A Little Active Income Goes A Long Way

A Little Active Income Goes A Long WayGenerating enough passive income to cover the cost of living is the holy grail of early retirement. However, it’s quite difficult to amass that big lump sum to generate enough passive income to live on. People spend more money as they get raises so they need more and more income every year. Early retirement offers a way out of this cycle by forcing us to examine how we make and…

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If You Have 10 Years Before Retirement

If You Have 10 Years Before RetirementThe November issue of Money magazine contains a bunch of retirement articles. It must be their retirement issue. I am planning to evaluate each article one at a time to see if I agree with their position. The first article is about preparing for retirement with a checklist for you to compare to at 10, 5, and 1 year out. Let’s do the 10 years out scenario today. Saving Money…

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Want to Retire Early? Start Saving Now

Want to Retire Early? Start Saving NowIf you’re dreaming of an early retirement, you need to start saving at an early age, too. That can be difficult if you’re just stepping into your first full-time job, or if you’re also saving for a house or paying off a student loan. While it’s true that paying down debt and saving for a home are important, the earlier you start saving for retirement, the greater the benefits of…

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Should You Take Money Out of RRSPs to Pay Off Debt?

Should You Take Money Out of RRSPs to Pay Off Debt?I’ve had a lot of inquiries about this lately, so I thought I would address it today. I’ve written about RRSP Basics and RRSPs vs. Paying Down Debt, but these articles dealt mainly with general issues and new contribution money. I haven’t directly addressed the question of whether or not you should actually withdraw money from existing Resgistered Retirement Savings Plans in order to pay down credit card or mortgage…

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The Stages of Financial Security to Ensure Your Financial Independence

The Stages of Financial Security to Ensure Your Financial IndependenceWe all want financial security, but, wow, it sure does seem like a long way off to most of us, doesn’t it? It’s hard to stay focused on such a distant goal, so I like to create mental milestones to reach, which are easier to get to and give some sense of satisfaction along the road to financial security.  It’s just breaking the larger goal up into more manageable chunks….

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The Lottery and your retirement

The Lottery and your retirementDon’t be one of the boneheads counting on the lottery to retire. Here’s why: Your chances of retiring?  Pretty close to 100% (unless, fate forbid, you die before you retire).  Your chances of winning the Lotto Max?  1 in about 29 million.  (Mathematically it’s closer to 1 in 86 million, but because the way the tickets work it’s about 1 in 29 million.)  1 in 29 million is 0.0000034483%. So,…

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At 55 – Is it Too Late For Retirement Planning?

At 55 – Is it Too Late For Retirement Planning?During my day job, I meet many clients to look at their personal finances. More precisely, my mandate is to create financial plans and help clients with more than $250,000 invested with the bank. So, most of them are in their 50s. Unfortunately, I come across a lot of people who don’t have a financial plan and have never discussed retirement planning. At one point, it’s like they feel that…

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The Basics And Benefits Of Registered Retirement Savings Plans

The Basics And Benefits Of Registered Retirement Savings PlansWhat if there was a way that you could get the Canadian government to pay almost half of the money you needed to make an investment (be it for the purchase of stocks, mutual funds, guaranteed investment certificates, mortgages etc.). Then, when you’ve made money on that investment, through interest earned or capital gains, the government tells you that you don’t have to pay tax on it. Keep the profits,…

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How the Age and Pension Amount Tax Credit Works

How the Age and Pension Amount Tax Credit WorksAs I mentioned in the Old Age Security (OAS) clawback article, a reader requested an explanation of the various seniors benefits in Canada.  While I’ve explained some income sources (oas and gis), lets get into a couple popular tax credits. Age Amount Tax Credit This tax credit, as the name suggest, is for seniors age 65 and older within an income threshold.  Like Old Age Security and Guaranteed Income Supplement,…

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