Rhonda's Financial Blog

Happy New Year! Plan to Have an Incredible 2012

Wednesday, January 18th, 2012

Now that 2011 is over it’s time to look forward to what 2012 may bring us.  As suggested last year, even though there’s no crystal ball to foresee market directions, there are a number of things we can do to ensure that we are financially better off than last year.

TFSA

We can help reduce your taxes with the Tax Free Savings Account (TFSA). You are now able to shelter an additional $5000 from taxes.  If you haven’t opened a TFSA yet you now have a total of $20,000 you can invest tax-free. Considering the taxman can take up to 46% in interest income it’s wise to fully take advantage of a TFSA.
If you bank with Scotiabank you can make contributions easily through Scotia On-line.  You have to use the contribution button to register it with the government. Otherwise you can send a cheque made out to ScotiaMcLeod just make sure you put your TFSA account number in the memo section.

RRSP

Your RRSP contribution room for 2011 is found on the bottom half of your notice of assessment or 18% of your annual income.The annual RRSP contribution limits are as follows:   

Year           2009              2010              2011      ­     
Limit       $21,000       $22,000      $22,450

RESP

Most of the time the government is taking money from us so when the government offers to give us money, we should all be lining up to take advantage of it. For those of you with children, don’t forget to take advantage of the Registered Education Savings Plan (RESP).  The government will add 20% of your-annual contribution (up to a maximum of $500 per child annually) towards your child’s post secondary education.  You may also receive the grant from unmade RESP contributions from previous years as well.

Image credit: Ludie Cochrane