By Peter Diekmeyer, Bankrate.com, February 2, 2010
Taking away the punch bowl
Borrowing costs have been low for some time now. But that may change soon.
Canada's real estate sector entered the new year with a huge tailwind at its back. Most key indicators of both current and future performance, including gross domestic product (GDP) growth, jobs and industry statistics, are either heading in the right direction or are downright bullish.
In a Monetary Policy Report released recently, the Bank of Canada raised its growth projections for the economy, which it now expects to expand by 2.9 per cent this year and by close to 3.5 per cent during 2011. "Economic growth is expected to become more solidly entrenched over the projection period as self-sustaining growth in private demand takes hold," the bank said.
* Video: The role of Canadian consumers in a recovery
As if that were not enough, the Canadian Real Estate Association (CREA) recently reported that existing homes sales through its Multiple Listing Service (MLS) hit an all-time high of 27,744 units during December, a full 72 per cent higher than the total recorded one year earlier. House prices are doing well, too -- the average price of homes sold during December came in at $337,410, up 19 per cent from the previous year.
What you should know about RRSPs
By Yuki Hayashi (canadianliving.com)
Interested in RRSPs but don't know how to get started? This quick and easy introduction to RRSPs is a great first step.
Do RRSPs have you scratching your head? Don't worry: You're not alone. Although 68 per cent of Canadians have a Registered Retirement Saving Plan (RRSP), that leaves nearly one-third of Canadian without. Some non-RRSPers choose to plan for retirement in other ways (primarily through employer-sponsored pensions) and others are financially savvy types managing their
investments using other vehicles.
But there's also another group who aren't buying in because they think they can't afford it, or they simply have no idea how to get started. If you're in that group, this article is for you.
Why you need an RRSP
Whether you're
financially savvy or not – but especially if you're not – RRSPs are a fantastic way to save for retirement. Think of an RRSP account as a lockbox for your savings, only better. Here's why.
• Contributions are tax deductable, bringing down your gross income for income tax purposes.
• Your RRSP is a tax shelter. You don't pay tax on your investment income (until it's withdrawn), meaning the overall value grows much faster.
• You won't be taxed on your RRSP until you make withdrawals, presumably during retirement. It will be taxed as income – most likely at a lower rate since you'll be earning less then as compared to now, your peak earning years.
How do I set up an RRSP account?
You can set up your RRSP through any financial institution: Your bank, credit union, trust or insurance company.
Meet with a personal
banking advisor so they can walk you through the process and the different types of RRSPs they offer.
RRSPs are investment portfolios, and returns will vary depending on market conditions. Your RRSP portfolio may contain mutual funds, savings deposits, treasury bills, GICs, equities and/or other options.
Talk with your expert to find the mix that works best for you given your tolerance for risk (and potential reward), as well as whether an individual or spousal RRSP would be best for you.
2 Ways To Check Your Credit Rating
Your credit rating is an important tool for qualifying for loans or credit and provides a picture of your financial health. Check your credit report once a year to confirm the accuracy of your personal and financial information, such as your loan payment history. It's easy to do. Here's how.
1. View your credit report online with Canada's two major credit-reporting agencies: Equifax (www.equifax.ca) and TransUnion (www.transunion.ca). Equifax charges $15.50 for the online service; TransUnion charges $14.95.
2. For a free report send in a request form by mail (the form is available online) with photocopies of two pieces of identification. You'll receive a full report in the mail in about two weeks.
If you spot any errors, contact the agency and correct the information. By doing this you can also make sure that you have not fallen victim to identity theft.
by Sara Ditta
Home Buyers' Plan (HBP)
The Home Buyers' Plan (HBP) is a program that allows you to withdraw up to $20,000 from your registered retirement savings plan (RRSPs) to buy or build a qualifying home for yourself or for a related person with a disability .
For 2009 and subsequent years, withdrawals made after January 27, 2009, the maximum is $25,000.
Click on the Canadian Renvue Agency Link below to learn more about the HBP.