I’ve been pretty busy with the RRSP campaign where I work. Since the beginning of January, I have been meeting with my clients to deposit their RRSP contributions.

Therefore, I guess you will probably meet with your financial advisor for your 2010 RRSP contribution in the upcoming weeks. So I thought of gathering a few RRSP facts and FAQs:

How much can I contribute to my RRSP for 2009?

-         The general rule is 18% of your declared income in 2008.

-         However, if you have pension plan, you must take a look at your Federal Notice of Assessment (the document sent to you by the government after you filed your taxes. It will show you maximum contribution available for your RRSP.

What is the maximum RRSP contribution for 2009?

-         The maximum is 18% of your declared income up to $21,000.

-         If you are contributing for 2010, the RRSP contribution limit is $22,000.

-         You can exceed this amount by $2,000 but you will not get a tax return from this amount. Any RRSP contribution beyond the $2,000 overcontibution allowed will be penalized by a 1% tax monthly.

How can I contribute by using my unused RRSP contributions from past years?

-         The total amount of your unused RRSP contributions is shown on your Federal Notice of Assessment.

-         You are allowed to contribute this amount in total and get the full tax return (but make sure to read the following point before doing so).

Should I use all my RRSP contributions in one year?

-         You should be careful about your tax brackets and contribute as much to your RRSP in order to get the highest tax returns possible.

-         To take a look at your tax bracket, you can use Ernst and Young Tax Table and RRSP tax saving calculator (it’s free!). I suggest you play around with different RRSP contributions to see how much you will receive in tax returns.

Should I take an RRSP loan to maximize my RRSP contribution?

-         RRSP loans are effective if you plan to pay it back within 24 months. If you are to take a 5 year RRSP loan, you are better off starting a systematic investment in you RRRSP and forget about your tax return this year.

-         The interest paid on an RRSP loan is not tax deductible.

-         Some strategies include an RRSP loan to maximize your tax return while it serves to pay back the loan. This is interesting when you think about your retirement (long term strategy).

-         An RRSP loan can also be used for the Home Buyer Plan (HBP). You take a big RRSP loan, get the tax return and withdraw your RRSP under the HBP rules (so you don’t get taxed) to pay back the RRSP loan. Therefore, you receive the RRSP contribution tax return right away and this could help to increase your cash down or pay for other expenses (moving, lawyer fees, painting, etc.).

What is best: RRSP or TFSA?

-         If you think about your retirement and you wish to get a tax return, the RRSP contribution is the best option.

-         However, if there is a possibility of withdrawing the money within the next 3-5 years for a specific project, you are better off with the TFSA.

-         When you calculate the comparison between RRSP contribution vs TFSA contribution for retirement, it all comes back to the same thing.

Which kind of investments can go into an RRSP account?

-         Almost all kinds of investments (certificate of deposits, bonds, mutual funds, stocks) are allowed.

-         You are not limited to the Canadian market anymore (there used to be a 30% maximum rule for international equities).

Got an RRSP question?

If you have other questions, please fee to post a comment and I will add your questions and my answers into this post.

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Picture this: a nice evening with friends, they take 2 cars to go somewhere after a nice dinner, the road is a bit slippery (it’s a real winter in Montreal after all ), the first car does a U turn since he just missed his turn, the other car follows… BANG! We have a bumper that just kissed the door of the other car.

How stupid do you feel? You just hit… your friend’s car. Of all the car accidents you could have, this is probably the best story to tell when you are with your friends around a pitcher of cold beer. Well, this is exactly what happened to 2 of my friends a few weeks ago.

We had a good laugh (nobody got hurt and they even got the nicest cop around to complete the paperwork and a guy on the street brought them coffee and donuts… I’m telling you, people from Montreal know how to live ). However, the rest of the story got me thinking about the most important thing about car insurance; filing a car insurance claim.

Car insurance cheap quotes first?

When we look for car insurance, most of us will consider only one criteria: we want the cheapest insurance quote. However, once you are pretty happy about your car insurance premium, the second factor (the one that will really determine if you have good car insurance or not) is how easy it is to file an insurance claim.

We don’t really think about this part until we get into a car accident. Even myself, I’ve been looking for the cheapest car insurance quote for the past 12 years (oh boy, that doesn’t help me stay young…). Yet, I have never made a claim from my car insurance company so far (knock on wood!) so I don’t really know how great my car insurance is…

Back to my friend’s story (and how his car insurance dealt with him!)

I’ll tell you upfront, my friend is with TD Insurance. He got a nice quote since he went to a school who has an affiliation with Meloche Monnex (who belongs to TD Insurance group). So his first criteria was no different than mine when he picked his car insurance: he wanted a cheap car insurance premium… period.

But does cheap premium means cheap service? Let me tell you that it is not the case with TD! Right after filing the paperwork with the police officer, my friend called his car insurance company to explain the situation. The next morning he drove his car to a garage (as instructed by TD) and got a courtesy vehicle right away.

Filing the car insurance claim paperwork was easy, people who served him were easy to deal with and proactive.  My friend didn’t have to wait long to get his car back. This is what we call a great service experience!

I am often the first one to step up and tell the world how bad customer service was at one place or another (remember my Roger’s Story, my friend’s fight with Bell or my Baton Rouge’s friend story?… go see them, you’ll have a good laugh ). But when it is the time to recognize a company is going above what we can reasonably expect, I will also step up and tell everyone. So here it goes:

TD CAR INSURANCE ROCKS!

(Isn’t this a great plug? Hahaha!)

But seriously folks, I wouldn’t write about it if I found they weren’t great So if you are looking to get cheap car insurance with great service, I’ve picked a few car insurance companies here:

TD Car Insurance

Enough said about them, to get a quote, just enter your postal code there in the add above, the process is easy and it doesn’t cost anything. On top of that, you don’t even have to talk to anybody or have anyone calling you… simply love it!

National Bank car Insurance

They are usually very picky in their drivers’ selection (almost no tickets, no insurance claim, etc) but they offer very cheap insurance quotes.

Royal Bank Car Insurance

What can I say besides; I love the insurance pendent of any Canadian banks? Seriously, they are solid and reliable

Belairdirect Car Insurance

They seem to be pretty aggressive on their pricing too. However, they are fussy if you drive in the USA and I have not heard anything back from them with regards to filing an insurance claim…

Kanetix.ca Car Insurance Quote Service

You can search for the best car insurance quotes among the above listed companies (and many others). Great tool to make a quick (and free!) search on the web.

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Funny enough, we are only at the beginning of February and I am almost done with my RRSP campaign The fact that I have started at the very beginning of January helped a lot

On the weight side, I am at 183 lbs. However, I have a meeting with my trainer next week to change my training program. I will put more emphasis on weight loss instead of weight lifting I’ll give myself about 2 months to lose another 10 pounds and be around 175lbs before spring. I’ll just have to remember my goals when I am in front of a sugar pie over the weekend

Here are some good reads for this week:

Canadian Finance Blog celebrates its first anniversary!

Should I buy ETF or index funds? By ABCs of Investing

Complete tax return myself or should I hire an accountant? By Four Pillars (I prefer hiring an accountant!)

Questions regarding quicktax 2009 by Canadian Capitalist.

6 common myths about stock market returns by Million Dollar Journey – must read!

Making sense of the US debt at Canadian Dream.

Best performing stocks of 2010 : TSX60 by Buy my Stock Picks.

7 warning signs you need to repair your portfolio by The Dividend Guy.

Q&A with a 6 figure blogger: Flexo by Studenomic – very inspiring!

Do “C” students deserve “A” lifestyle by Financial Samurai.

Deciding how much to allocate in your budget by Bibble Money Matters.

The ultimate Frugal Office by Frugal Dad.

How to buy Super Bowl Tickets by Cash Money Life.

Carnivals:

Best of Money Carnival

Festival of Frugality

Carnival of Personal Finance

Money Hack Carnival

Festival of Stocks

If you liked this articles, you might want to sign for my FULL RSS FEEDS. Then, you will get my daily post to your email and can read it at any time. To subscribe CLICK HERE

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I have been contacted by MoneySuperMarket.com to publish an informative post on Cash ISA accounts. This is a financial product available to residents in the United Kingdom. Since we have UK readers, I thought it would be a nice initiative. In fact, it is pretty similar to the TFSA (Tax Free Savings Account) in Canada on the taxation perspective.

If you live in the UK and want to start saving your money, you should consider a cash ISA. They’re not as complex as some people would have you believe, and in this article I will explain exactly how a cash ISA works, how it can benefit you, and how to get the best out of one.

So, how exactly are Cash ISAs different to traditional savings accounts? Well, there’s only really one major difference between the two – and that’s the fact that with an ISA, you don’t pay tax on any interest you earn. Interest earned in a standard saver will be taxed at the usual 20% (or 40% if you pay the higher rate), whereas with a cash ISA, every penny is yours – although any money you withdraw will cease to receive this benefit.

As it stands currently, a UK based saver under the age of fifty can deposit £3,600 per tax year in an ISA, while over fifties can deposit £5,100. This is due to change at the start of April though, meaning that everybody can pay in the full £5,100 in the 2010/11 tax year. It is worth remembering that any money withdrawn from your ISA still counts towards the yearly amount – for example, if you were to place the full £5,100 in an ISA at the start of the tax year and subsequently withdraw £100, you would not be able to replace it.

Due to the fact that you are not paying interest, an ISA’s interest rate doesn’t need to be as high as a traditional saver’s, for example, a normal saver would have to pay 3.5% in gross interest in order to earn as much net interest as an ISA that pays 3% – and if you’re a higher rate payer, your regular saver account would have to pay 5%.

Once you’ve got your ISA though, don’t just assume you have the best rate – providers change their rates quite often, and the wise saver will do their best to keep abreast of the deals offered. If you do decide to transfer your ISA however, under no circumstances should you withdraw the full balance, as you will receive no tax benefit at all. Your new provider should have a form for you to fill in, and they will then deal with the transfer. Many providers do not tie you to the account for a set period of time, so it is worth checking every so often that you are getting the best rate you can.

As mentioned previously, shopping around a little can bag you a far better interest rate than those offered initially Cash ISAs can make all the difference to your savings account, so finding the best one for you is of the highest importance. Compare cash ISAs at moneysupermarket to get the best deals.

This post was provided by the Cash ISAs team at moneysupermarket.com

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This year will be quite interesting in terms of our financial situation. Since September 2009, I work 4 days a week at my day job in order to devote more time to my online business. While my wife quit her job in 2009 to stay home with our children, I have managed to reach the milestone of a 6 digit income. In 2010, we are looking to accumulate $31,000 to pay back the loan to my parents. Since having taken the decision to look at my net worth on a monthly basis, I tend to be more careful with my spending and I always have my parents’ loan in mind.

So here’s where I stand after the first month:

ASSETS:

DEBTS:

TOTAL NET WORTH : $108,445

Major Changes:

I don’t think it will be like this every month, but we had a few major money movements.

Parents’ Loan

I managed to get an extra $3,000 from my year end  bonus (I didn’t get a bigger bonus, I just decided to use this amount of money differently) and give it back to my parents right away. Since I have to finish this debt in November of this year, I do not want to wait to give them money back when I have an opportunity. Since I know that I may spend the money if it stays in my bank account, I would rather start making payments

Getting ready for wedding$

I am best man for 2 weddings this year (my best friend and my sister-in-law). Therefore, we’ve already started to spend money towards their wedding gifts. Since they are very important people to us, we will definitely not be cheap . This is what explains my small net worth increase even if I was concentrated in paying back my debts.

What is coming in February?

I am almost sure that I will be able to make another payment to my parents! The online company has shown a great start to 2010 so we will probably be able to withdraw money from it. My partner has to buy a computer so I will withdraw the same amount to pay back my parents. The only problem is that I started to have pixel bars showing on my laptop screens… I am in the process of requesting an extended warranty payment from my credit card… I don’t know if it will work (gotta find my bill first!).

Follow other PF Bloggers net worth update at The Suburban Dollar.

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