Depends on how big his RRSP is. If it's huge or grows to be huge delaying can put him in a much higher tax bracket when it comes time to withdraw. So tax defer is not always the correct strategy. Especially if he's in such a low tax bracket now. The other thing is growth in an RRSP is fully taxable as income upon withdrawel whereas growth outside of RRSP is not. There are dividend tax credits as well as better tax treatment for capital gains.
Who's waiting to buy with the shitstorm that could be coming
- Thread starter angrymime666
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It's only 500k. If I wait till 70 it will be huge. I want access soon as you stated. I'll be at 14% and I can put the proceeds into a tfsa. I figure despite paying tax on withdrawal I'll make in up in growth over the 15 years and not pay tax on it ever again.
I am no expert in finance and have difficulty understanding what it means when
people say growth in RRSP is fully taxable.
Let say you have a RRSP that is worth 1 million but no other investment
saving. You convert your RRSP to RRIF at 65. For simplicity I'll make this
a story of someone who hardly ever worked in his life and lived on inheritance.
RRIF and OAS are his only significant source of income in his retirement.
His CPP income amounts to almost nothing.
Imagine the guy in this story is one lucky guy who contributed no more than
than $10,000 to his RRSP which was exhausted anyway and yet managed
to grow his $10k of investment to 1 million. In the 1st year of receiving RRIF
payment he makes a minimum withdrawal of 4% of his assets. His taxable
income would be $40,000 plus OAS benefits.
You can see that growth in your RRSP is indeed fully taxable.
But if I understand things correctly the size of growth is immaterial.
Your tax payment would be the same if that $1 million was the fruit of
capital appreciation from a total RRSP contribution of half a million.
It sounds to me a handsome RRIF income stream could
be tax efficient depending on the size of your net worth.
Whatever you withdraw in an RRSP is fully taxable as income simple as that.
Regardless of what your gain or withdraw rate is.
Everything in an RRSP is just waiting to be taxed and you can't spend any of it on sex workers until it's out.
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Good thread to review. Per post 24, the trick is trying to optimize the timing of RRSP withdrawls.
If you retire early, maybe live off RRSP money, as later it becomes a RRIF.
Make sure that RRIF mandated withdrawals are not so huge to mess up OAS pay outs at 71.
So bleed balance of RRSP before 71.
On the other hand, you can have a non registered account with a lot of dividend income, which can fund lifestyle in early retirement, and leave RRSP alone for a while.
But then at tax time the divvy gross up calculation on non reg account holdings dividend payment gives you a higher taxable income.
Which can have implications for OAS claw back tax
I know these are affluent Canadian first world tax problems, but still something to be aware of.
If you retire early, maybe live off RRSP money, as later it becomes a RRIF.
Make sure that RRIF mandated withdrawals are not so huge to mess up OAS pay outs at 71.
So bleed balance of RRSP before 71.
On the other hand, you can have a non registered account with a lot of dividend income, which can fund lifestyle in early retirement, and leave RRSP alone for a while.
But then at tax time the divvy gross up calculation on non reg account holdings dividend payment gives you a higher taxable income.
Which can have implications for OAS claw back tax
I know these are affluent Canadian first world tax problems, but still something to be aware of.
Just an FYI. Two months after oil hit 147 in 2008 the stock market crashed.
Set your calendars.....
Set your calendars.....
Agreed… I’d say the writing’s on the wall. Last year, I set aside an extra $300,000 which will be deployed during the next market crash so I can capitalize. Call me crazy, but I was ecstatic to see the price of oil spike last night. The only wildcard here is Trump… Can he really convince the markets that this war will soon be “over”? lol. Thoughts on this?
Yeah, the reversal today was disappointing. It would be good to see a few down days in a row.
The 82nd airborne was pulled from a training exercise and is now on standby alert. There is apparently some action on those betting sites about troops in Iran.
Whenever Trump discusses peace it means an escalation is happening. So imo hold that cash.
If they do send in the airborne it will likely be to try to secure the nuclear sites, or to try to take the government and leadership. But this isn't Venezuela which was an inside job. They will fight nasty from bunkers to the last man and all the booby traps you can imagine. Casualties will be huge. And that would result in calls from the war Hawks to escalate further.
They are talking draft now. Imagine the social unrest if they try it. Thats the market crash.
I know it sounds crazy right? I can't believe I'm saying it either. But I would sit on that 300 grand until it crashes because on the other end is a failure by Trump and Israel to win. Oil will jump as Iran will demand tribute to navigate the Straight.
Btw a win by Trump imo is Pyrric. They will destroy the oil infrastructure in Iran.
There no way to will blow over in the time frame he is thinking. The market for some reasons believes his reassurances. Not sure why but considering the lack of leadership in Iran, probably multiple figures or group fighting for control and acting in an ununified manner, no fucks given since there main source of income and infrastructure is fucked.
If they want to have any semblance of control they would have to invade and hold Iran. Even if they installed a government it would be completely undone. This is going to get so much worse.
Im sitting on cash, just waiting for a deal.
If they want to have any semblance of control they would have to invade and hold Iran. Even if they installed a government it would be completely undone. This is going to get so much worse.
Im sitting on cash, just waiting for a deal.
Having dry powder is great but how to decide when? Be prepared for your patience to be taxed. Markets are going through vicious gyrations reacting mostly to propaganda pressers by Trump, Hegseth et al supported by oodles of videos of shock and awe. Keep your salt shaker handy.
82nd is usually an effective unit but is ill suited for Hormuz. How long can the IRGC keep it choked, is the $64k question. Another choke point is the Bab el Mandeb but thus far it is quiet.
This is far, far from over. (I have posted an alternative hypothesis today in the Politics, Iran War section.) Safeguarding capital these days is my pre-eminent concern. We are headed for some serious turbulence.
82nd is usually an effective unit but is ill suited for Hormuz. How long can the IRGC keep it choked, is the $64k question. Another choke point is the Bab el Mandeb but thus far it is quiet.
This is far, far from over. (I have posted an alternative hypothesis today in the Politics, Iran War section.) Safeguarding capital these days is my pre-eminent concern. We are headed for some serious turbulence.
When was the last time America "finished" any kind of war? Particularly in the Middle East?
The idea of an effective US military died last century. The reality IMO is that they insert themselves into some hotspot as a way of scaling up the military industrial complex for the next 5-10 years.
But it's to "sustain" a war, not "win" one.
Wills.
Same here. Things seem to be getting much worse and it will be a while, quite a while, before I'll dip my toes. Lurking in the background is a very real threat of a black swan event in the private credit domain. Deutche Bank, HSBC, JPM, MS, GS are all trying to take defensive measures to mitigate their exposure. Canadian institutions are not exempt. This week a major Ontario pension fund declared a 6% Q instead of the double digits expected because of writedowns in real estate and private investments. I'll continue to hold all my oil, gas, and pipelines and wait for clarity before getting into the engg-construction-infrastructure companies.
I think everyone should settle onto the fact that in a few months a crash is going to happen. As always you can't predict exactly when. But its becoming more likely the USA is not going to win this. But that doesn't mean they won't escalate it.
Commodities dealing with war, fertilizer, energy will probably be fine.
Commodities dealing with war, fertilizer, energy will probably be fine.
It's a matter of time before Trump's utter reckelessness and incompetence catches up with him. His ineptitude has a lagging effect. So far the economy has been terrible, but the markets have held up because of AI. However, once the sheen rubs off, things are going to get much worse. No one knows when, but my thinking is that it has to be after the midterms, as Trump will pull every lever to try to rig the market for the midterms.
I did not wait for a full storm to deploy some cash.
I bought Thomson Reuters and Consellation Software in early Feb when there we fears that AI was going to eat their lunch, and ther share prices had sagged considerably.
In the foillwing 6 weeks earnings reports came in to tamp down fears.
TRI is up more than 25 % and CSU up more than 33%.
I am still holding both, but would sell quickly to free cash to dive into other opprotunities.
I also sold off some IYW, a USD tech focussed ETF, that has done great for me over the last 5 years or so.
But average P/E was too nosebleed high for me to hold as much as I did any more
I loaded up on Whitecap, Conoco Phillips oil plays with those plays.
Those are currently doing well with Iran sitution.
But will be sold off while they soar and the world adjusts to whatever becomes the new oil staus quo.
I put some funds in Value Village (SVV) a USD stock, and that move so far is a dud.
I will hold on for a few more quarters to see if things turn around.
This was bought as a recession resitant retailer play, but so far that has not worked out.
I bought Thomson Reuters and Consellation Software in early Feb when there we fears that AI was going to eat their lunch, and ther share prices had sagged considerably.
In the foillwing 6 weeks earnings reports came in to tamp down fears.
TRI is up more than 25 % and CSU up more than 33%.
I am still holding both, but would sell quickly to free cash to dive into other opprotunities.
I also sold off some IYW, a USD tech focussed ETF, that has done great for me over the last 5 years or so.
But average P/E was too nosebleed high for me to hold as much as I did any more
I loaded up on Whitecap, Conoco Phillips oil plays with those plays.
Those are currently doing well with Iran sitution.
But will be sold off while they soar and the world adjusts to whatever becomes the new oil staus quo.
I put some funds in Value Village (SVV) a USD stock, and that move so far is a dud.
I will hold on for a few more quarters to see if things turn around.
This was bought as a recession resitant retailer play, but so far that has not worked out.
Watched the S&P crash through 6550 today. How far down will it go? 6100? And where is oil headed? The oil/gas crises of the past were mostly political/market/paper trading events. The current one is destroying actual infrastructure and much of it will take months and years to repair. There goes the "over supply" happy talk. Watch for force majeure announcements from the Gulf producers. Let's see what the silliness about "boots on the ground" accomplishes this weekend. The war aims of Israel and US are divergent. Israel is perfectly content to watch the amalekites destroy each other. Trump on the other hand is anxious to bring the war to an end and to avoid a mid term debacle. But those obdurate IRGC guys are giving him the finger.
Even the solid and mighty Royal Bank has dropped from its recent high of $240 to $218 today with a huge volume of 8.6 million. Almost everything that was crashing today was doing so with unusually high volumes. I see some serious and prolonged pain ahead in our economies. If you are sitting on oodles of dry powder, cheers!
I bought some CSU and TRI recently after those stocks were beat up on AI fears before quarterly reporting settled things down.
But I am sitting on 115K waiting for not necessarily the bottom, but maybe near it.
I would not be upset if I bought in at still 10% more to drop.
Because past disruptions have seemed to show me stuff can bounce back faster than you think.
I bought SHOP about 2 years ago as they fell from grace, and was at a loss for a bit more than 15 months.
The key thing for most investors in situations like the present is to:
A: tune out the noise.
B: sit tight.
Currently not a fan of bank stocks at this time, although that much of a drop on rbc is appetizing. I thinking about grabbing some xeqt in my tfsa as it's dropping.
Back on Mar 10th I had noted that the Bab el Mandeb was thus far quiet. No longer. The Ansar Allah have rejoined the fray and missiles & drones are flying in the Red Sea and into Israel. MBS's relief valve at Yanbu is now under threat. A second choke point doesn't bode well for Trump's claims to lower the price at the pump before midterms.
What is not clear to me is what Netanyahu is plotting across the water in Somaliland. There are already several military bases in nearby Djibouti, including China's.
