RRSP 101 (All RSP questions answered)
| Poll:RRSP 101 (All RSP questions answered) | |||
| Choice | Stats | ||
| I find this info useful, thanks. | 83% (20) |    |
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| this is basic info, i know this already! | 17% (4) | |
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| Poll:RRSP 101 (All RSP questions answered) | |||
| Choice | Stats | ||
| I find this info useful, thanks. | 83% (20) | |
|
| this is basic info, i know this already! | 17% (4) | |
|
Very helpfully and informative topic, I think Canadian Desi is different than other country. They are more with helping nature than other country I have had experience.
Thank you, Wish you happy New Year!
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"First they ignore you, then they laugh at you, then they fight you, then you win" - Mahatma Gandhi
Quote:
Originally posted by regar
RRSP LOAN for the first time home buyers plan.
The amount of 15000 $ that you borrowed is from your account and you have to pay back in 15 equal monthly deposits if in any year you do not pay back the amount(1/15) then it is treated as part of your income that year.
The contribution you are making now is part of your eligible portion based on your previous years income .
This is the tricky part of taking RRSP home buyers loan as you have to make sure to have those funds every year in addition to your other plans for your planing of finances.
Thanks for your reply. Does it mean that I have to put $15k/15 = $1k every year for 15 yrs in my RRSP Savings account?(which is by the way with ING as they give good interest rates, I was planning to buy a house and hence I decided to open a RRSP savings account instead of self direct trading account or long term GIC). Is it possible that I can transfer my RRSP account to another bank eg ICICI bank and then pay 15k in to this account so that I get better interest rate or can I open a new RRSP self direct trading account with TDwaterhouse or Scotia Mcleod etc and pay the 15k to this account?
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Indian IT Guys Rules........
Quote:
Originally posted by sallusworld
Quote:
Originally posted by regar
RRSP LOAN for the first time home buyers plan.
The amount of 15000 $ that you borrowed is from your account and you have to pay back in 15 equal monthly deposits if in any year you do not pay back the amount(1/15) then it is treated as part of your income that year.
The contribution you are making now is part of your eligible portion based on your previous years income .
This is the tricky part of taking RRSP home buyers loan as you have to make sure to have those funds every year in addition to your other plans for your planing of finances.
Thanks for your reply. Does it mean that I have to put $15k/15 = $1k every year for 15 yrs in my RRSP Savings account?(which is by the way with ING as they give good interest rates, I was planning to buy a house and hence I decided to open a RRSP savings account instead of self direct trading account or long term GIC). Is it possible that I can transfer my RRSP account to another bank eg ICICI bank and then pay 15k in to this account so that I get better interest rate or can I open a new RRSP self direct trading account with TDwaterhouse or Scotia Mcleod etc and pay the 15k to this account?
I would like to clarify the RRSP contributions and withdrawals under HOME BUYER's PLAN in a layman's language.
Everybody knows that RRSP stands for REGISTERED RETIREMENT SAVINGS PLAN which means the account is registered with CRA. You can open as many RRSP accounts with as many institutions and CRA will track them in to one account.
When you contribute money in your RRSP account with any one or more financial institutions, they send these deposit information to CRA about the money invested by you and issue you contribution slips. At the time of filing your tax returns you claim tax deduction for the amount contributed by you in your RRSP. The CRA maintains all the information of your RRSP contributions in one account as mentioned above and sends you the information through NOTICE OF ASSESSEMENT about the balance in your RRSP account, the contribution room available for future years and the amount claimed on your returns for the purpose of tax deductions.
Similarly when you withdraw money from from your RRSP account/s (does not matter if from one or more RRSP accounts with one or more financial institution) for the purpose of buying your first home the financial institutions send this information to CRA and it tracks your withdrawal from your registered account and start maintaining another account for you for the purpose of withdrawals under HOME BUYER PLAN and intimates you about the balance repayable in this account every year in your NOTICE OF ASSESSMENT.
You have to start repaying money withdraw under HBP back 2 years after taking possession of your home. The repaying again is done by you by contributing to your RRSP (does not matter one or more RRSP accounts with any institution). This repayment has to be done in maximum of 15 years and has to be a minimum of 1/15th every year of the total amount withdrawn under HBP. For doing this repayment, you allocate a part of the RRSP contribution for that year at the time of filing your tax return and CRA tracks this repayment also and intimates you about your future installment in your NOA.
To clarify it further suppose you have 3 different RRSP accounts with 3 different financial institutions, A B & C. Let us suppose you withdraw $5000 from A, $6000 from B and $4000 from institution C in the year 2006. The total withdrawal of $15,000 would be tracked by CRA as these institutions would send this info to CRA. After 2 years of taking possession of your home, your repayment liability begins in 2009 and it is $1,000 for the first instalment. Let us say that in 2009 you contributed $5000 towards your RRSP. Now it us up to you to either allocate $1000 or any other amount towards repayment under HBP. The amount allocated towards REPAYMENT under HBP would be adjusted and for the remaining amount you will get tax deduction. When you receive your NOA the CRA will advise you every thing about your RRSP and HBP account and every thing would be crystal clear.
If in any year you do not repay any amount towards HBP, the installment amount would be added to your income and you would have to pay tax on that amount. Similarly if you paid more than the required installment amount, then the instalment amount for the next year would be decreased and it would be 1/14th of the remaining HBP balance.
I hope this would make things more clear.
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Pramod Chopra
Senior Mortgage Consultant
Mortgage Alliance Company of Canada
Location: carl sagan's universe
Posted on: 02-01-07 17:36:21
Quote:
Originally posted by regar
Thanks for your reply. Does it mean that I have to put $15k/15 = $1k every year for 15 yrs in my RRSP Savings account?(which is by the way with ING as they give good interest rates, I was planning to buy a house and hence I decided to open a RRSP savings account instead of self direct trading account or long term GIC). Is it possible that I can transfer my RRSP account to another bank eg ICICI bank and then pay 15k in to this account so that I get better interest rate or can I open a new RRSP self direct trading account with TDwaterhouse or Scotia Mcleod etc and pay the 15k to this account?
The simple answer to this question is a resounding 'YES'. You can withdraw from one account and repay into another.
Similarly you can withdraw from one investment vehicle like a GIC and repay into another investment vehicle like mutual funds.
Please also read the summarized treatise by Pramod.
understood. thanks for your help.
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Indian IT Guys Rules........
Location: carl sagan's universe
Posted on: 05-01-07 00:01:05
Since it is RRSP season and perhaps several of you are thinking about investments for the future and tax returns here is a round-up.
CIBC thinks TSX will hit 14,250 by end 2007. It is currently at 12,553.60
http://www.theglobeandmail.com/servlet/story/RTGAM.20070104.wcibc-tsx0104/BNStory/Business/home
Also read:
I hope you had an enjoyable holiday season. Looking back on the investment climate for 2006, equity markets rewarded investors for the fourth straight year, with most world markets recording healthy gains. Continued low interest rates, the growth of emerging market economies and general optimism among investors and consumers alike helped to keep share prices strong, while bond yields remained low. The Canadian loonie hit a 28-year high relative to the U.S. greenback in May, but both dollars weakened relative to the euro and other world currencies as 2006 wound down.
In Canada, the S&P/TSX Composite Index declined sharply from May to June, but recovered to end the year with impressive gains. For the year, the index was led higher by the materials sector, as mining companies benefited from high gold and other metals prices, mergers and acquisitions and solid global growth. Technology and financial services were the next best-performing sectors. The energy sector also made gains, but they were modest relative to previous years, as oil and gas prices cooled in the second half of the year.
For Canadian investors, one of the biggest jolts of 2006 was the federal government’s surprise Halloween announcement that the tax advantages of income trusts would be eliminated by 2011. The trust market suffered an immediate sell-off in the days that followed as income-hungry investors turned to dividend-paying shares. Though trust prices have since made a partial recovery, the sector faces a number of challenges as it restructures over the next four years.
In the U.S., stocks mustered a sustained and broad-based rally in the latter half of the year after a choppy first half, with the energy, telecommunications, materials and utilities sectors all making solid gains. Although the important U.S. housing sector was hurt by rising interest rates in 2006, overall corporate earnings remained robust and companies are flush with cash.
Looking ahead, many economists believe that the Canadian and U.S. economies have entered a period of slower growth, but that after this pause, economic growth could re-accelerate in late 2007. Many analysts also see the potential for interest rate cuts this year, which would be positive for bond and equity markets. Strong economic growth in Europe, China, India and other markets, meanwhile, is expected to support global equity markets.
As we start a new year, our focus is on portfolio planning and investing before the March 1 RRSP deadline. I will be contacting you soon to set up an appointment. In the meantime, if you have any questions or concerns about your investment portfolio, please do not hesitate to call.
I wish you and your family all the best in 2007
Location: carl sagan's universe
Posted on: 05-01-07 00:03:32
I also wish to add that CIBC predicted that TSX would hit 13,750 end 2006.
However, even though it crossed 13,000 it finally receded to close at around 12,900 year end on Dec 29, 2006
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