Financial Planning For Your Retirement in Canada - By: Terry S Vostor

One difference between death and taxes is that death does not get worse every time Congress meets. Taxes and the ongoing demands for governments and government agencies , departments and bureaucrats is nothing new. After all these abhorrent forms of usury go all the way back to the historical times of the Romans and Roman legions.

Every day radio, TV and the newspaper all tell us the wonderful services we get from our tax load and even the country's debt load and loads. It might be said that the amount that we as a nation owe to China is beyond comprehension. The numbers defy understanding by the laymen. It used to that they talked in millions, then billions now trillions. What after all is a trillion you might ask Mr. George Soros. Yet when you get down to it did you ever find a civil servant that really cared out your concerns and needs. Many say that all these people do is basically put in time for their pensions while making graphs and charts what a wonderful job they are doing and why the world cannot live without their services. It seems as if the role of these administrative types is to parcel out the ever limited amounts that we are left with in our pocketbooks. How nice you think live would be in Canada if only these extractors of funds from my wallet disappeared in thin air and we could buy our services from whomever or what ever we wished. However it's a 100 % bet that neither the tax load, the civil servants it funds nor your tax rates overall will decrease. You can count on two things - increasing government taxes and death. Every country has their own issues with regards to their economy. The growing numbers of people without any jobs; companies getting bankrupt; and even the decrease of working time to name a few among other problems which are very stressing. So while we are still young and are able to invest, we have to secure our future. Today is the best time to start, not tomorrow when it might be too late. Typically, the TFSA and RSSP are the answers to these issues. They equally have their own pros and cons, yet still, both have a very good foundation and are stable to assure our future to be problem free from all economic crisis. Most of you would certainly approve to the probability that more and more taxes eats if not consumes almost all of our income. But we still have to pay for these taxes for us not to violate the law. After all it is your due. Well here is your chance for once. Canada made a transformation as they publicized the Tax Free Savings Account (TFSA) on January 1, 2009, when the Honorable Jim Flaherty who happened to be the Federal Minister of Finance once in the year 2008 Federal Budget. Precisely what does this really signify? It only means that by way of the implementation of the TFSA, any person who turns into 18 will start getting their own future by means of investing using their income tax free. Another advantage of this program is that even though you have reached the age of 71 you can still benefit from it because it does not have any expiration. Along with these, you can easily withdraw your revenue anytime you desire. After all if you follow the rules to a tee and the letter of the terms, how could be chastised by Revenue Canada or be penalized in any matter. Those wonderful and caring people at the CRA. Remember in Canada when they call you , with no accountability late at night of the "Taxpayer's Bill of Rights". We at the CRA are accountable, we are accountable to the laws as passed by Parliament and ultimately we are responsible to Parliament. Yet just try to get the name of the clerk at the other end of the phone after they accidentally send you a court and bailiff seizure notice, while you are undergoing an official appeal for mistakes on their part. My name ? No sir we don't do that.
I just answer the phone and take messages. "Sir do you think that you will win your appeal?" Like its one big fun game at your choice and expense. "Its in the hands of the professionals - the accountants ?" But sir you must know. Taxes might well be described as a method used by government and their departments to artificially induce the rainy day that we all fear deep down in our minds. So much for the joke of the man from the gov't who arrives at at our doorstep to announce "I am from the xxx government dept. I am here to help you !" Ya right you say. All nations have their own problems when it comes to economic stability. The continuously growing jobless people; bankruptcy in various companies; and worst, the working hours have been reduced are some of the issues that every nation faces today. To make our future more secure, we have to invest while we are still capable of thing such. The present is the right time to begin, because tomorrow might be too late for us. Practically speaking, the TFSA and RSSP are the solutions to these problems. They both have their distinction, but equally have a good reputation and are capable of helping us to secure our future not to be ultimately affected by the economic crisis. Welcome to life in 2010 / 2011 Obamacare et al?

When the "Tax Free Saving Plan" (abbreviated to official terms as the TPSA) was first introduced to the Canadian tax paying public on January 1, 2009 by then Minister of Finance the Right Honorable Jim Flaherty the concept overall was certainly new and even at the time considered rather revolutionary. It's certainly a big break from the gov't that you can accumulate a nest egg out of your earnings tax free and with tax incentives. The controls and governance rules are fairly easy and straightforward. The great majority of you would probably concur in which possibly the taxes takes in most of our gross income. Yet we have to save ahead to pay for our retirement years. We do not want to be a burden on our families or society. Each and every one has to do what we can. That includes not spending beyond our means and instituting a savings plans. One wise grandmother used to counsel her kids that "it's not what you earn that counts, is what you save". Its not as if you have to conduct detailed records and record keeping in the bank vault for decades. Basically it boils down to the statement that you can accumulate in a registered fund and use the proceeds any way you wish , that is up to age 71.

How is this setup different from the RRSP that we all read about every January and February of each year as the contribution deadline for the previous year ends? Practically speaking, the TFSA and RSSP are the solutions to these problems. They both have their distinction, but equally have a good reputation and are capable of helping us to secure our future not to be ultimately affected by the economic crisis. Welcome to life in 2010 / 2011 Obamacare et al. After all any program or official government service or even a "tax expert"" - that is a legal beagle who saves you even the amount of their fee and fees are well worth their salt. On top of that RRSP funds help build the nation. The funds are invested in long term ventures, since time frames are lengthy . Mortgage pools and long term development of industrial schemes and mineral and diamond mining operations are several venues just to name a few. Expert financial analysts and planners will tell you that to the best of their knowledge no other country on the globe offers such a tax break for saving a retirement nest egg as Canada does with the Registered Retirement Savings Plans - known by its acronym as the RRSP. Retirement can be said twice as much husband coupled with half as much income. Others will tell you that its the time of life that a man works twice as hard at loafing around and doing nothing than when he used to work at loafing. When the Tax Free Savings Account (TFSA) was introduced to the public on January 1, 2009 by former Federal Minister of Finance in 2008 Federal Budget Honorable Jim Flaherty, Canada then had undergone an evolution. So what does it imply ? Its a jungle out there in the wild wild west. Registered Retirement Savings Plans (RRSP) and TFSA have almost the same benefits as both gives retirement funds to the aged, but both have their own differences. It is simply because in TFSA both the young people and the elderly, but in RRSP, they are only meant for the elderly. The only negative of the RRSP program is that when citizens became 71 years old, it would be the last time that they are allowed to make their contributions in this program. Not like the TFSA where their investments will be taxed. Not so with the TPSA. The money is yours to withdraw at any time and do what ever your heart desires with your saved money you can withdraw it at any time without penalty or penalties. Plus you can spend your savings for what ever you wish. You may wish to have a nest egg to tide you over stormy times. That is good. So much for the former Soviet Union and Communism to disappear and wither away. To a great degree in North America we have become slaves and serfs to ever increasing encroachments on our freedom , incomes and wealth. Welcome to Obamacare & socialism of the left wing Democratic party. It might be summarized that a taxpayer is one who does not have to pass a civil service test to work for the government. Yet every year the break even day when you work for yourself and not to support the nation comes later and later in the calendar year. You can either withdraw your savings or cash any time your little heart desires. Anytime and for the most part anywhere. The one rule to be adhered to is that you as a tax payer and citizen can not get the tax free savings and advantages with contributions when you are of an age older than 70 - that is fully seven decades of age.

Thus for Canadians the Government of Canada and the tax department has for once given you and I a gift with the Tax Free Savings Account plan. It's a bonus to us. However like anything offered in life and in most people's lifetimes unless you take advantage of opportunities that come your way its all to little avail. This only implies that because of the implementation of the TFSA, any individual that turn 18 will certainly start to get their own future secured basically through an investment in which their salary is free of tax. Another good thing with regards to the TFSA is that even though an individual will turn 71, he / she can still benefit from it, which means that this has no limit and expiration. They can withdraw their savings anytime they would like.
Don't do what you can to prepare for your own future when you can put it off ,live high off the hog now , and except government to take care of you in your declining years. It all sounds like a recipe for personal and financial disaster. Grow up . Its 2011.Its time to accept some adult responsibility in your own life and the lives of your family members. Taxation overall is often thought of as a form of spring cleaning. Some people wait all year long for their annual savings plan - their tax refund or even GST cheque or checks. How foolish the government holds onto to your money for free and bribes you with a small part of your own money back. Canadians & Americans wake up and smell the coffee. A different note when it comes to TFSA because people are still allowed to make their contributions even if they reached 71, only that it will be taxed. Visit your bank, credit union or other financial institution and sign up today.

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