Your New Year’s Financial Checklist
The beginning of a new year is an opportune time to revisit certain aspects of your wealth management. If you don’t know where to start, here are a handful of ideas. For more information, please call the office.
Contribute to the RRSP. The Registered Retirement Savings Plan (RRSP) deadline for the 2024 tax year is March 3, 2025, limited to 18 percent of 2023 earned income to a maximum of $31,560. Don’t forget: you can make a contribution, but can defer the deduction to a future year if you believe your marginal tax rate will be substantially higher.
Fund your TFSA. The 2025 Tax-Free Savings Account (TFSA) annual dollar amount is $7,000, bringing the eligible lifetime contribution limit to $102,000. Have you fully contributed?
Revisit account beneficiaries. This is especially important if you’ve left a job or had changing life circumstances. If you need assistance with investment accounts, let’s connect.
Review your estate plan. Do you have updated documents in place, including a will & estate plan, power of attorney (or related documents, i.e., healthcare mandate) or trusts to support beneficiaries?
Review your insurance. Even if you have the right insurance in place, rates can change over time or new discounts or programs may be available. Consider the opportunity to negotiate better rates, such as by bundling multiple policies like auto and home.
Evaluate your savings. Even for high-net-worth investors, a rising cost of living underscores the value of a budget to identify spending patterns. Effective saving remains one of the few aspects of wealth management that is fully within our control.
Manage debt. An estimated 1.2 million mortgages in Canada are up for renewal at higher rates in 2025 alone. Despite easing interest rates in 2024, borrowers are still seeing some of the highest mortgage rates in recent times. If you have a renewing mortgage, it maybe an opportune time to explore options. Start early to allow time to negotiate better terms or potentially switch lenders. If you have high-interest debt, consider prioritizing repayment or refinancing as rates change.
Account for changes in health status. In our work as advisors, many are seeing clients overlook the impact of health changes in wealth planning. If you or your family members experience longer-term changes, from diabetes to dementia, valuable support may be available. At a basic level, one overlooked benefit is the disability tax credit.
Organize financial documents. With tax season just around the corner, consider organizing both digital and paper financial documents, ensuring secure storage for sensitive documents.
Holding a bare trust? Note that CRA will not require bare trusts to file a tax return for the 2024 tax year. Draft legislation has been introduced that, if passed, will exempt trusts with a fair market value of $50,000 or less throughout the year. If all parties to the trust are related individuals, the exemption will rise to $250,000 if only certain assets are held (i.e., GICs, stocks, bonds, mutual funds or ETFs). This will apply to bare trusts with years ending December 31, 2025, and later.
