U.S. became a member last August and, now, so has most of the eurozone. Unfortunately, it’s not a club you want to join.

Late last week, Standard and Poor’s (S&P) announced it was downgrading the credit rating of nine of the eurozone’s 16 members including behemoths France and Spain. In addition, 14 of the 16 members have “negative outlooks” which means S&P believes, “that there is at least a one-in-three chance that the rating will be lowered in 2012 or 2013.” The only two countries with stable credit outlooks are Germany (no surprise) and Slovakia, a former Communist country that became an independent state in 1993 after the dissolution of Czechoslovakia.

What does this mean for the future of Europe and the economy? 

The New York Times called it, “A move that may have more symbolic than fundamental financial impact, but served as a reminder that Europe’s economic woes were far from over.” Underscoring that, the U.S. downgrade, has – so far – not caused much of a problem. The 10-year U.S. Treasury bond yielded a slim 1.85 percent last Friday, an indication that investors still view the U.S. as a safe haven. The bottom line is everybody knows Europe has problems and the downgrade, while not helpful, simply puts an exclamation point on the obvious. 

Back in the U.S., investors seemed more interested last week in tracking the economic momentum which included an eight-month high in consumer sentiment and an improved assessment of the economy from the Fed’s Beige Book. Econoday summed it up nicely when they wrote, “Traders and investors have been moving toward the position that European problems deserve less weight than they have been given in recent months.” That may be true in the short term, but if Europe craters because of their sovereign debt problems, it’s unlikely the U.S. of for that matter Canada will escape unscathed.

Unlike Las Vegas, what happens in Europe may not stay in Europe.

THE ANNUAL CONSUMER ELECTRONICS SHOW (CES) just wrapped up in Las Vegas and, as usual, it featured a dazzling array of must-have new gizmos and gadgets that will likely show up in your hand or in your family room sometime down the road. With 2,700 exhibitors and 150,000 total attendees, it’s the showcase event for everything electronic.  We thought it’d be fun to take a look at some of today’s commonplace gadgets that were introduced at CES and have you guess the year of their debut. So, here goes…

What year did these devices debut at CES?

 - Digital video discs (DVDs) 

- Satellite radio

- Videocassette recorder (VCR) 

- CD player 

- Blu-ray disc

- High-definition television

- Camcorder

It’s not all fun and games at a show like CES. As you can see from the list above, these devices have spawned major industries that generated tremendous economic activity. Innovation is vital for economic growth, and a show like CES helps spotlight the latest electronic advances and, perhaps, the next driver of the economy.  One of the big highlights at the just concluded show was the unveiling of LG’s 55-inch OLED TV packed with 3D bells and smart TV whistles. So, what in the world is an OLED TV? It’s a TV that uses a new display technology called OLED (Organic Light Emitting Diodes). OLED televisions are brighter, more efficient, thinner, and feature better refresh rates and contrast than either LCD or Plasma TVs. And boy is it thin. The LG 55-inch OLED TV is only 0.2 inches deep at its thinnest point and weighs a measly 16.5 pounds. If you’re an early adopter, you’ll want one of these beauties in your home theater later this year. (as a person that just hung a 60″ LCD in my living room, lighter would have been WAY better….)

Okay, here are the answers to the “device debut” question, according to CNBC. Digital video discs (1996), Satellite radio (2000), Videocassette recorder (1970), CD player (1981), Blu-ray disc (2003), High-definition television (1998), and Camcorder (1981). 

How many did you correctly answer?

Weekly Focus – Think About It

“It’s easy to come up with new ideas; the hard part is letting go of what worked for you two years ago, but will soon be out of date.” –Roger von Oech, author,
inventor, consultant

Best regards,

Kevin MacLeod CFP, CDFA

Before you spend any tax refund you receive, be sure to consider these five great ways to get the most out of your tax refund.

1. Pay off debt.  If you are carrying large credit card bills at double-digit interest rates, wipe the slate clean. If you have no credit card debt, pay down your mortgage. A $1,000 prepayment on a $100,000 mortgage amortized over 25 years at 7% will save you over $4,000 in interest.

2. Make a lump sum contribution to your Registered Retirement Savings Plan. The sooner you make your contribution, the sooner it starts compounding. A $1,000 RRSP contribution earning an annual average return of 10% over 25 years grows to nearly $11,000. And your RRSP contribution could result in a tax refund next year.

3. Pay back your RRSP Loan. If you took out a loan to make an RRSP contribution, use your refund to pay that loan back. You’ll save on interest charges and free up money that would otherwise go to your monthly loan payment.

4. Contribute to a Registered Education Savings Plan. The federal government provides a 20% grant on up to $2,500 contributed each year ($500). That’s free money.

5. Contribute to a Tax Free Savings Account. You can invest $5,000 per year in a TFSA. You don’t get a tax deduction, but any income earned in the account grows tax free.

The very best thing you can do with a tax refund is to plan to avoid getting one. After all, the refund is actually a repayment of an interest-free loan you made to the government by overpaying your taxes. If you make a big RRSP contribution each year, ask your employer to deduct less tax off your paycheques. You won’t get a big refund each spring, but your monthly cash flow will increase and you’ll be able to put your money to work in your interest instead of the government’s. Talk to your Human Resource Department about how to get less tax taken off at the source.

There are many things that can impact your short and long-term planning needs. Please don’t hesitate to contact us if you have any questions or if you require further assistance. 

I would like to say it was a nice summer, but as I am writing this it is less than 10 degrees out and raining, nothing you do not already know! Bring on the September Summer!!

Before I get into what I think you should expect with your investments over the next little while, I thought I would update you on some news.

In August I obtained a new designation called “CDFA” which means Certified Divorce Financial Analyst. This designation allows me to act as an advisor for people who are going through the divorce process. My work will help the client ensure that they understand the long term financial impact of their divorce settlement. With better knowledge you can make better decisions and have less regret over a potentially unfair settlement. I am looking for some willing volunteers to practice on, so if you know anyone going through a divorce perhaps you can introduce them to me. I believe they will get some great advice through my process!

Now – What can you expect your investments to do over the next few months or even couple of years? I have been asked this question many times over the last few weeks, so here is my answer:

So far the market has been flat after a remarkable recovery from the meltdown of 2008. We have many up days in the market and they are usually followed by down days that leave us right where we started. The only thing making money right now is investments that provide yield (interest earning).

I see two scenarios that are likely (this is my opinion only, as no one knows what is going to happen)

1) We see a further decline in the world economies that strongly negatively affects stocks and corporate debt. I believe this will be another short term sell off and an incredible opportunity to add to your holdings, if we do see a stock market decline of more than 20% (and I am not saying we will) then take advantage of this opportunity by buying more.

2) We see a flat market that avoids the “double dip” and equities are flat (as they are now). Stock picking will make more money than index investing and bond funds will still add yield and upside (albeit small upside account values). This will last for anywhere from now until 2013, but at some point (and WAY before the economy rebounds and WAY before anyone tells you it’s time to invest) the market will move significantly to the upside. You must stay invested to reap the benefits, even if it frustrates you to wait.

So what does this mean?
1. If you’re invested for the long term stay invested and take advantage of the dips, you will be rewarded.

2. If you are not invested, start slowly getting back into the market over the next year or so.

3. If you are invested for safety, income or yield, stay conservatively invested; there is still risk in equities.
Now on another note, I would like to revisit a topic I first brought up in May of this year:

Do ETF’s outperform managed mutual funds?
I will not re-explain the argument (please visit our website and read the original article) but rather give you an update on performance so far. Again I will be focusing on the Balanced ETF portfolios available against some of the normal balanced offerings I recommend to clients.

Balanced ETF – One Month = -.07 %
                               Three Month = .56%

Managed Balanced Solutions – One Month = range -.55% to 1.33 %
                                                              Three Month = range 1.44% to 2.80%

So far the managed solutions are outperforming the ETF offerings (by far in most cases), but it is still early!

Thank you for your support and I wish you the best for the fall season!

P.S. Now would be a great time to thank my clients for recommending me to their friends and family throughout the year. As you know, my business has been built on word-of-mouth advertising, and I take it as a tremendous compliment that you have the confidence in me to wave my flag. It really means a lot. I treat it as a huge responsibility and one that I never take lightly.  Thanks!

So why don’t more people use it? And if they are using it, are they using it properly?

One of the reasons I think people are hesitating to open their accounts is the way it has been marketed by the big banks in Canada including ING Bank. If you ask most people they will tell you that the money needs to go into a SAVINGS account, which pays around 1% interest. That is not very exciting and so why bother? If that was true it would be a good point.

In reality, the kind of investments best suited for a long term TFSA are stocks, bonds, or mutual funds. These types of investments are long term (more than 5 years) and have risk of loss, but even more important, have opportunity of higher gains. The higher the gains, the better the savings of future tax.  Regardless of the gain, whether it is a capital gain, dividend or interest, you will not pay tax on any income or withdrawals ever.

Another reason to use these types of investments in your TFSA is that your contributions are very limited (only $5000 per year is allowed); therefore you should be buying regularly, using a dollar cost averaging strategy. DCA significantly reduces risk.

So who should use the TSFA?

There are 3 very distinct groups of people that should take advantage of the TFSA.

1. Low income CLAIMERS  – If you are claiming little or no income (business owners or spouses of higher income earners) then you likely should not be contributing to RSP’s because you are already at a low tax rate. The TFSA could be one of the cornerstones to your long term retirement savings plan.

2. High Income Earners – If you already maximize your RSP contributions, your additional savings power should be used for a long term TFSA strategy. This could be some of the first assets you spend in your retirement, thus letting your RSP money stay tax deferred even longer. TFSA income does not impact your OAS benefits like RSP income does.

3. Anyone saving for a particular future expense or purchase – likely this is a short term goal and one of the only reasons to use guaranteed investments like Savings accounts, GIC’s etc. If you can stand the risk of some loss, then a low risk mutual fund will also work here.

Further discussion or RSP vs. TFSA

Generally speaking, whether it is better to contribute to a TFSA or an RRSP depends on two variables – your tax rate when you contribute funds and your tax rate when you withdraw funds. If you expect to be in a lower tax bracket when funds are withdrawn, an RRSP is probably a better investment. If you expect to be in a higher tax bracket when money is withdrawn; a TFSA may be the better choice. However, each individual situation is unique and other factors may come into play. Let’s discuss it further together to determine your best strategy.

Here is a link to a calculator that you can try if you wish…   http://www.taxtips.ca/calculators/tfsavsrrspcalculator.htm

• An open-ended fund that is listed and traded on a stock exchange, which can be bought or sold directly during trading hours, much like a stock.
• A basket of securities which may consist of stocks, bonds, or other assets such as commodities.
• The asset mix of an ETF generally aims to track the performance of an index.
• The different types can be broadly classified into equity, bond, and commodity ETFs.

An ETF is a passive investment due to the way it is managed. The ETF buys a portion of or the entire market, such as the TSX 60, instead of having a manager pick individual securities (stocks or bonds). Or instead of buying Bank of Montreal because it pays a dividend, the ETF would be ALL the companies in Canada that pay a dividend.  There are hundreds of ETF classifications available.

A mutual fund is an active investment where an actively managed fund manager or managers decide to buy or sell each individual stock or bond in their portfolio by studying the financials of the security and deciding whether or not they feel the investment is worthwhile for the risk taken. They will often meet the directors of the company and learn all they can about a company before investing in it. The most successful example of this kind of manager would be Warren Buffet. There are many examples of Managers that have terrible track records for the investment decisions they make however. They do not usually last long in the industry.

Which is better? Active or Passive? There have been many studies and as of yet there is no clear winner between passive ( ETF index) or actively managed portfolios.  Factors such as holding periods, rebalancing and investor behaviour make it difficult to call a clear winner.  Whichever way you are invested, the most important factor will always be time in the market. The longer you are invested the more money you will make, regardless of active or passive.

Having said that: ETF’s offer very low fees compared to a regular mutual fund because there is very little activity to manage the fund. The supporters of ETF investing suggest that the fees paid for actively managed funds are wasted because very few if any fund managers consistently beat the overall market. Active managers contend that their management style lowers volatility and that keeps investors invested when times are tough and that they add value to the overall portfolio and thus earn the fees that they charge.

Up until very recently, there were no ETF based mutual funds that I could recommend to my clients, they just didn’t exist. Now we have 2 companies that offer them, INVESCO Trimark and BMO (Guardian) have just launched these funds for retail investors (people like you).

ETF’s have been available for a few years now, but because they trade like stocks, they are mostly used by stockbrokers and day traders or sophisticated investors that are constantly trading to try to beat the market. 
Because for many years now I have been an advocate of balance d investing (bonds, stocks and cash – actively rebalanced to take advantage of market swings) I have been hoping the mutual fund industry would come up with a product that combines the low fees of the ETF and the active rebalancing of the portfolio. That time has come.

I love the idea of the low fees and the potential for greater gains that may come from the savings. I have been disappointed in the past with some fund managers that do really well for awhile, and then they have a couple of terrible years or they quit or change companies. There are however some very stable balanced funds or asset allocation funds that have been around for a very long time with excellent performance history compared to the index.  These are the funds I generally use for the majority of client assets. What we don’t know is whether or not the low fees translate to greater returns.

Where do we go from here?

I plan on tracking the performance of both the BMO ETF funds and the basket of balanced and Asset Allocation funds that make up the majority of the money that I manage for you.  I have personally moved some of my own money into the BMO ETF funds so I can more closely track the performance. Over the next few months we will see which strategy works best and make adjustments based on this. I plan on keeping you informed of the comparison as it could be a game changer for the industry. 

These funds are fairly new, so we can only compare the last 7 days of performance:

Balanced ETF  = .78%
Balanced Funds = range from 1.74% to 2.02%  
Asset Allocation Funds = range from .97% to 1.56%

So far the active is beating the passive, but it’s pretty early!
I welcome your comments, concerns and feedback.

Please feel free to forward this notice to anyone you think may appreciate it.

Fraudsters promise that funds can be withdrawn on a tax-free basis.
As published in “Investment Executive” Tuesday, April 6, 2010 by Jade Hemeon

Click here for the full article.

To reduce a deficit, you must either raise taxes/revenues, reduce spending or some combination of the two. While there is still stimulus spending provided, the government has clearly taken the approach of reducing spending although on a fairly modest level.

Government projections predict that the deficit will be essentially eliminated in five years. However, this is assuming that all the forecasts are correct, which is, of course, a very speculative exercise. On the personal level, the budget was pretty much ‘stay the course’ with few new tax initiatives.

Some points of interest:

1. Rollover of RRSP Proceeds to an RDSP
Budget 2010 proposes to extend the existing RRSP rollover rules to allow a rollover of a deceased individual’s RRSP/RRIF proceeds to the RDSP (Registered Disability Savings Plan) of a financially dependent infirm child or grandchild.

The amount of RRSP proceeds rolled over into an RDSP will not be permitted to exceed the beneficiary’s available RDSP contribution room and these amounts will be taxable to the RDSP beneficiary when withdrawn. This amount will reduce the available RDSP contribution room, and will not attract Canada Disability Savings Grants. These measures will be effective for deaths occurring on or after March 4, 2010.

2. Carry Forward of RDSP Grants & Bonds
The RDSP attracts government contributions as well as tax-deferred investing. Depending on contributions made and/or income levels, the government provides support in the form of either Canada Disability Savings Grants (CDSGs) and/or Canada Disability Savings Bonds (CDSBs). Under the current rules, beneficiaries are unable to carry forward unused CDSG and CDSB entitlements to future years.

In recognition of the fact that families of children with disabilities may not be able to contribute regularly to their plans, the budget proposes to allow a 10-year carry forward of the CDSGs and CDSBs. This means that a contributor can in effect ‘catch up’ on the grants for previous years when contributions were not made. Upon opening an RDSP, CDSB entitlements will be determined and paid into the plan for the preceding 10 years (as far back as 2008, the year RDSPs became available) since CDSBs are solely based on the beneficiary’s family income for those years and not on contributions. Balances of unused CDSG entitlements will also be determined and maintained for the same period. CDSGs will be paid on unused entitlements, up to an annual maximum of $10,500. The carry forward will be available starting in 2011.

3. Child Tax Benefits
For separated or divorced families where one individual receives Canada Child Tax Benefits (CTB), Universal Child Care Benefits (UCCB) and GST/HST credit amount on behalf of a child but the couple share custody of that child, Budget 2010 proposes to allow two eligible individuals to equally share the CTB and UCCB amounts in a particular month [and two eligible individuals to receive
GST/HST credit amounts in respect of a particular quarter if the recipients would be eligible to receive amounts under the CRA’s existing shared eligibility policy.] This will apply in cases where the child lives equally, more or less, with the two individuals who live separately. This measure will apply to benefits payable commencing July 2011.

4. Scholarship Exemption and Education Tax Credit
Budget 2006 introduced a full tax exemption for post-secondary scholarships, fellowships and bursaries. Budget 2010 proposes that a post-secondary program which primarily consists of research will be eligible for the Education Tax Credit, and the scholarship exemption, only if it leads to a specified diploma or degree.  These measures will apply to the 2010 and subsequent taxation years.

5. Freeze of Employment Insurance (EI) Premiums
EI premiums will remain at $1.73 per $100 of insurable earnings until the end of 2010.

6. On-line Notice of Assessment
Budget 2010 proposes to allow for the electronic issuance of Notices of Assessment of tax, and other notices such as GST/HST and other taxes. This measure will be effective upon certain legislative amendments receiving Royal Assent.

7. Medical Expense Tax Credit
Budget 2010 proposes to exclude from eligibility for the Medical Expense Tax Credit, any expenses incurred for purely cosmetic procedures, such as liposuction, hair replacement procedures, botox injections, and teeth whitening. A cosmetic procedure will only qualify for the medical expense tax credit if is required for medical or reconstructive purposes, such as a personal injury resulting from a car accident or disfiguring disease. This applies to expenses incurred after March 4, 2010.

8. U.S. Social Security Benefits
Currently, Canadian residents receiving social security benefits from the U.S. are subject to an 85 per cent inclusion rate. Budget 2010 proposes to reduce the inclusion rate to 50 per cent for Canadian residents who have been receiving U.S. Social Security benefits since before January 1, 1996 as well as for their spouses and common-law partners who are eligible to receive survivor benefits. This measure will apply to U.S. Social Security benefits received on or after January 1, 2010.

9. Employee Stock Options
Budget 2010 proposes a number of changes as they relate to employee stock option benefits.

a) Change to Stock Option Cash Out Deductibility
Budget 2010 proposes to prevent both the stock option deduction and a deduction by the employer from being claimed for the same employment benefit. This means that in cases where an employee acquires securities under a stock option agreement, but the employee decides to give up his or her stock option rights for a cash payment from the employer, an employer must elect to forgo the deduction for the cash payment to the employee. Therefore, a decision must be made for either the employee to benefit from the stock option deduction (with the election), or the employer may benefit by claiming a deduction (without the election). As of March 4, 2010, the dual deduction is no longer allowed.

b) Repeal of the Tax Deferral Election on Employer Stock Options
Currently, an employee of a publicly-traded company who exercises his or her stock options may elect to defer the employment benefit on up to $100,000 of vested qualifying stock options each year, until the disposition of the optioned securities. The employment benefit is the dollar amount representing the difference in price between what the employee pays for the stock and the actual price of the stock on the open market. The repeal of the tax deferral election takes effect for any stock options exercised after March 4, 2010. Budget 2010 proposes to repeal the tax deferral election and to require the employer to withhold tax on the value of the employment benefit to ensure that the taxes triggered as a result of exercising the stock options will be remitted to the government.

c) Tax relief for “Under-Water” Stocks obtained through a Stock Option
Budget 2010 also proposes to assist those who elected to defer their stock option benefits but the value of their stock has fallen below the deferred taxable employee benefit amount. Budget 2010 proposes to introduce a special elective tax treatment that will ensure that the tax liability on the deferred stock option benefit does not exceed the proceeds of disposition on the optioned stock. Although there is some tax relief resulting from the use of capital losses on the optioned securities against capital gains from other investments, this special elective tax treatment will help ease the tax burden for individuals who are currently in this position. The election must be filed before the filing due date for the 2010 tax year if optioned stocks were disposed of before 2010. If the optioned stocks have not yet been disposed, they must be disposed before the end of 2015 – and the election filed by no later than April 30, 2016.

10. Mineral Exploration Tax Credit
The mineral exploration tax credit is available to investors in flow-through shares. This credit is equal to 15 per cent of specified mineral exploration expenses incurred in Canada and renounced to flow-through share investors. Budget 2010 proposes to extend eligibility for the mineral exploration tax credit for one year, to flow-through share agreements entered into on or before March 31, 2011. Under the current “look-back” rule, funds raised in one calendar year with the benefit of the credit can be spent on eligible exploration up to the end of the following calendar year. For example, funds raised with the credit during the first three months of 2011 can support eligible exploration until the end of 2012.

If you have questions regarding the proposed 2010 Federal Budget please do not hesitate to contact your MoneyAdvisor.ca Financial Planner. Or, if you do not have a Financial Planner, contact Vaneesa Cline by phone (403) 209-6306 or email vcline@moneyadvisor.ca to put you in touch with a CFP that would be the best fit for you and your needs.

So, if you are considering putting some money into RRSP’s before the March 1, 2010 deadline, I have some simple strategies that may help you in the short and long-term.

Strategy # 1 – Start contributing to your RRSP’s sooner, rather than later.
There are many ways you can contribute to an RRSP: through a Pre-Authorized Chequing (PAC) plan, lump sum deposits or even borrowing to fund a lump sum deposit.

Monthly contributions versus yearly lump-sum contributions are not only easier, but also provide the benefits of dollar-cost averaging and compounding. If your employer offers a group RRSP, their contribution can be automatically deducted from your take home pay. If possible, maximize your contribution each year to make the most of tax-deferred compound investment returns.

Strategy # 2 – Build a diversified portfolio and include foreign content exposure
Studies have shown that up to 90% of a portfolio’s returns are determined not by the choice of individual securities, but by the way your portfolio is diversified. I can help you diversify your holdings by asset class, market sector, geographic region and investment style. The principle remains the same: by diversifying your holdings in a variety of ways, we lower the volatility of your portfolio while increasing its potential for higher returns.

Strategy # 3 – Utilize available contribution room.
If you have unused contribution room available or have fallen short on contributing to your RRSP, a RRSP loan may be right for you. Once you receive your income tax refund, you could use the refund to help pay down the loan.

Strategy # 4 – Consider income splitting.
If the future tax rate of your spouse is expected to be lower than yours, consider income splitting by directing contributions to a spousal RRSP.

What is best for my personal situation?
If you’re interested in learning more about RRSP’s and the options available to you, please do not hesitate to contact your MoneyAdvisor.ca Financial Planner. Or, if you do not have a Financial Planner, contact Vaneesa Cline by phone (403) 209-6306 or email vcline@moneyadvisor.ca to put you in touch with a CFP that would be the best fit for you and your needs.

The following outlines some common tax planning ideas and items that may need to be addressed, as well as some considerations for 2010.

[1] Open Up a TFSA
The new Tax-Free Savings Accounts, which arrived on January 1, 2009, are the ideal place to put up to $5,000 of savings per year and earn tax-free income and/or capital gains for life. The money never has to be withdrawn, but if it is, the withdrawn amount will form part of your TFSA contribution room beginning the following year. As is the case with RRSPs TFSA contribution room can be carried forward indefinitely.

[2] Maximize RRSP Contributions
The RRSP limit for 2009 is now the lesser of 18% of 2008 earned income and $21,000. Now would be a good time to get a head start on your 2009 contribution, if you have the cash. If not, consider making an RRSP contribution “in kind”.

[3] Set Up a Spousal RRSP
The primary benefit of a spousal RRSP is that funds withdrawn from such a plan can generally be taxed in the hands of the annuitant spouse, instead of the contributor spouse. If the annuitant spouse is in a lower tax bracket than the contributor spouse in the year of withdrawal, there may be an absolute and permanent tax saving.

[4] Earn Tax-Efficient Investment Income
For those who have maxed out their RRSP and TFSA contributions, consider tax-efficient investment income outside of these tax-sheltered plans by investing for Canadian dividends, which are eligible for the dividend tax credit, and capital gains, which are only half-taxable at your marginal rate.

[5] Consider a Debt-Swap Strategy
If you have both a mortgage and a portfolio of non-registered mutual funds, why not consider selling your mutual funds, paying off your mortgage and then borrowing back the money through a secured line of credit to buy back those original funds? By doing so, you can make otherwise non-deductible mortgage interest tax deductible. This strategy was just endorsed by the Supreme Court in the Lipson case in January 2009.

[6] Investigate Pension Splitting
If you received pension income in 2008, be sure to investigate whether splitting up to half of that income with your spouse of partner makes sense when you file your 2008 tax return this spring.

[7] Consider Income-Splitting
A spousal loan income-splitting strategy, whereby the higher income spouse or partner loans funds to the lower income spouse or partner to invest, may be ideal given the all-time record low prescribed rate, set at only 2% for the first quarter of 2009.

[8] Consider a Systematic Withdrawal Plan (SWP) or a T-Series Option
For clients seeking tax-effective cash flow from their mutual funds, consider setting up a systematic withdrawal plan, which allows funds to be withdrawn from their non-registered account on an extremely tax-efficient basis. Alternatively, a T-series option can offer potentially tax-deferred return of capital distributions, allowing clients to retain more of the investment income on an after-tax basis.

[9] Plan Now to Avoid a Tax Return
If you regularly get a large tax refund each spring, consider applying for a reduction of tax at source using CRA form T1213. Remember, this form needs to be completed each year.

[10] Donate “In Kind” to Charity
When planning your charitable giving for 2009, consider donating appreciated securities directly to your charity of choice. Not only will you get a tax receipt for the fair market value of the securities donated, but you will pay no tax on any accrued capital gains.

What is best for my personal situation?
If you’re interested in learning more, please do not hesitate to contact your MoneyAdvisor.ca Financial Planner. Or, if you do not have a Financial Planner, contact Vaneesa Cline by phone (403) 209-6306 or email vcline@moneyadvisor.ca to put you in touch with a CFP that would be the best fit for you and your needs.