suspicious.
I am in a situation where I used Citizen Bank (used to be a subsidy of Vancity Credit Union) but they went under. I used citizen bank to wire $30K - lending my funds to my relative in Hong Kong and I did not report it.
My relative is ready to return my cash but I dont know how the records will look like. Since Citizen Bank is no longer active, I will need to use another financial institute to receive the cash. Will the CRA be up in my case since I dont have proper record of lending the money out in the 1st place?
Yes, the bank reports it. I can confirm as I work for a bank in the wire payments unit.
The reporting is not done manually. The banking system automatically identifies accounts with combined transactions of $10K or more per day. And reporting is nothing to be afraid of unless the source of your money is illegal or the money is used for sponsoring illegal activities. Combined transactions of more than $10k per day can consist of $2k withdrawal, $2k cheque deposit, $2k outgoing wire transfer, $2k internal transfer to another bank account, and $2k email transfer received into the account, all on the same day.
Even if your combined transactions per day is not more than $10k, your account may still be flagged and/or reported to the government if anyone in the bank from tellers to account internal audit people think your activities are suspicious.
Gold Jewelry as Collateral
Hi Guys,
I need some advice regarding putting the jewelry as collateral. Can someone let me know as to what is the best way to use jewelry as collateral for a secured line of credit or loan. Any idea as which banks offer this product or what the good offers (in terms of interest rate or % of value given) might be?
Thanks.
No bank will take Gold Jewelry as Collateral. Maybe gold ingot... but that's a long shot.
What you're looking for is a pawn shop.
I need some advice regarding putting the jewelry as collateral. Can someone let me know as to what is the best way to use jewelry as collateral for a secured line of credit or loan. Any idea as which banks offer this product or what the good offers (in terms of interest rate or % of value given) might be?
Thanks.
No bank will take Gold Jewelry as Collateral. Maybe gold ingot... but that's a long shot.
What you're looking for is a pawn shop.
PC Financial Master card cancelled my card
Hey, so I called PC mastecard and apparently they cancelled my card because of my credit score, they never notified me about this and I only found out when I called as my Card stopped working. I never missed a payment for all of my credit accounts, I went to transunion and got a copy of my credit profile, and its green across all payents for all credit cards, my score however is not as high as expected (588) possibly because it shows a 31 000 loan from OSAP even though I am still in school. Question I had is, is PC FINANCIAL able to cancel my card just like that, and is OSAP supposed be showing up in there even though I am still in school and haven't even started making payments to it
Thanks
Yes, they can cancel your card whenever they want for whatever reason or no reason. But there is no doubt, your score would be affected by osap. It's likely they saw your credit amount and utilization just skyrocket.
It's obvious there is something there that is killing your score. Did you go on an application spree or something? Even then, a pile of hard inquiries won't drop your score to that level unless your score was pretty low to begin with. A handful of new accounts might make it drop, but once again it must have been quite low to begin with to get into the high-500s territory.
The fact they cancelled it outright tells me that PCF was quite concerned and there must be something on your report that spooked them. If they cut your limit then that's one thing, but to completely cancel your account is another thing entirely.
Thanks
Yes, they can cancel your card whenever they want for whatever reason or no reason. But there is no doubt, your score would be affected by osap. It's likely they saw your credit amount and utilization just skyrocket.
It's obvious there is something there that is killing your score. Did you go on an application spree or something? Even then, a pile of hard inquiries won't drop your score to that level unless your score was pretty low to begin with. A handful of new accounts might make it drop, but once again it must have been quite low to begin with to get into the high-500s territory.
The fact they cancelled it outright tells me that PCF was quite concerned and there must be something on your report that spooked them. If they cut your limit then that's one thing, but to completely cancel your account is another thing entirely.
Can CMHC charge me a fee because of the size of the house?
just wondering if i was to buy a property that is under 1000sq ft and put 20 percent down can CMHC charge me a fee because of the size of the house?
i bought a property almost 1 year ago and basically had to pay approx $1,800 more because the house was under 1,000sq ft.
That was your bank's requirement, not CMHC.
If you are putting 20% down then CMHC would not come in to picture and it would depend on the banks policy on lending on condo/houses for a lower square foot area. Some banks may have restrictions on landing on any condo below 650 sq ft. so if the area is over that you should be fine.
i bought a property almost 1 year ago and basically had to pay approx $1,800 more because the house was under 1,000sq ft.
That was your bank's requirement, not CMHC.
If you are putting 20% down then CMHC would not come in to picture and it would depend on the banks policy on lending on condo/houses for a lower square foot area. Some banks may have restrictions on landing on any condo below 650 sq ft. so if the area is over that you should be fine.
Insurance Expert Needed - Evidence of Insurability
So we're having an interesting discussion about our benefits here at work.
The question came up about what "Evidence of Insurability" really means.
Background: our group insurance company (Sun Life) is offering Critical Illness Insurance without "evidence of insurability" up to a certain amount $25K. The disclaimer is that should a critical illness present itself within the first 12 months of coverage starting, no benefits would be paid.
This concept, we understand. Assuming the premium to buy this coverage is worth it, the debate is the following:
Say 15 months down the road, after the 12 month period has elapsed, someone get's diagnosed with a critical illness, some of my co-workers believe that the insurance company will pull all strings to show that there was some underlying condition that occurred within the first 12 months that could have caused the critical illness.
But my argument is, say someone is freshly diagnosed with a critical illness in that 15th month (like cancer or something), for which there was no medical evidence for before - should that even be an issue.
I guess they're just thinking it might be a too good to be true offer.
Any insurance experts to chime in?
THIS IS THE DISCLAIMER:
*** For any coverage that did not require evidence of insurability ($50,000 or less, and/or any
dependent child coverage), no benefit is payable for any covered condition that occurs within
12 months after the effective date of the insured person’s coverage, and that resulted from
any injury, sickness or medical condition (whether or not diagnosed) for which, during the 12
months prior to the effective date of insurance, the insured person:
• had symptoms
• consulted a physician or other health care practitioner, or
• was provided any health-related care, advice or treatment, or that a reasonably prudent
person, with such injury, sickness or medical condition, would have consulted a physician or
any other health care practitioner.
This is all pretty standard, including the 12 month waiting period, the Non-Evidence Maximum (NEM), and the requirement to fill out an Evidence of Insurability form. The idea of the Evidence of Insurability form is simply to get you to answer as many questions as possible about your history and lifestyle. The insurance company isn't really interested in what you answered on the form until you have a claim. Then they will go over it with a fine-tooth comb and look for any slight falsehood or inaccuracy as a basis for denying your claim. The more things they ask, the more difficult it is to dig up accurate answers, and the more intrusive and embarrassing they can make the questions, the greater the chance that you will fib or get something slightly wrong.
Hi There,
I've been a licensed insurance broker for a number of years now and have much experience dealing with group and individual plans.
What I'm picking up from the questions is that you want a reasonable level of certainty that if you were to claim at some point in the not-so-distant future, can the claim be denied.
The simple answer is YES! Your claim can ALWAYS be denied when you do not have an actual policy contract! The other poster is correct in regards to creditor insurance and mortgage insurance...the same is true for group insurance. You are not the policy owner and you won't have a policy contract (which is a legally binding contract, underwritten and approved prior to the commencement of coverage).
I represent insurance companies and use their products each day and they are in the business of making money and will avoid a claim however they can. That being said...Group insurance (critical illness included) is good but it should not be primary instrument for proper risk management.
That's my 2 cents. I hope that it helps.
If you ever have any other questions and want unbiased advice, feel free to submit a question to www.canadianlifequotes.com/contact
The question came up about what "Evidence of Insurability" really means.
Background: our group insurance company (Sun Life) is offering Critical Illness Insurance without "evidence of insurability" up to a certain amount $25K. The disclaimer is that should a critical illness present itself within the first 12 months of coverage starting, no benefits would be paid.
This concept, we understand. Assuming the premium to buy this coverage is worth it, the debate is the following:
Say 15 months down the road, after the 12 month period has elapsed, someone get's diagnosed with a critical illness, some of my co-workers believe that the insurance company will pull all strings to show that there was some underlying condition that occurred within the first 12 months that could have caused the critical illness.
But my argument is, say someone is freshly diagnosed with a critical illness in that 15th month (like cancer or something), for which there was no medical evidence for before - should that even be an issue.
I guess they're just thinking it might be a too good to be true offer.
Any insurance experts to chime in?
THIS IS THE DISCLAIMER:
*** For any coverage that did not require evidence of insurability ($50,000 or less, and/or any
dependent child coverage), no benefit is payable for any covered condition that occurs within
12 months after the effective date of the insured person’s coverage, and that resulted from
any injury, sickness or medical condition (whether or not diagnosed) for which, during the 12
months prior to the effective date of insurance, the insured person:
• had symptoms
• consulted a physician or other health care practitioner, or
• was provided any health-related care, advice or treatment, or that a reasonably prudent
person, with such injury, sickness or medical condition, would have consulted a physician or
any other health care practitioner.
This is all pretty standard, including the 12 month waiting period, the Non-Evidence Maximum (NEM), and the requirement to fill out an Evidence of Insurability form. The idea of the Evidence of Insurability form is simply to get you to answer as many questions as possible about your history and lifestyle. The insurance company isn't really interested in what you answered on the form until you have a claim. Then they will go over it with a fine-tooth comb and look for any slight falsehood or inaccuracy as a basis for denying your claim. The more things they ask, the more difficult it is to dig up accurate answers, and the more intrusive and embarrassing they can make the questions, the greater the chance that you will fib or get something slightly wrong.
Hi There,
I've been a licensed insurance broker for a number of years now and have much experience dealing with group and individual plans.
What I'm picking up from the questions is that you want a reasonable level of certainty that if you were to claim at some point in the not-so-distant future, can the claim be denied.
The simple answer is YES! Your claim can ALWAYS be denied when you do not have an actual policy contract! The other poster is correct in regards to creditor insurance and mortgage insurance...the same is true for group insurance. You are not the policy owner and you won't have a policy contract (which is a legally binding contract, underwritten and approved prior to the commencement of coverage).
I represent insurance companies and use their products each day and they are in the business of making money and will avoid a claim however they can. That being said...Group insurance (critical illness included) is good but it should not be primary instrument for proper risk management.
That's my 2 cents. I hope that it helps.
If you ever have any other questions and want unbiased advice, feel free to submit a question to www.canadianlifequotes.com/contact
Critical Life Insurance-Thoughts?
What are your thoughts on Critical Life Insurance?
We're renewing our mortgage and the bank is offering Critical Life Insurance.
We already have a 25 year term Life Insurance with RBC For a million.
thoughts on Critical?
It's been said many times at RFD that any insurance offered through the bank (at the branch level) is not a good idea. This is because of "post claim underwriting" which means that at the time of claim the insurance company will try and find a way out of paying the claim. Life Insurance (and critical illness and disability) should be obtained with the help of a trustworthy licensed professional. It's also recommend to use an "independent" advisor who is able to provide you with multiple competitive quotes. This will ensure that you get the proper insurance at the best price.
Also, for the record, any insurance offered at the bank branch is almost always more expensive than a policy obtained from an independent broker.
For more info on critical illness insurance (a "crash course") check out the link... here.
We're renewing our mortgage and the bank is offering Critical Life Insurance.
We already have a 25 year term Life Insurance with RBC For a million.
thoughts on Critical?
It's been said many times at RFD that any insurance offered through the bank (at the branch level) is not a good idea. This is because of "post claim underwriting" which means that at the time of claim the insurance company will try and find a way out of paying the claim. Life Insurance (and critical illness and disability) should be obtained with the help of a trustworthy licensed professional. It's also recommend to use an "independent" advisor who is able to provide you with multiple competitive quotes. This will ensure that you get the proper insurance at the best price.
Also, for the record, any insurance offered at the bank branch is almost always more expensive than a policy obtained from an independent broker.
For more info on critical illness insurance (a "crash course") check out the link... here.
PRIMERICA life insurance?
i know about their sales approach but that's not what im asking
im asking if anyone has any experience with their life insurance policy which is currently the cheapest for me and bf and have somehat more lenient rules
their prices rank "cheaper" because not many companies compete on term-30 or term-25 basis.
I've replaced a few primerica policies over the years because the polices are falsely sold as Term-to-age-95 but the client is never informed on the annually increasing insurance charges after year 30.
The real issue... All other insurance companies carry a renewal and conversion priviledge...Primerica has NOTHING of value for the consumer to renew or convert to. This will price you out of the policy and thereby stuffing the company's pockets because they rarely have to pay any claims.
p.s. they will try and get your all your business too....mortgage, investments, insurance, etc...
p.p.s most sales people at primerica are "part-time" which means that they probably won't be your advisor (using the term loosely) for long...BUT they came with a great script and presentation and they bashed the bank and they talked about a "rule of 72"...etc... lol
Plus you get features like "Terminal Illness" (same as Primerica) where if you know you are going to die within 6 months (with proof), you can take out 40% of the coverage amount.
That sounds like an AXA policy. An interesting feature but what people don't understand is that if they took the terminal illness claim, it may treated as a loan from the insurance company and interest will be payable (I know that Primerica does this for sure...any way to get something back in their pocket)
Also it's misleading because a person may now stay away from critical illness insurance thinking that they have coverage.
NOTE:
Critical Accident
Terminal Illness
If you have any of these 2, then you DO NOT have Critical Illness insurance, which protects you in the event of a diagnosis of a number of conditions. The 2 above are very difficult to claim and you pretty much have to have one foot in the grave to so so...(have fun fighting with an insurance company then).
im asking if anyone has any experience with their life insurance policy which is currently the cheapest for me and bf and have somehat more lenient rules
their prices rank "cheaper" because not many companies compete on term-30 or term-25 basis.
I've replaced a few primerica policies over the years because the polices are falsely sold as Term-to-age-95 but the client is never informed on the annually increasing insurance charges after year 30.
The real issue... All other insurance companies carry a renewal and conversion priviledge...Primerica has NOTHING of value for the consumer to renew or convert to. This will price you out of the policy and thereby stuffing the company's pockets because they rarely have to pay any claims.
p.s. they will try and get your all your business too....mortgage, investments, insurance, etc...
p.p.s most sales people at primerica are "part-time" which means that they probably won't be your advisor (using the term loosely) for long...BUT they came with a great script and presentation and they bashed the bank and they talked about a "rule of 72"...etc... lol
Plus you get features like "Terminal Illness" (same as Primerica) where if you know you are going to die within 6 months (with proof), you can take out 40% of the coverage amount.
That sounds like an AXA policy. An interesting feature but what people don't understand is that if they took the terminal illness claim, it may treated as a loan from the insurance company and interest will be payable (I know that Primerica does this for sure...any way to get something back in their pocket)
Also it's misleading because a person may now stay away from critical illness insurance thinking that they have coverage.
NOTE:
Critical Accident
Terminal Illness
If you have any of these 2, then you DO NOT have Critical Illness insurance, which protects you in the event of a diagnosis of a number of conditions. The 2 above are very difficult to claim and you pretty much have to have one foot in the grave to so so...(have fun fighting with an insurance company then).
Books on tax?
I'm trying to get acquainted with the Canadian tax system. I might even take some courses in the next two months. What books can I read that would give me a good base? I will be taking university taxation courses in a year and I admit that as of right now, I'm not even sure how and when taxes are due. I don't know how tax refunds work. I feel so dumb in this area. I want to be an expert in this.
Any suggestions on books are very welcome. I tried going to the CRA website but it's all about how an individual files his/her own tax return as opposed to learning the basics.
Any suggestions on where to start? Book recommendations would be very awesome
KPMG's Tax Planning for You and Your Family
http://www.chapters.indigo.ca/books/...8777-item.html
I've been using their books for years in my business and they're usually required reading for anyone doing a Financial Planning course.
Byrd and Chen - Cdn Tax principles
http://www.pearsoned.ca/highered/div...hen/index.html
Books are ok to get an idea about the principles involved, but the only way to really understand taxes is to complete a number of returns.
I also reccommend doing the returns by HAND to start, not with a computer program. Doing them by hand really hammers home the concepts and helps you remember the topics.
Any suggestions on books are very welcome. I tried going to the CRA website but it's all about how an individual files his/her own tax return as opposed to learning the basics.
Any suggestions on where to start? Book recommendations would be very awesome
KPMG's Tax Planning for You and Your Family
http://www.chapters.indigo.ca/books/...8777-item.html
I've been using their books for years in my business and they're usually required reading for anyone doing a Financial Planning course.
Byrd and Chen - Cdn Tax principles
http://www.pearsoned.ca/highered/div...hen/index.html
Books are ok to get an idea about the principles involved, but the only way to really understand taxes is to complete a number of returns.
I also reccommend doing the returns by HAND to start, not with a computer program. Doing them by hand really hammers home the concepts and helps you remember the topics.
condo investment question
I have $30000 down payment for a condo. I want to buy a condo that costs about $280,000. I can rent out for about $1400/month
I want to hold the property for about 5 years, does this investment make sense? I understand I will have negative cash flows every month. Has anyone ever done this and come out ahead?
Yonge/Sheppard area.
thanks
In which universe does a cash flow negative depreciating asset make any sense at all?
You cannot buy a $280,000 investment property if you only have $30,000 cash. For investment properties you must put 20% down so the most expensive condo you can get a mortgage for is $150,000.
Secondly an investment property with negative cash flow is never a good idea. Why would you want to subsidize someone else's living expenses?
Save $60,000 and don't buy the most expensive place you can afford. Unless you have a debt ratio of under 50% (meaning you can save over 50% of your income) than try to get a smaller mortgage than will be covered by the rent (with income to spare).
So if mortgage + fees and maintenance = 1400, and you can only rent for 1400/m (MAX) this is bad.
but if total mtg is under $1100/m, than this is better.
If you don't want to wait to buy a place, you will be forced to only afford a $150k property like someone else mentioned. So I hope you live in a cheap city (not toronto, montreal, vancouver, etc)
I am currently saving up enough for rental property as well as a large emergency fund.
I want to hold the property for about 5 years, does this investment make sense? I understand I will have negative cash flows every month. Has anyone ever done this and come out ahead?
Yonge/Sheppard area.
thanks
In which universe does a cash flow negative depreciating asset make any sense at all?
You cannot buy a $280,000 investment property if you only have $30,000 cash. For investment properties you must put 20% down so the most expensive condo you can get a mortgage for is $150,000.
Secondly an investment property with negative cash flow is never a good idea. Why would you want to subsidize someone else's living expenses?
Save $60,000 and don't buy the most expensive place you can afford. Unless you have a debt ratio of under 50% (meaning you can save over 50% of your income) than try to get a smaller mortgage than will be covered by the rent (with income to spare).
So if mortgage + fees and maintenance = 1400, and you can only rent for 1400/m (MAX) this is bad.
but if total mtg is under $1100/m, than this is better.
If you don't want to wait to buy a place, you will be forced to only afford a $150k property like someone else mentioned. So I hope you live in a cheap city (not toronto, montreal, vancouver, etc)
I am currently saving up enough for rental property as well as a large emergency fund.
New Ownership Costs
I just received my first utilities bill today from Ontario PUC and there was a charge for 'Home Occupancy' - $30.00 and 'Deposit' - $200.00! I'm a bit stunned by this because I wasn't expecting to pay a $200.00 deposit, and I don't even know what it's for.
I bought a new home (re-sale) about a month ago so this is all new for me especially all of these 'Administrative Charges' for changing my name to the new address. I had to pay the City of Oshawa $10.00, and another $25.00 to Hydro to change my name to the new address. I think it's a bit ridiculous to pay all these administrative fees. It's not cheap. They add up - in my case, $65.00 just to change ownership!
Does anyone know what the $200 deposit is for, and do all new owners have to pay this?
Thanks.
I bought a new home (re-sale) about a month ago so this is all new for me especially all of these 'Administrative Charges' for changing my name to the new address. I had to pay the City of Oshawa $10.00, and another $25.00 to Hydro to change my name to the new address. I think it's a bit ridiculous to pay all these administrative fees. It's not cheap. They add up - in my case, $65.00 just to change ownership!
Does anyone know what the $200 deposit is for, and do all new owners have to pay this?
Thanks.
When I bought my house, both the gas and hydro companies required a deposit. However the gas company waived the deposit if I signed up for pre-authorized payments, and the hydro company waived the deposit if I provided a credit report.
They're not trying to screw you, they just want to protect themselves (ie: you use a lot of utilities over a period of 3 months and don't pay, they could be out a lot of money).
Ontario Hydro (Hydro One - EDIT) told me that I have to pay a $200 security deposit but I would get it back at the end of the year with interest. They just want to be sure you don't default on your payments or anything like that.
The only way I was able to get out of it was by doing pre-authorized payments and equal billing. I chose to pay the $200 bucks as I don't like the fact that Ontario Hydro could potentially have $100s of my dollars sitting in their bank account collecting interest instead of mine. I'd rather leave it at $200 and get it back next year.
What's going on with Diners Club Mastercard?
Hi everyone,
I recently visited the DC website and noticed that there's no way to apply for the card right now. Strange.
I did some further digging and found out that while it says on the wesbite that the company is owned by Citibank, recently reports online suggest that BMO MC has purchased the company - so perhaps that's it -
Does anyone know if this card is being cancelled or on hold or something?
(Reason: I'm asking is that this seems to be the only non-Amex card other than CIBC that you can get free lounge access). :P
You have to buy that lounge access with the CIBC cards. so that is not free either. Try BMO elite card, get 3 free lounge visits yearly. Only other non-amex I can think of is MBNA Alaska Airline, gives 2 free passes, but I believe that is only a one time sign-up bonus thing only, so BMO elite is probably your best bet for non-amex lounge access
For at least 6 years now, Diner's Club Canada and Diner's Club USA have been closed to new applications from individuals. This is because Citi decided to focus on their Corporate clients for this card to the exclusion of individuals. If you already had a DC card as an individual you got to keep it, but they refused any new applicants that were not corporate accounts.
Diner's Club USA (which includes Diner's Club Canada, and is different from Diner's Club International) was bought by BMO specifically for the corporate card business. There is no indication whatsoever that BMO intends to offer DC cards to consumers again, and in fact they've made every indication that their goal is to continue to expand their corporate client base.
It is possible that they may open it up to consumers again, but it is more likely that they will keep the status quo, and focus solely on corporate clients.
The cards they want to compete with are these, which are the two players in Canada at the corporate level:
AmEx Canada Corporate Cards & USBank Canada Corporate Cards
I recently visited the DC website and noticed that there's no way to apply for the card right now. Strange.
I did some further digging and found out that while it says on the wesbite that the company is owned by Citibank, recently reports online suggest that BMO MC has purchased the company - so perhaps that's it -
Does anyone know if this card is being cancelled or on hold or something?
(Reason: I'm asking is that this seems to be the only non-Amex card other than CIBC that you can get free lounge access). :P
You have to buy that lounge access with the CIBC cards. so that is not free either. Try BMO elite card, get 3 free lounge visits yearly. Only other non-amex I can think of is MBNA Alaska Airline, gives 2 free passes, but I believe that is only a one time sign-up bonus thing only, so BMO elite is probably your best bet for non-amex lounge access
For at least 6 years now, Diner's Club Canada and Diner's Club USA have been closed to new applications from individuals. This is because Citi decided to focus on their Corporate clients for this card to the exclusion of individuals. If you already had a DC card as an individual you got to keep it, but they refused any new applicants that were not corporate accounts.
Diner's Club USA (which includes Diner's Club Canada, and is different from Diner's Club International) was bought by BMO specifically for the corporate card business. There is no indication whatsoever that BMO intends to offer DC cards to consumers again, and in fact they've made every indication that their goal is to continue to expand their corporate client base.
It is possible that they may open it up to consumers again, but it is more likely that they will keep the status quo, and focus solely on corporate clients.
The cards they want to compete with are these, which are the two players in Canada at the corporate level:
AmEx Canada Corporate Cards & USBank Canada Corporate Cards
PC MC Disputed transactions
Today when checking my online credit card statements I noticed 2 suspicious activities on my card (amount is less than <$200) and happened within this month. The card seemed to be used to purchase gasoline in GTA.
I reported this and they said that they are going to investigate and will send me a new card right away.
My question is: I've not used this particular card for any retail transaction for at least months (since I've used by CapOne Aspire One as my primary card) in any retail, how could this happen? My next question is, are people that *stupid* in a sense that they use it on a gas station which has surveillance camera all over the place?
Is this kind of random occurrence happens to everyone once in a while? is it common?
Finally, how long investigations will take place normally?
Thanks!
Your card probably got skimmed some months ago.
Maybe they are using the card to fill up gas for stolen cars, or they are just going in and buying gift cards, cigs, etc, without driving up to a pump?
This kind of thing thrives because
A. "Zero liability" provisions in credit card contracts insulate individuals from risks of having their credit card info stolen or misused. There is not much incentive for people to put much effort into protecting their CC information. Older people seem to have less trust in this system, while younger people tend to be much looser with their credit cards, trusting that they are protected from fraud.
B. Credit card companies largely just write off fraudulent charges that are small enough. For less than $200 bucks, its not really worth it for them to pay someone to investigate it for even a few hours. They might file a police report, but unless they can connect it to a larger group of fraudulent charges, they wont be putting much time into it.
I reported this and they said that they are going to investigate and will send me a new card right away.
My question is: I've not used this particular card for any retail transaction for at least months (since I've used by CapOne Aspire One as my primary card) in any retail, how could this happen? My next question is, are people that *stupid* in a sense that they use it on a gas station which has surveillance camera all over the place?
Is this kind of random occurrence happens to everyone once in a while? is it common?
Finally, how long investigations will take place normally?
Thanks!
Your card probably got skimmed some months ago.
Maybe they are using the card to fill up gas for stolen cars, or they are just going in and buying gift cards, cigs, etc, without driving up to a pump?
This kind of thing thrives because
A. "Zero liability" provisions in credit card contracts insulate individuals from risks of having their credit card info stolen or misused. There is not much incentive for people to put much effort into protecting their CC information. Older people seem to have less trust in this system, while younger people tend to be much looser with their credit cards, trusting that they are protected from fraud.
B. Credit card companies largely just write off fraudulent charges that are small enough. For less than $200 bucks, its not really worth it for them to pay someone to investigate it for even a few hours. They might file a police report, but unless they can connect it to a larger group of fraudulent charges, they wont be putting much time into it.
Help with Non-Vested "defined contribution pension plan"
Hi Everyone,
I am hoping someone can help me out. I recently left my company before 2 years and lost my vested "defined contribution pension plan" bastards. I now have about 7K in a non-vested "defined contribution pension plan" and have been reading I can take it as cash. Just wondering if I pay tax in this amount if I do take it out in cash. If I transfer it to a RRSP can i use it in my taxes this year?
What is my best option.
Thanks T
I think you have it backwards. Vesting means you are entitled to it. The pension amount you lost when you left your job is non-vested. So if the 7K you have now, you get if you quit, it is considered vested. In terms of cashing out, you can only do so if it is not locked in. If its locked in, you can transfer it into a LIRA.
You are correct both are non-vested. If I cash out will I have to pay taxes? If I decide to place it in a rrsp can I put that on my taxes?
Ok, I think I get what your situation is, correct me if I am wrong. You recently quit and you lost your employer contributions into the pension, the 7K that you have are your contributions. The 7K is most probably non-locked in because it was less than 2 years.
Your pension contributions are already in a tax sheltered account. If you cash out you will pay taxes on it. And if you end up putting into an RRSP you will get a deduction. Be aware that the tax credit you get from the RRSP contribution may be less than the taxes you owe on the amount, depending on what your personal income tax rate is.
How long did you have to go before you hit the two year mark? Do you know how much you lost from the employer's side of the contribution? Anyway.....
You got a tax deduction when you put your portion of the contribution in the plan. If you take your contributions out in cash, then you have to pay income tax on the withdrawal.
You should be able to transfer the funds to your RRSP on a tax free basis. Talk to your RRSP provider, they should know about the forms to use. Note - you don't get an additional deduction for the RRSP contribution, you already got the deduction when you put the money in the pension plan.
I would not suggest taking the cash, you will lose money as you will pay income tax at your marginal rate. Not only have you unfortunately lost all of your employer's contributions to the PP on your behalf, you'll also have lost tax dollars.
I am hoping someone can help me out. I recently left my company before 2 years and lost my vested "defined contribution pension plan" bastards. I now have about 7K in a non-vested "defined contribution pension plan" and have been reading I can take it as cash. Just wondering if I pay tax in this amount if I do take it out in cash. If I transfer it to a RRSP can i use it in my taxes this year?
What is my best option.
Thanks T
I think you have it backwards. Vesting means you are entitled to it. The pension amount you lost when you left your job is non-vested. So if the 7K you have now, you get if you quit, it is considered vested. In terms of cashing out, you can only do so if it is not locked in. If its locked in, you can transfer it into a LIRA.
You are correct both are non-vested. If I cash out will I have to pay taxes? If I decide to place it in a rrsp can I put that on my taxes?
Ok, I think I get what your situation is, correct me if I am wrong. You recently quit and you lost your employer contributions into the pension, the 7K that you have are your contributions. The 7K is most probably non-locked in because it was less than 2 years.
Your pension contributions are already in a tax sheltered account. If you cash out you will pay taxes on it. And if you end up putting into an RRSP you will get a deduction. Be aware that the tax credit you get from the RRSP contribution may be less than the taxes you owe on the amount, depending on what your personal income tax rate is.
How long did you have to go before you hit the two year mark? Do you know how much you lost from the employer's side of the contribution? Anyway.....
You got a tax deduction when you put your portion of the contribution in the plan. If you take your contributions out in cash, then you have to pay income tax on the withdrawal.
You should be able to transfer the funds to your RRSP on a tax free basis. Talk to your RRSP provider, they should know about the forms to use. Note - you don't get an additional deduction for the RRSP contribution, you already got the deduction when you put the money in the pension plan.
I would not suggest taking the cash, you will lose money as you will pay income tax at your marginal rate. Not only have you unfortunately lost all of your employer's contributions to the PP on your behalf, you'll also have lost tax dollars.
IQOR collection agency suddenly showing on TransUnion report
I reviewed my credit report today because I was having something corrected, that's all fixed, but now I'm seeing a collection agency reporting for Rogers that wasn't there when I last reviewed my report.
I had a bill go to collections from Rogers and that was paid off to the collection agency - they're reporting it paid and balance of $0, so that's fine. But now another agency, IQOR, is reporting the same amount balance that was paid at a date before the agency that I paid had reported the collection. IQOR is reporting the collection as closed and non-deliquent but reporting the full balance that was owed.
My credit report is taking this balance into account when reporting my total out-standing balances owed.
Should I call this IQOR agency to see what's up or just have TransUnion investigate it?
Anyone seen IQOR pop up on their reports?
I doubt Rogers will still have the account on file but should I take it up with them or follow up with the agency that I paid?
Thanks for the help.
Do a google search for Iqor Canada. They are about as shady and crooked a company as it gets. You will never be rid of them. I've been fighting them for a year over an unpaid Rogers bill that does not belong to me in any way shape or form since I have never been a Rogers customer. No matter how many times I've called them to have it removed, and no matter how many times they tell me that they're sorry for my inconvenience, I still get 10 phone calls from them a day. I've reported them to any and all government agencies or ministries, federal and provincial, that have anything at all to do with collection agencies, telemarketers, etc, with well documented evidence that this is not my bill and that they are harassing me illegally, but nothing ever comes of it. Once Iqor gets its claws in you, you will never be rid of them.
Ugh. I hate that company.
They showed up on my report and I wasn't aware of it until I applied for a mortgage. It was $40 or somewhere around there. And TD wouldn't budge, "get it off there or no mortgage...we need a receipt or some other proof of payment".
It wasn't mine. It was for some Bell ExpressVu bill and I didn't subscribe to them at the time. It's a wonder it doesn't happen to me more often because both my first and last names are extremely popular for a guy born in the 1960's in Canada.
Anyways, for $40 I wasn't going to fight it. I needed the mortgage. Now. So I called the number that was provided on my Tranunion credit report. I've said it before and I'll say it again - Iqor is run by a bunch of drunken frat boys. Seriously. I swear there was a college party going on in the background and the guy I spoke to always had his attention divided between my call and the party going on. He wasn't foreign or anything like that. He spoke perfect English, but was half drunk.
He gave me my reference number and a bank account and routing number. He told me to go to any CIBC branch and have them deposit the funds into that account. The receipt the teller will give me will serve as proof of payment.
For $40 I didn't care. So that's what I did. Time was critical.
I took the receipt to TD and told them the same story. They didn't look convinced at first, but I told them to call that number and verify that is how Iqor wanted it done. After talking to Iqor my TD rep just rolled her eyes and said "yeah, they're shady all right." They gave me the mortgage.
The next month when I checked my credit report the Iqor reference was completely gone. Wiped clean. No derogatory history or anything was left.
I had a bill go to collections from Rogers and that was paid off to the collection agency - they're reporting it paid and balance of $0, so that's fine. But now another agency, IQOR, is reporting the same amount balance that was paid at a date before the agency that I paid had reported the collection. IQOR is reporting the collection as closed and non-deliquent but reporting the full balance that was owed.
My credit report is taking this balance into account when reporting my total out-standing balances owed.
Should I call this IQOR agency to see what's up or just have TransUnion investigate it?
Anyone seen IQOR pop up on their reports?
I doubt Rogers will still have the account on file but should I take it up with them or follow up with the agency that I paid?
Thanks for the help.
Do a google search for Iqor Canada. They are about as shady and crooked a company as it gets. You will never be rid of them. I've been fighting them for a year over an unpaid Rogers bill that does not belong to me in any way shape or form since I have never been a Rogers customer. No matter how many times I've called them to have it removed, and no matter how many times they tell me that they're sorry for my inconvenience, I still get 10 phone calls from them a day. I've reported them to any and all government agencies or ministries, federal and provincial, that have anything at all to do with collection agencies, telemarketers, etc, with well documented evidence that this is not my bill and that they are harassing me illegally, but nothing ever comes of it. Once Iqor gets its claws in you, you will never be rid of them.
Ugh. I hate that company.
They showed up on my report and I wasn't aware of it until I applied for a mortgage. It was $40 or somewhere around there. And TD wouldn't budge, "get it off there or no mortgage...we need a receipt or some other proof of payment".
It wasn't mine. It was for some Bell ExpressVu bill and I didn't subscribe to them at the time. It's a wonder it doesn't happen to me more often because both my first and last names are extremely popular for a guy born in the 1960's in Canada.
Anyways, for $40 I wasn't going to fight it. I needed the mortgage. Now. So I called the number that was provided on my Tranunion credit report. I've said it before and I'll say it again - Iqor is run by a bunch of drunken frat boys. Seriously. I swear there was a college party going on in the background and the guy I spoke to always had his attention divided between my call and the party going on. He wasn't foreign or anything like that. He spoke perfect English, but was half drunk.
He gave me my reference number and a bank account and routing number. He told me to go to any CIBC branch and have them deposit the funds into that account. The receipt the teller will give me will serve as proof of payment.
For $40 I didn't care. So that's what I did. Time was critical.
I took the receipt to TD and told them the same story. They didn't look convinced at first, but I told them to call that number and verify that is how Iqor wanted it done. After talking to Iqor my TD rep just rolled her eyes and said "yeah, they're shady all right." They gave me the mortgage.
The next month when I checked my credit report the Iqor reference was completely gone. Wiped clean. No derogatory history or anything was left.
Scotia iTrade WARNING: Misleading customers on USD conversion when buying US equities
Hello,
I would like to bring to your attention something that I believe is a VERY unfair business practice by itrade, enough so I will be leaving them as a result. I recently made a US equity purchase (please see screen shot).
Just before you place your equity order you get an estimate on the "FX rate". You can clearly see a estimate rate of 1.0205, which I thought was fine, the spot rate was ~1.015. To my disgust once the trade cleared the next day the actual settlement price was way off, a whole $100 off. When I did the calculation the "FX rate" was actually ~1.04 (a whole 100% off of itrade's own estimate). I immediately called and was told that the website was only an "estimate", hello???? 100% wrong estimate??? I hope you would agree with me that this is unacceptable. I pressed them some more to show me the exchange rate and fee for currency conversions. They told me flat out that "we do not have to disclose the rate", and they don't!! Hum what could they be hiding?
You have to ask yourself why you would do business with a company that:
1) doesn't disclose its currency conversion fees
2) has a website that gives a misleading (100%) quote. I can only surmise that they are betting that people will overlook the discrepancy, very shady. I tried the quote everyday since and its always the same wrong quote. I mean how hard is it to give a more accurate picture? I suspect it's because of the next point...
3) Their conversion fee is ~2.5% (credit cards do the same). I called around and the competition is ~1.7%.
This whole experience left a very bad taste and I will be leaving as a result, the biggest of betrayal is the misleading website. I caution anyone doing a US equity trades to be aware of their practices, the costs can add up fast. This is one of the shadiest business practices I have come across in a long time and felt compelled to make the community aware.
That's why I keep two separate trading accounts. One for CAD, and one for USD. No need for conversion unless I really need the money. For what it's worth, although I sympathize with you in your rant against unfair exchange rates, my opinion is that you're way overreacting. This type of estimated conversion rate happens all the time. With RBC DI for instance, I never get an "exact" conversion before a transaction--it's always an estimate. Currency rates fluctuate.
I was curious, so I looked it up. What parts of this fee statement from them are troubling to you? Their disclosure statement explains quite clearly why their estimate might be wrong. If your answer is "but it was REALLY wrong," that's because currency exchange rates can change quite dramatically over short periods of time.
https://www.scotiaitrade.com/helpcentre/lcmmmbi3.shtml
I would like to bring to your attention something that I believe is a VERY unfair business practice by itrade, enough so I will be leaving them as a result. I recently made a US equity purchase (please see screen shot).
Just before you place your equity order you get an estimate on the "FX rate". You can clearly see a estimate rate of 1.0205, which I thought was fine, the spot rate was ~1.015. To my disgust once the trade cleared the next day the actual settlement price was way off, a whole $100 off. When I did the calculation the "FX rate" was actually ~1.04 (a whole 100% off of itrade's own estimate). I immediately called and was told that the website was only an "estimate", hello???? 100% wrong estimate??? I hope you would agree with me that this is unacceptable. I pressed them some more to show me the exchange rate and fee for currency conversions. They told me flat out that "we do not have to disclose the rate", and they don't!! Hum what could they be hiding?
You have to ask yourself why you would do business with a company that:
1) doesn't disclose its currency conversion fees
2) has a website that gives a misleading (100%) quote. I can only surmise that they are betting that people will overlook the discrepancy, very shady. I tried the quote everyday since and its always the same wrong quote. I mean how hard is it to give a more accurate picture? I suspect it's because of the next point...
3) Their conversion fee is ~2.5% (credit cards do the same). I called around and the competition is ~1.7%.
This whole experience left a very bad taste and I will be leaving as a result, the biggest of betrayal is the misleading website. I caution anyone doing a US equity trades to be aware of their practices, the costs can add up fast. This is one of the shadiest business practices I have come across in a long time and felt compelled to make the community aware.
That's why I keep two separate trading accounts. One for CAD, and one for USD. No need for conversion unless I really need the money. For what it's worth, although I sympathize with you in your rant against unfair exchange rates, my opinion is that you're way overreacting. This type of estimated conversion rate happens all the time. With RBC DI for instance, I never get an "exact" conversion before a transaction--it's always an estimate. Currency rates fluctuate.
I was curious, so I looked it up. What parts of this fee statement from them are troubling to you? Their disclosure statement explains quite clearly why their estimate might be wrong. If your answer is "but it was REALLY wrong," that's because currency exchange rates can change quite dramatically over short periods of time.
https://www.scotiaitrade.com/helpcentre/lcmmmbi3.shtml
RRSP Withdrawal
Forgive my ignorance but just wanting to learn how RRSP works. I have understand the basics but still unsure on a few things. I am a new immigrant and has not contributed on my RRSP. I understand that it is tax deferral system and would be hit by withholding tax when you take the money out before your retirement. What would happen if let's say after 10 yrs you want to move elsewhere or move back to your home country and would like to withdraw your money? If I am going to be hit by massive withholding tax, is there a benefit in contributing to RRSP as compared to investing in a non-registered accounts? Many thanks and would appreciate your comments.
depends on where you move, you should check if there is a treaty between your home country and Canada. it gets pretty technical might be worth the effort to seek an accountant or tax expert to answer that.
general info about rrsps
http://www.cra-arc.gc.ca/tx/ndvdls/t.../menu-eng.html
Withholding tax doesn't matter one bit. When you take money out of the RRSP you pay tax at your marginal tax rate, whatever it is at that time. Essentially money you put into your RRSP is money you would otherwise be earning and paying tax on that you are electing not to "earn" yet and put away into your RRSP to defer the taxes until later. When you take the money out of your RRSP (usually while retired) you pay the tax which you deferred in years earlier. Ideally you put money into your RRSP while you are earning high income and taxed at higher marginal tax rates, then you take money out while you have little or no income and pay taxes on that money at a lower rate than you otherwise would have.
If your plan is to move out of Canada in X number of years and withdraw the RRSP at that time, then there is no purpose in making RRSP contributions today. You'd be better off contributing that money to a TFSA instead (no tax deduction when you put the money in but no taxes when you take it out or while your investments grow).
More info is here
http://bevmoir.com/2005/11/28/leavin...-your-savings/
http://www.milliondollarjourney.com/...bout-rrsps.htm
http://blog.taxresource.ca/rrsps-and-leaving-canada/
depends on where you move, you should check if there is a treaty between your home country and Canada. it gets pretty technical might be worth the effort to seek an accountant or tax expert to answer that.
general info about rrsps
http://www.cra-arc.gc.ca/tx/ndvdls/t.../menu-eng.html
Withholding tax doesn't matter one bit. When you take money out of the RRSP you pay tax at your marginal tax rate, whatever it is at that time. Essentially money you put into your RRSP is money you would otherwise be earning and paying tax on that you are electing not to "earn" yet and put away into your RRSP to defer the taxes until later. When you take the money out of your RRSP (usually while retired) you pay the tax which you deferred in years earlier. Ideally you put money into your RRSP while you are earning high income and taxed at higher marginal tax rates, then you take money out while you have little or no income and pay taxes on that money at a lower rate than you otherwise would have.
If your plan is to move out of Canada in X number of years and withdraw the RRSP at that time, then there is no purpose in making RRSP contributions today. You'd be better off contributing that money to a TFSA instead (no tax deduction when you put the money in but no taxes when you take it out or while your investments grow).
More info is here
http://bevmoir.com/2005/11/28/leavin...-your-savings/
http://www.milliondollarjourney.com/...bout-rrsps.htm
http://blog.taxresource.ca/rrsps-and-leaving-canada/
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