(This article was provided by Darryl Metzger, Financial Advisor at Edward Jones, Stittsville. Get in touch with Darryl to learn more of how he can help with your financial planning – 1300 Stittsville Main Street, Suite 200, Stittsville, Ontario. Telephone: 613-831-8028. Visit the Edward Jones website: https://www.edwardjones.ca/ca-en/financial-advisor/darryl-metzger.)
As the calendar page turns toward the year’s end, it is time to take stock and do an annual check on your financial strategy for 2024.
This practice helps to ensure that your personal strategy continues to reflect all the changes that have taken place over the last year, and those you anticipate will take place in the year ahead.
2023 introduced high interest rates and inflation, and economic and political uncertainty. While these factors impact every Canadian differently, everyone can benefit from a review of where they thought they would be vs. where they are as the year comes to an end. You’ll also want to consider that events like these (or others!) could happen again in 2024.
Here are three quick things to add to your checklist to review with a financial advisor.
1. Self-assessment
- Your investment portfolio should be designed for your specific goals, time horizon, and your comfort with risk. If your goals have changed, perhaps your portfolio needs to as well.
2. Tax Efficiency
- Evaluate the implications of your investments and minimize any unnecessary tax burdens into 2024.
3. Maximize your impact
- Discuss with your financial advisor how best to maximize your charitable contributions from your Registered Retirement Savings Plans (RRSPs); consider making additional contributions for 2023 if you can.
Last point. Remember, change is inevitable. That’s why It’s important to continuously review your plan to help ensure it reflects all the information you have today as you approach the road ahead.
The year-end check is like a year-end financial housekeeping exercise. Take time to celebrate your achievements and face 2024 with hope, purpose and a well-prepared financial strategy for you and your family.
Talk to Darryl Metzger, financial advisor, today about important steps you can take before the end of the year.
Jaelen’s Journey to Home Ownership
As the year draws to a close, so do opportunities for new home buyers in Canada to get some much-needed help to see their dream of homeownership become a reality in 2024.
Meet Jaelen who has rented for years and wants to buy a house. Jaelen has been saving but could still use some help and is eager to qualify for Canada’s first-time home buyer’s account called First Home Savings Account (FHSA).
Jaelen has reviewed the qualification criteria and meets the age requirement of being 18-71.
The FHSA is a great way for Jaelen to start saving for that first home by making tax-deductible contributions into an account and later making withdrawals that are tax-free if that money is used toward the purchase of qualifying primary residence in Canada. More on that a little later.
How will Jaelen do it?
Let’s first look at allowable contributions.
- Up to $8K per calendar year with the ability to carry up to $8,000 forward if an account is opened (meaning a potential $16,000 limit in one year),
- Up to a lifetime maximum of $40K over a 15-year period.
Withdrawals
Along with being tax-free, withdrawals can be combined with funds from a Tax-Free Savings Account or RRSP Home Buyer’s Plan.
They can also be combined with another person’s FHSA when purchasing a home together.
Once Jaelen is ready, there are some important options to consider and follow when deciding to close the FHSA.
- It must be closed in the year following the purchase of a qualifying home, or
- Within15 years of the account opening date, or
- By December 31st of the year the buyer turns 71.
- Funds can be transferred to an RRSP or RRIF tax-free prior to the FHSA closure.
The FHSA could be a pivotal step toward making Jalen’s dream of home ownership a reality.
The FHSA does have some more stringent criteria than other registered plans, but for the right person, like Jaelen – and many other Canadians, this account combined with the right advice could make home ownership a reality.