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A.T. Financial Newsletter
RETIREMENT PLANNING
Expecting significant retirement income?
A TFSA may be better than an RRSP
Many Canadians face a tough choice at the start of each year, regarding whether to contribute to their Registered Retirement Savings Plan (RRSP) or Tax-Free Savings Account (TFSA). Both popular tax-planning tools have advantages. Which is best for you depends on a variety of factors. Your projected retirement income provides a good clue.

If your projected marginal tax rate will be lower after you retire than what you are paying now, an RRSP may be the better option. That's because the tax deductions you get when you contribute to an RRSP are likely to be larger than the tax you pay later when you withdraw the funds.

However, some Canadians will actually have higher incomes when they retire. For example some retiring employees have taken to "double dipping", after they leave their first careers. This involves collecting a pension, but continuing to provide work as private contractors in their
old felds of expertise. (A retired teacher continuing to take on substitute teaching mandates would be an example.) In such cases, their marginal tax rates when they retire could be higher that when they were working. For them, a TFSA may be a better option.
The MONEY file
TIPS AND TACTICS TO HELP YOU GET AHEAD
EDUCATION PLANNING
Why you may want your kids
to leave home broke
Most Canadians would shudder at the prospect at sending their kids out into the world with no financial assets. However, often they do worse - many are forced to leave home not just broke, but owing money as well.

The average student debt load after graduating from a four-year undergrad program now sits at around $27,000.1 This provides a strong indication that parents are having a hard time helping their kids pay their education expenses.

Worse, those costs are rising. Canadian full-time students in undergraduate programs paid 3.3% more on average in tuition fees for the 2013 / 2014 academic year this fall than they did a year earlier. This follows a 4.2% increase in 2012 / 2013.2

Getting a head start on those increases is crucial. A first step should involve consulting us, to make sure you are investing enough in your kids' Registered Education Savings Plans (RESPs) or an alternative dedicated account. They will be far better off if they leave home merely broke - as opposed to in debt.
1 The Canadian Federation of Students
2 Statistics Canada, The Daily, Sept. 12, 2013
EDUCATION PLANNING
Canadians working longer to finance kids' education

Many parents are responsible and well intentioned and, as a result, have invested signicant sums in their kids' Registered Education Savings Plans (RESPs). However according to a recent survey by a major Canadian financial institution, 60% of Canadian parents with children under the age of 25 are putting their own retirement goals on the back burner, to help pay for a child's schooling. Fully a third of parents surveyed even took on debt to help fund their kids' education.1

There are several reasons that parents are forced to put themselves into this uncomfortable position. These include a tough job market, rising education costs and increasing pressures on students to take on additional studies, such as advanced degrees. However, the most important reason is that many parents wait too long before starting to put money aside.

Make sure that does not happen to you. Talk to us about balancing your savings for your children's education and your own future.
1 CIBC poll, conducted by Leger Marketing, June 2013
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