Top tricks for the everyday Canadian to minimize their taxes
Your annual RRSP contribution may not be a no-brainer this year due to the pandemic. BNN Bloomberg personal finance columnist Dale Jackson warned that anyone who suffered a job-loss or a layoff during the pandemic may want to consider what effect that might have on the potential tax break afforded by an RRSP. If your income was reduced in 2020, it might make sense to hold off and claim your RRSP contribution in 2021 or another year when your income is higher, Jackson advised. .
Tax considerations for COVID-related benefits
With tax season is around the corner, some Canadians will have new considerations to take into account. Silvia Jacinto, a tax partner at Crowe Soberman, said it’s important to start figuring out whether you owe money back for pandemic-related benefits such as CERB. Jacinto explained there are many new benefits Canadians should take advantage of this season, such as deducting home office expenses if you’ve worked from home in 2020 due to COVID-19.
How to tell if your online shopping is getting out of control
With many stores closed amid ongoing pandemic-related lockdowns, many Canadians are starting to do most of their shopping online. But when spending is as easy as a click of a button, how can you tell if it’s getting out of control? “Moolala” author Bruce Sellery suggested that Canadians should ask themselves questions such as “Have paid off my credit card debt in full every month?” and “Am I still saving for things that are important to me?” such as retirement and their kids’ education. He explained that if your spending is getting out of control, then you can put guard-rails in place like automating credit card payments or deleting your saved credit card off your phone.
Falling rents amid pandemic gives tenants power to negotiate
Some tenants have been given an opportunity to negotiate rental terms with landlords thanks to the economic impact of the COVID-19 pandemic. The average rent for properties across Canada was $1,723 in December, down 7.1 per cent from a year ago based on a monthly report from Rentals.ca. On the heels of that data, the head of the Metro Tenants' Associations told The Canadian Press that the pandemic “changed the game tremendously,” shifting power that landlords used to hold to renters.
Creating your own personalized financial plan
No two people are the same so it shouldn’t come as a surprise that your financial plan is any different. Investment Advisor Ryan Gerstel said COVID has underscored the importance of planning for unexpected changes to income such as job loss or reduced hours. Canadians also should make sure to account for this in their future savings strategy, he added. Gerstel suggested that Canadians start looking at their financial future now as people now have the free time to sit down and make plans during lockdown.
Retirement considerations during a pandemic
Some Canadians are having to take a second look at their retirement plans as they evaluate how their portfolio might perform in a low-interest rate environment amid ongoing volatility. CIBC’s Jamie Golombek said it’s important to remember you don’t need to take on the highest risk to get the biggest reward. He explained that many Canadians need to sit down and look at their savings plan, determine how much they need to live, and then figure out how much risk they actually need to take on. Golombek also said now is a good time to think about the kind of future lifestyle you want in retirement; for example, you may be rethinking whether or not you want to downsize after staying inside for almost a year.
“We could spend a third of our life in retirement. The fact is; getting out and getting working might be something that some people want to embrace.”
- CTV Chief Financial Commentator Pattie Lovett-Reid on on re-thinking the meaning of ‘retirement’