I spent Thursday, Friday and Saturday of last week at the World Money Show. I quite enjoyed myself and learned quite a lot. I want to briefly talk about the good, bad and interesting of this convention.
First I would talk about the good. The Money Saver Magazine had most of Saturday booked for a number of different presentations. I went to 5 of their 6 presentations. They were all excellent and informative. Two of the presenters gave out books they had written. I will be blogging about these presentations later.
An interesting thing I noticed was in presentations about resources. I was in a presentation on resources given by a bunch of old guys and they were talking about solar energy replacing coal and oil. I went to a presentation on resources given by a bunch of young guys and they were talking about coal staying around for quite a while still. They did not seem to think it would start to be replaced until at least 2030.
Now I shall talk about the worse presentation. This was one was called "The Globe and Mail's view of the Economy and Markets". The presenter Paul Waldie talked vaguely on how well the Globe and Mail was doing with trying to get people to subscribe online for about 10 minutes and then opened the presentation up for a Q&A. I will not be blogging about this presentation later because there is really nothing to blog about. This was in high and very sharp contrast to the presentation at the end by David Wyss who gave a fascinating talk at the end of the show on the same subject. I realize that Paul Waldie is not an economist, but really?
On my other blog I am today writing about Gluskin Sheff + Associates Inc. (TSX-GS, OTC-GLUSF) ... continue...
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my site for an index to these blog entries and for stocks followed. Follow me on Twitter.
Monday, October 20, 2014
Wednesday, October 15, 2014
World Money Show Toronto
Tomorrow, I am going to the World Money Show for Toronto at the Toronto Convention center. I go each year and usually find lots of great information. I especially like the Opening Remarks as I generally find those presentations the best in this show.
I will be taking notes at all the presentations I attend and will be publishing those notes starting next week.
On my other blog I am today writing about Kombat Copper Inc. (TSXV-KBT, OTC-PNTZF) ... continue...
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my site for an index to these blog entries and for stocks followed. Follow me on Twitter.
I will be taking notes at all the presentations I attend and will be publishing those notes starting next week.
On my other blog I am today writing about Kombat Copper Inc. (TSXV-KBT, OTC-PNTZF) ... continue...
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my site for an index to these blog entries and for stocks followed. Follow me on Twitter.
Tuesday, October 14, 2014
It's October
There seems to be a lot of talk of future volatility of the stock market or a market crash. One explanation for this is that it is October. Most stock market crashes occur in the fall. Logically speaking there should be no seasonality to the market. However, that is not reality.
I will do what I generally do at this time of the year. That is I stop looking at what the TSX is doing. There is no way I am going to sell anything just because there is a potential for a stock market crash. I have been through a number of crashes and the worse that the majority of the companies I own have done is to stop rising their dividend payments.
It is hard to know what will happen. Are we heading into a bear market? We are probably not at this time, but there is a lot to be worried about, like to economies of EU, China and Japan. The US economy has problems also, but they also have a lot of gas coming online and employment seems to be heading in the right direction. For the US, if you include Canada's oil, then it can be -self-sufficient in oil and gas.
Yes, some companies will cut or delete their dividends. But, as I said above the most that the majority will do is not raise their dividend, although some will. Also, usually problems come to dividends two years after a market crash, so you have plenty of time to think about what you want to do with failing stocks.
At some point we will have another bear market and recession. I have been through a number of these and I will just wait them out.
On my other blog I am today writing about Teck Resources Ltd. (TSX-TCK.B, NYSE-TCK) ... continue...
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my site for an index to these blog entries and for stocks followed. Follow me on Twitter.
I will do what I generally do at this time of the year. That is I stop looking at what the TSX is doing. There is no way I am going to sell anything just because there is a potential for a stock market crash. I have been through a number of crashes and the worse that the majority of the companies I own have done is to stop rising their dividend payments.
It is hard to know what will happen. Are we heading into a bear market? We are probably not at this time, but there is a lot to be worried about, like to economies of EU, China and Japan. The US economy has problems also, but they also have a lot of gas coming online and employment seems to be heading in the right direction. For the US, if you include Canada's oil, then it can be -self-sufficient in oil and gas.
Yes, some companies will cut or delete their dividends. But, as I said above the most that the majority will do is not raise their dividend, although some will. Also, usually problems come to dividends two years after a market crash, so you have plenty of time to think about what you want to do with failing stocks.
At some point we will have another bear market and recession. I have been through a number of these and I will just wait them out.
On my other blog I am today writing about Teck Resources Ltd. (TSX-TCK.B, NYSE-TCK) ... continue...
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my site for an index to these blog entries and for stocks followed. Follow me on Twitter.
Wednesday, October 8, 2014
Something to Buy October 2014
There is always something to buy in the stock market. On Monday, I put out a list of the stocks that I covered and showed what stock might be a good deal based on dividend yield. Now I am trying to categorize what sorts of stocks may be a good deal based on dividend yield.
The one thing that is noticeable for this October is that a lot of stocks are down from last month.
Categorizing stocks is not as simple as it might seem. Every site you go to has categorized stocks a bit differently. I try to keep this as simple as possible. See my spreadsheet at here. As in other spreadsheets, you can highlight a line or a number of lines for better viewing.
Of the Consumer Discretionary stocks, Canadian Tire no longer cheap but Thomson Reuter (TSX-TRI) is still showing as relatively cheap. I have Leon's Furniture as a Consumer Staple, but it should be a Consumer Discretionary stock and it is now relatively cheap. I have the same problem with Dorel Industries (TSX-DII.B) and it is showing as historically cheap.
A number of Consumer Staple stocks seem to be relatively cheap. Examples would be Jean Coutu Group Inc. (TSX-PJC.A), Metro Inc. (TSX-MRU) and Saputo Inc. (TSX-SAP).
I have two health care stocks and they are both American and both showing as relatively cheap. These stocks are Johnson and Johnson (NYSE-JNJ) and Medtronic Inc. (NYSE-MDT).
Of my Real Estate stocks only Granite Real Estate (TSX-GRT.UN) is showing as relatively cheap.
There are more banks showing as relatively cheap this month. These would be Bank of Nova Scotia (TSX-BNS) National Bank (TSX-NA), Royal Bank (TSX-RY) and TD Bank (TSX-TD). Of the big five Canadian Banks only Bank of Montreal (TSX-BMO) is not showing as cheap.
There are some in finance that deserve to be cheap, like AGF Management (TSX-AGF). CI Financial (TSX-CIX) is still showing up as relatively cheap as is IGM Financial (TSX-IGM). Both Power Corp (TSX-POW) and Power Financial (TSX-PWF) are still looking relatively cheap.
There are a few historically cheap Industrial stocks like Hammond Power Solutions Inc. (TSX-HPS.A), PFB Corp (TSX-PFB) and Transcontinental Inc. (TSX-TCL.A). These all seem to be very cheap for a reason. There are other industrials showing relatively cheap. They are Bombardier Inc. (TSX-BBD.B); Canam Group Inc. (TSX-CAM); Finning International Inc. (TSX-FTT); Pason Systems Inc. (TSX-PSI); Pulse Seismic Inc. (TSX-PSD); and SNC-Lavalin (TSX-SNC). Canam Group Inc. (TSX-CAM); Pason Systems Inc. (TSX-PSI); and Pulse Seismic Inc. (TSX-PSD) are all rather small companies.
Still the only relatively cheap ones in the Tech sector are for small companies like Calian Technologies Ltd (TSX-CTY) and Evertz Technologies (TSX-ET).
A number of energy stocks are historically cheap. They are Canadian Natural Resources (TSX-CNQ); Cenovus Energy Inc. (TSX-CVE) and Suncor Energy (TSX-SU). Canadian Oil Sands Ltd (TSX-COS) and Ensign Energy Services (TSX-ESI) are showing as relatively cheap.
In the Materials Sector Teck Resources Ltd (TSX-TCK.B) is showing as historically cheap, while Barrick Gold Corp. (TSX-ABX) is showing as relatively cheap.
The infrastructure type utility companies are not cheap. What utility companies that are cheap, seem to be cheap for a good reason. Examples are Atlantic Power Corp (TSX-ATP) and TransAlta Corp (TSX-TA).
Of the Telecom Stocks BCE (TSX-BCE) and Shaw Communications Inc. (TSX-SJR.B) seem to be relatively cheap. I think that Manitoba Telecom (TSX-MBT) is relatively cheap for a good reason.
On my other blog I am today writing about Medtronic Inc. (NYSE-MDT) ... continue...
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my site for an index to these blog entries and for stocks followed. Follow me on Twitter.
The one thing that is noticeable for this October is that a lot of stocks are down from last month.
Categorizing stocks is not as simple as it might seem. Every site you go to has categorized stocks a bit differently. I try to keep this as simple as possible. See my spreadsheet at here. As in other spreadsheets, you can highlight a line or a number of lines for better viewing.
Of the Consumer Discretionary stocks, Canadian Tire no longer cheap but Thomson Reuter (TSX-TRI) is still showing as relatively cheap. I have Leon's Furniture as a Consumer Staple, but it should be a Consumer Discretionary stock and it is now relatively cheap. I have the same problem with Dorel Industries (TSX-DII.B) and it is showing as historically cheap.
A number of Consumer Staple stocks seem to be relatively cheap. Examples would be Jean Coutu Group Inc. (TSX-PJC.A), Metro Inc. (TSX-MRU) and Saputo Inc. (TSX-SAP).
I have two health care stocks and they are both American and both showing as relatively cheap. These stocks are Johnson and Johnson (NYSE-JNJ) and Medtronic Inc. (NYSE-MDT).
Of my Real Estate stocks only Granite Real Estate (TSX-GRT.UN) is showing as relatively cheap.
There are more banks showing as relatively cheap this month. These would be Bank of Nova Scotia (TSX-BNS) National Bank (TSX-NA), Royal Bank (TSX-RY) and TD Bank (TSX-TD). Of the big five Canadian Banks only Bank of Montreal (TSX-BMO) is not showing as cheap.
There are some in finance that deserve to be cheap, like AGF Management (TSX-AGF). CI Financial (TSX-CIX) is still showing up as relatively cheap as is IGM Financial (TSX-IGM). Both Power Corp (TSX-POW) and Power Financial (TSX-PWF) are still looking relatively cheap.
There are a few historically cheap Industrial stocks like Hammond Power Solutions Inc. (TSX-HPS.A), PFB Corp (TSX-PFB) and Transcontinental Inc. (TSX-TCL.A). These all seem to be very cheap for a reason. There are other industrials showing relatively cheap. They are Bombardier Inc. (TSX-BBD.B); Canam Group Inc. (TSX-CAM); Finning International Inc. (TSX-FTT); Pason Systems Inc. (TSX-PSI); Pulse Seismic Inc. (TSX-PSD); and SNC-Lavalin (TSX-SNC). Canam Group Inc. (TSX-CAM); Pason Systems Inc. (TSX-PSI); and Pulse Seismic Inc. (TSX-PSD) are all rather small companies.
Still the only relatively cheap ones in the Tech sector are for small companies like Calian Technologies Ltd (TSX-CTY) and Evertz Technologies (TSX-ET).
A number of energy stocks are historically cheap. They are Canadian Natural Resources (TSX-CNQ); Cenovus Energy Inc. (TSX-CVE) and Suncor Energy (TSX-SU). Canadian Oil Sands Ltd (TSX-COS) and Ensign Energy Services (TSX-ESI) are showing as relatively cheap.
In the Materials Sector Teck Resources Ltd (TSX-TCK.B) is showing as historically cheap, while Barrick Gold Corp. (TSX-ABX) is showing as relatively cheap.
The infrastructure type utility companies are not cheap. What utility companies that are cheap, seem to be cheap for a good reason. Examples are Atlantic Power Corp (TSX-ATP) and TransAlta Corp (TSX-TA).
Of the Telecom Stocks BCE (TSX-BCE) and Shaw Communications Inc. (TSX-SJR.B) seem to be relatively cheap. I think that Manitoba Telecom (TSX-MBT) is relatively cheap for a good reason.
On my other blog I am today writing about Medtronic Inc. (NYSE-MDT) ... continue...
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my site for an index to these blog entries and for stocks followed. Follow me on Twitter.
Monday, October 6, 2014
Dividend Stocks October 2014
The theory is that you should use the dividend yield to see if a dividend stock is selling at a stock price that is relatively cheap. A stock price is considered cheap if it is selling at a dividend yield higher than the historical high yield or higher than the historical average yield. See my spreadsheet at dividend growth stocks that I just updated for October 2014.
On this list,
Emera Inc. (TSX-EMA) increased their dividends. Just Energy Group Inc. (TSX-JE) decreased their dividends
Saputo Inc. (TSX-SAP) split their stocks two to one. Alliance Grain Traders Inc. changed their name to AGT Food and Ingredients Inc. The Symbol is still AGT. Coast Wholesale Appliances Inc. was bought out by CWAL Investments and was delisted in September 2014. NIBE Industries AB of Sweden ("NIBE") has acquired WaterFurnace. This stock was also delisted in September 2014.
I am showing whether a stock is cheap based on historical high dividend yields (P/Hi), historical average dividend yields (P/Ave) or on 5 year median dividend yields (P/5Yr). See these fields on the right side of the file. You can highlight a particular stock using your cursor to highlight the appropriate line.
There are always some stocks to buy because they are priced reasonably. There are always stocks to currently avoid because they are overpriced. Looking at dividend growth stocks that are selling at stock prices that give them a dividend yield above the historical average dividend yield are probably the best bet.
The stocks that are selling at prices that give them a dividend yield above the historical high yield could be good stocks to buy. However, these stocks may be selling so cheap because of current troubles, especially financial troubles and should be treated with caution. Do not forget that I have all the stocks I follow on this spreadsheet and some are much better investments than others.
However, you should always investigate a stock before you buy. Sometimes different stocks in certain sectors are just out of favour or the stock market is just in one of its declines. However, a stock may be relatively cheap because it has problems. That is why you should always investigate a stock before buying.
Looking at stock this way is equivalent to a stock filter. A main problem I know of is for the old income trusts. These companies have generally lowered their dividend yields forever and they will probably never get back to the old dividend yield highs they made as an income trust company. For these stocks, you might be better comparing the current dividend yield to the 5 year median dividend yield.
Also, on some stocks I have a lot more information years in my spreadsheets than for other stocks. So, finding a stock on the list as cheap is only the first step in finding a stock to buy. This is the same with any other sort of stock filters that you can use.
The last thing to remember is that I have entering figures into a spreadsheet. I could put them in incorrectly, I can transpose figures and I can misread figures. This is another great reason why you should check a stock out before investing. As this is just a filter, it works better on some stocks than on others.
See my entry on my methodology in establishing the historical dividend yield highs and lows for the stocks that I cover. I have an entry on my introduction to Dividend Growth Stocks . You might want to look at my original entry on Dividend Growth Stocks. I have also written about why I like Dividend Growth companies .
On my other blog I am today writing about HNZ Group Inc. (TSX-HNZ.A, OTC- CDHPF) ... continue...
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my site for an index to these blog entries and for stocks followed. Follow me on Twitter.
On this list,
- I have 10 stocks with a dividend yield higher than the historical high dividend yield,
- I have 46 stocks with a dividend yield higher than the historical average dividend yield and
- 41 stocks with a dividend yield higher than the 5 year average dividend yield.
- I had 6 stocks with a dividend yield higher than the historical high dividend yield,
- I had 40 stocks with a dividend yield higher than the historical average dividend yield and
- 38 stocks with a dividend yield higher than the 5 year average dividend yield.
- I had 9 stocks with a dividend yield higher than the historical high dividend yield,
- I had 45 stocks with a dividend yield higher than the historical average dividend yield and
- 39 stocks with a dividend yield higher than the 5 year average dividend yield.
Emera Inc. (TSX-EMA) increased their dividends. Just Energy Group Inc. (TSX-JE) decreased their dividends
Saputo Inc. (TSX-SAP) split their stocks two to one. Alliance Grain Traders Inc. changed their name to AGT Food and Ingredients Inc. The Symbol is still AGT. Coast Wholesale Appliances Inc. was bought out by CWAL Investments and was delisted in September 2014. NIBE Industries AB of Sweden ("NIBE") has acquired WaterFurnace. This stock was also delisted in September 2014.
I am showing whether a stock is cheap based on historical high dividend yields (P/Hi), historical average dividend yields (P/Ave) or on 5 year median dividend yields (P/5Yr). See these fields on the right side of the file. You can highlight a particular stock using your cursor to highlight the appropriate line.
There are always some stocks to buy because they are priced reasonably. There are always stocks to currently avoid because they are overpriced. Looking at dividend growth stocks that are selling at stock prices that give them a dividend yield above the historical average dividend yield are probably the best bet.
The stocks that are selling at prices that give them a dividend yield above the historical high yield could be good stocks to buy. However, these stocks may be selling so cheap because of current troubles, especially financial troubles and should be treated with caution. Do not forget that I have all the stocks I follow on this spreadsheet and some are much better investments than others.
However, you should always investigate a stock before you buy. Sometimes different stocks in certain sectors are just out of favour or the stock market is just in one of its declines. However, a stock may be relatively cheap because it has problems. That is why you should always investigate a stock before buying.
Looking at stock this way is equivalent to a stock filter. A main problem I know of is for the old income trusts. These companies have generally lowered their dividend yields forever and they will probably never get back to the old dividend yield highs they made as an income trust company. For these stocks, you might be better comparing the current dividend yield to the 5 year median dividend yield.
Also, on some stocks I have a lot more information years in my spreadsheets than for other stocks. So, finding a stock on the list as cheap is only the first step in finding a stock to buy. This is the same with any other sort of stock filters that you can use.
The last thing to remember is that I have entering figures into a spreadsheet. I could put them in incorrectly, I can transpose figures and I can misread figures. This is another great reason why you should check a stock out before investing. As this is just a filter, it works better on some stocks than on others.
See my entry on my methodology in establishing the historical dividend yield highs and lows for the stocks that I cover. I have an entry on my introduction to Dividend Growth Stocks . You might want to look at my original entry on Dividend Growth Stocks. I have also written about why I like Dividend Growth companies .
On my other blog I am today writing about HNZ Group Inc. (TSX-HNZ.A, OTC- CDHPF) ... continue...
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my site for an index to these blog entries and for stocks followed. Follow me on Twitter.
Wednesday, October 1, 2014
Preferred Shares
TD Waterhouse has a weekly video and this one is on Preferred Shares. Preferred Shares are quite popular at the moment and this market has grown significantly over the past while.
TD Waterhouse talks about the most popular Preferred Shares currently, which is Rate Reset Preferred Shares. If you want to understand this subject, this would be a good video to watch and as with all TD videos it is a short one of less than 10 minutes.
A lot of people perceive that Preferred Share dividends are safer than Common Share dividends. It is true that Preferred Share dividends must be paid in full for a company to issue Common Share dividends. So you could be in a situation that Preferred Share dividends are paid and Common Share dividends are not. When I say that Preferred Share dividends must be paid in full, I mean that any missed Preferred Share dividends must be paid. Missed Common Share dividends are never paid.
I feel that if a company is in severe difficulties, it does not matter what you position is in the debt line. If a company goes bankrupt few people get any money and certainly not Preferred Shares or Common Shares. What happens if a company gets into trouble is payments are stopped on Common Shares, then Preferred Shares and then Bonds.
The site Investopedia has some notes on Preferred Shares. Raymond James has a recent report on Canadian Preferred Shares. This report includes a sample preferred share portfolio that might be of interest. There is also a blogger Pref Blog that talks about Preferred Shares.
On my other blog I am today writing about Le Chateau Inc. (TSX-CTU.A, OTC-LCUAF) ... continue...
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my site for an index to these blog entries and for stocks followed. Follow me on Twitter.
TD Waterhouse talks about the most popular Preferred Shares currently, which is Rate Reset Preferred Shares. If you want to understand this subject, this would be a good video to watch and as with all TD videos it is a short one of less than 10 minutes.
A lot of people perceive that Preferred Share dividends are safer than Common Share dividends. It is true that Preferred Share dividends must be paid in full for a company to issue Common Share dividends. So you could be in a situation that Preferred Share dividends are paid and Common Share dividends are not. When I say that Preferred Share dividends must be paid in full, I mean that any missed Preferred Share dividends must be paid. Missed Common Share dividends are never paid.
I feel that if a company is in severe difficulties, it does not matter what you position is in the debt line. If a company goes bankrupt few people get any money and certainly not Preferred Shares or Common Shares. What happens if a company gets into trouble is payments are stopped on Common Shares, then Preferred Shares and then Bonds.
The site Investopedia has some notes on Preferred Shares. Raymond James has a recent report on Canadian Preferred Shares. This report includes a sample preferred share portfolio that might be of interest. There is also a blogger Pref Blog that talks about Preferred Shares.
On my other blog I am today writing about Le Chateau Inc. (TSX-CTU.A, OTC-LCUAF) ... continue...
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my site for an index to these blog entries and for stocks followed. Follow me on Twitter.
Monday, September 29, 2014
RRIFs and LRIFs
For RRSPs, you must convert it into a Registered Retirement Income Fund (RRIF) or life annuity in the year you turn 71, but you do not have to start that income in the year you turn 71. It must start in the following year. For Locked-In RRSP this same rule applies.
You might want to convert your RRPS or Locked-in RRSP before you have to. This might especially apply to the Locked-in RRSP if you want to take money from it. With the RRSP you can take funds out at any time. However, money from these funds is taxable income and there can be withholding tax taken at the time of withdrawal, depending on how much you take out.
It would seem that you can convert your locked-in RRSP to a LIF at the lessor of age 55 or at the age you could have obtained a pension from the original pension plan. There are current rules that at conversion you can transfer part of your locked-in money to an RRSP or RLIF. These rules have changed so it is best to check with your financial institution when doing to conversion to know how much you can transfer if you want to do this.
For the minimum amount you must take from an RRIF or LRIF, see document from Canada Revenue Agency. Look at item 8 as this is the one that generally applies. However, all financial institutions will tell you what you need to withdrawal each year. This will occur in January as it is based on the funds value at the end of the previous year. The Tax Tips.ca site has information on minimum withdrawals.
For LRIFs there is a maximum withdrawal amount. The maximum payment is based on the LRIF's investment earnings for the previous year. The maximum income payment will be the greater of the amount earned under the LIF formula or your LRIF's investment earnings for the previous year.
On an Ontario Government site there are FAQs on Locked-in Retirement Income Funds (LRIFs). There is a lot of information on these products on the internet, but the variety of places you can go can sometimes be bewildering. A lot of the financial institutions have information, but you usually have to provide personal information to get at their information.
I have known people who have cashed in their RRSP or their RRIF to stop their OAS from being clawed back. You can do this, but you will pay taxes on the withdrawal probably at the maximum rate.
I personally do a budget for the follow year in November. I use my previous tax program to determine what additional taxes I need to pay for the current year and ask my financial institution to pay that tax amount as the withholding tax amount. I do my withdrawals from my RRSP and LRIF once a year in December of each year.
When I changed my Locked-in RRSP to a LRIF, I just changed the account. I kept all the investments in stocks that I currently held. When I have to change my RRSP to a RRIF I plan to do the same. That is keep the current stock and other investments I have in my RRSP in my RRIF.
The blogger Retire Happy has a lot of information on his site about RRIFs.
On my other blog I am today writing about Great-West Lifeco Inc. (TSX-GWO, OTC-GWLIF) ... continue...
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my site for an index to these blog entries and for stocks followed. Follow me on Twitter.
You might want to convert your RRPS or Locked-in RRSP before you have to. This might especially apply to the Locked-in RRSP if you want to take money from it. With the RRSP you can take funds out at any time. However, money from these funds is taxable income and there can be withholding tax taken at the time of withdrawal, depending on how much you take out.
It would seem that you can convert your locked-in RRSP to a LIF at the lessor of age 55 or at the age you could have obtained a pension from the original pension plan. There are current rules that at conversion you can transfer part of your locked-in money to an RRSP or RLIF. These rules have changed so it is best to check with your financial institution when doing to conversion to know how much you can transfer if you want to do this.
For the minimum amount you must take from an RRIF or LRIF, see document from Canada Revenue Agency. Look at item 8 as this is the one that generally applies. However, all financial institutions will tell you what you need to withdrawal each year. This will occur in January as it is based on the funds value at the end of the previous year. The Tax Tips.ca site has information on minimum withdrawals.
For LRIFs there is a maximum withdrawal amount. The maximum payment is based on the LRIF's investment earnings for the previous year. The maximum income payment will be the greater of the amount earned under the LIF formula or your LRIF's investment earnings for the previous year.
On an Ontario Government site there are FAQs on Locked-in Retirement Income Funds (LRIFs). There is a lot of information on these products on the internet, but the variety of places you can go can sometimes be bewildering. A lot of the financial institutions have information, but you usually have to provide personal information to get at their information.
I have known people who have cashed in their RRSP or their RRIF to stop their OAS from being clawed back. You can do this, but you will pay taxes on the withdrawal probably at the maximum rate.
I personally do a budget for the follow year in November. I use my previous tax program to determine what additional taxes I need to pay for the current year and ask my financial institution to pay that tax amount as the withholding tax amount. I do my withdrawals from my RRSP and LRIF once a year in December of each year.
When I changed my Locked-in RRSP to a LRIF, I just changed the account. I kept all the investments in stocks that I currently held. When I have to change my RRSP to a RRIF I plan to do the same. That is keep the current stock and other investments I have in my RRSP in my RRIF.
The blogger Retire Happy has a lot of information on his site about RRIFs.
On my other blog I am today writing about Great-West Lifeco Inc. (TSX-GWO, OTC-GWLIF) ... continue...
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my site for an index to these blog entries and for stocks followed. Follow me on Twitter.
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