Making a Yearly Budget

Keeping track of how you spend your money is important. It helps you save for things that you want and for retirement. There are many ways to do it, including spreadsheets and applications, but if you do it by only watching your bank account, you will not be very successful. This post provides an easy-to-use spreadsheet where you can make your yearly budget plan. More

You Need to Look at Your RRIF Withdrawals

With the 2015 Canadian Federal budget, the minimum payout rates for Registered Retirement Income Funds (RRIF) have been reduced significantly. If you only withdraw this amount each year you might have a much larger capital than you expect when you reach your 90s. If you do not want so much left as an inheritance with the resulting large income taxes you may want to increase your withdrawals. More

Calculating TFSA and RRSP Totals at Retirement

Calculating TFSA and RRSP Totals at Retirement 3If you have been putting money into an RRSP and/or TFSA over the years, have you ever projected how much you will have when you retire? If you are just starting, what will you have if you save some money each year? This is important because it will determine what is available for a yearly income when you retire. The spreadsheet provided lets you try out different options. The results may surprise you as even a small amount of savings each year combined with compounding can really add up. More

Impact of Tax Credits on Average Tax Rate

Impact of Tax Credits on Average Tax RateEach additional dollar you earn is taxed at the marginal tax rate. However, the tax credits to which everyone is entitled significantly reduces the amount of taxes you actually pay compared to the tax bracket values and the marginal tax rates. For example, for income close to the top of the first tax bracket and the basic personal tax credit, the actual average rate is just 72% of the marginal tax rate. More

Estimating Canadian Income Taxes

If you need to estimate your Canadian income taxes during the year before making an investment decision, use the simplified spreadsheet provided in this post. For example, you may have to decide the impact of taking capital gains this year, selling stocks or taking out an RRSP.

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TFSA and RRSP – Providing a Fixed Retirement Income Using 2015 Rates

TFSA and RRSP - Providing a Fixed Retirement Income2015 1This post describes a spreadsheet that you can download that shows how you can use RRSPs and TFSAs to generate a fixed retirement income each year. You will probably have a number of both RRSPs and TFSAs due to the restrictive amount of money you can invest in the TFSA. Knowing what they can provide as income before the capital is exhausted is critical to retirement planning.  More

TFSA or RRSP – Impact of Reinvesting the Tax Refund Using 2015 Rates

TFSA or RRSP - Impact of Reinvesting the Tax Refund Using 2015 Rates 2As shown in this post, the RRSP tax refund must be fully reinvesting each year if the RRSP is to provide the same income and close to the same capital during retirement compared to a TFSA. Even then, the TFSA is a better retirement option. The spreadsheet used for this analysis can be downloaded so you can try out different conditions such as your own province, marginal tax rate and reinvestment strategy. A major difference between a TFSA and a RRSP is that the RRSP is tax deductible while the TFSA is not and that the RRSP generates a tax refund which depends on your marginal tax rate. More

RRIF Minimum Payout – 2015 Rates

RRIF Minimum Payout - 2015 Rates 1In the 2015 Federal Budget, the minimum payout rates for Registered Retirement Income Funds (RRIF) have been reduced significantly so that capital can be preserved for a longer period of time. This post updates a previous one that uses the old rates. An updated spreadsheet can be downloaded that provides tables and charts that show the impact on capital of the minimum payout for different starting RRIF capital, interest rate and marginal tax rate and includes the impact inflation. More

RRIF Minimum Payout – 2015 versus Old Rates

RRIF Minimum Payout - 2015 versus Old Rates 1In the 2015 Federal Budget, the minimum payout rates for Registered Retirement Income Funds (RRIF) have been reduced significantly so that capital can be preserved for a longer period of time. Instead of a payout of 7.31% at age 71 it will be 5.28%. The reduction in the rate is more than 28% initially going down to just over 20% after 10 years! You can see the impact on the charts in this post and try your own options with the downloadable spreadsheet. More

Managing Expenses and Cash Flow – Part 1: Why

Managing Expenses and Cash Flow 01 CumWhy should you have to record every purchase you have made to keep track of your expenses? Let someone else do it for you: buy everything using plastic or mobile payments (tap and pay). You will then be provided with a summary of the payments by date, vendor and amount that you can access online. Using the Cash Flow method presented here and the spreadsheet included in Part 2, you can simplify the tracking of your expenses with a few minutes of work each month. You can also plan your income and expenses by month, prioritize your expenses, show your cash flow to ensure you have enough money when big bills are due and compare the actuals to the plan. More

Managing Expenses and Cash Flow – Part 2: Spreadsheet

Managing Expenses and Cash Flow 10 ActualChartBy using the Cash Flow method and the spreadsheet included here, you can simplify the tracking of your expenses with a few minutes of work each month. You can also plan your income and expenses by month, prioritize your expenses, show your cash flow to ensure you have enough money when big bills are due and compare the actuals to the plan. While it is recommended that you buy everything using plastic or mobile payments as indicated in Part 1, you can also enter any Transactions that you want. More

Managing Expenses and Cash Flow – Part 3: FinanceBase

Cash Flow Planning GraphThe spreadsheet discussed in Part 2 is very flexible and provides very good insight into how your actual cash flow compares to the plan on the many tables and charts provided. However, there is more that can be done to help you, especially if you have an at-home business or want to keep a long-term record of your income and expenses. If you want a more robust and full-featured application as an alternative to the spreadsheet, FinanceBase is a very good option and is discussed in this part. More

Managing Expenses and Cash Flow – Part 4: Design

While creating the spreadsheet that is provided in Part 2, a number of tricks and guidelines were used that may be of interest to others. Specifically, obtaining the screenshots and making them download as fast as possible, creating line charts that stopped at the current month, deciding what colors to use to ensure there is no confusion when viewing and printing the charts, and the tradeoff between using a single sheet rather than multiple sheets to ensure that formulas are not modified. More

Understanding Your Canadian Sources Of Retirement Income

Understanding Your Canadian Sources Of Retirement Income Chart1When you are retired you will probably have more sources of income than you had when you were working. There will be OAS, GIS, CPP, RRIF, TFSA, Annuity, company pension and investments. You may have all or some of them depending your income and time in Canada during your working life. This post will help you understand how these are obtained and their impact on retirement income and taxes. More

Determining the Elected Split-Pension Amount

Determining a Value for Splitting Pension Income ThumbThe Elected Split-Pension Amount for retired spouses results in a lower combined Canadian income tax if income can be moved from one spouse’s higher tax bracket to the other spouse’s lower tax bracket. Depending on the incomes, this can be a little hard to determine. This post describes how to determine the best splitting for you and your spouse, provides a spreadsheet to help in the analysis and determines the savings. Be careful when using any optimized amount provided by some of the tax preparation software or the maximum amount permitted as it may not be what you want relative to how much each person pays or receives. More

Using Yearly Rates to Compare Stocks Prices and Dividends

Using Yearly Rates to Compare Stock Prices and Dividends ChartWhile past performance is not a predictor of future returns, companies that have consistently meet their long-term yearly growth rate for stock price and dividends deserve close scrutiny. However, it is not always obvious which company’s combined yearly stock growth rate plus yearly dividend growth rate is better than that of another company. An Excel spreadsheet can be downloaded that takes the yearly stock price and dividends rates and projects the stock prices and dividends 5 years into the future, determines a final value using taxes and  charts them so you can easily compare companies. More

Determining Yearly Rates for Stock Prices and Dividends

There is a lot of information available to help you evaluate a stock you might be considering. The long-term yearly rate by which the stock price and dividends has increased (or decreased) is an important statistic that is not easy to find, without paying for the analysis. An Excel spreadsheet can be downloaded that you can use to generate this information. The resulting yearly rate for both the stock and dividends can be used in RetireBase to help project the long-term cash flow. More

TFSA and RRSP – Providing a Fixed Retirement Income

TFSA and RRSP - Providing a Fixed Retirement Income1This post describes a spreadsheet that you can download that shows how you can use RRSPs and TFSAs to generate a fixed retirement income each year. You will probably have a number of both RRSPs and TFSAs due to the restrictive amount of money you can invest in the TFSA. Knowing what they can provide as income before the capital is exhausted is critical to retirement planning.  More

RetireBase Calculations

RetireBase takes the data you enter and performs a number of calculations each time a value is changed to produce the tables, charts and analysis that are displayed on the windows and pages. More

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