Tax Tips for 2019

The New Year brings many tips to kickstart every age group’s 2019 financial resolutions. Need some inspiration to get organized? A Financial Post Article recommends steps to get your plans for wealth building this year kickstarted.

HEY KIDS … YOU CAN EARN $12,000 TAX FREE

Canadians can earn $12,069 under the basic personal exemption amount. High school students can earn this and don’t necessarily need to file a tax return. If you are a post-secondary student with an RESP, withdrawals called EAPs are taxable in the students’ hands. EAPs can be included within this exemption which shelters these EAPs and you can also claim a credit for the cost of tuition.

Tax Free Savings Accounts (TFSA) limits are increasing to $6,000 for 2019. As Canada’s most popular savings plan it works for all age groups and tax brackets.

RETIREES DEFER CPP AND ADD EARN 142%

The standard figure cited for delaying CPP to the age of 70 is that it increases benefits to 142 per cent of what they would be at 65. This is equivalent to a 9% per year return or better. Debt reduction is a higher priority than retirement this year for Canadians. A recent retirement survey indicated that paying down debt was the top financial priority for survey respondents, followed by keeping up with bills and getting by (14 per cent), growing wealth (12 per cent) and saving for a vacation (7 per cent). Almost a third (29 per cent) said they’ve taken on more debt in the past 12 months.  Retirement came in only at 5%.

CPP is ENCHANCED

Another Financial Post article provides the good news that CPP will replace 33.33 per cent of the average worker’s lifetime earnings to a higher pensionable earnings limit of $65,400 over the next 50 years. Learn more read the article here.

GET MORE ACTIVE IN 2019

“There’s rarely enough money to do everything, so it’s critical to make the most of the money you earn by prioritizing both sides of your balance sheet – not debt or savings, but both,” said Golombek. “It boils down to trade-offs, and balancing your priorities both now and down the road.  Regardless of your goals, being active with your financial plan and investment portfolios ensures you reach your goals. Our Hampton Securities Advisors can help you build a plan, manage a financial plan and more- reach out to us here.