Dec. 9, 2021

Your Year-End Financial Tips and Reminders

Your Year-End Financial Tips and Reminders
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Season 1

Year-end is quickly approaching and you don’t want to miss out on any important money moves before the year closes out! In this episode, I provide important reminders and tips for your finances to end 2021 on a positive note and put you in a fabulous position to achieve your money goals in the new year.  

About the Host:

I am a financial professional, who specializes in helping people to achieve their financial goals.  My absolute passion is creating new possibilities in people’s lives by showing them the ropes when it comes to money. I’m here to spark healthy and positive conversations around wealth and investment and create a world where nobody is limited by their financial situation. I believe this begins with education and shifting our relationships with money. I love getting to witness people achieving their most ambitious goals and creating new possibilities for themselves and their families! 

I love your questions! Reach out to me anytime at:  

https://www.raymondjames.ca/kaleeboisvert/

Email: kalee.boisvert@raymondjames.ca

Instagram: https://www.instagram.com/kaleeboisvert/

Twitter: https://twitter.com/wealthandwelln2

https://www.facebook.com/kaleeboisvertwealthandwellness/

 

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Transcript
Kalee Boisvert:

Welcome to the wealth and wellness podcast with

Kalee Boisvert:

me Kaylie Bob air, I specialize in helping people to achieve

Kalee Boisvert:

their financial goals. I have a love for all things numbers, and

Kalee Boisvert:

I'm passionate about financial literacy. My goal is to spark

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healthy and positive conversations around wealth and

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investment, and create a world where nobody is limited by their

Kalee Boisvert:

financial situation. But wealth is just one piece of the

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equation of living our best lives. So join me as we explore

Kalee Boisvert:

both wealth and wellness topics. From your net worth to your self

Kalee Boisvert:

worth, get ready to take confident action.

Kalee Boisvert:

Hello, this is Kaylee. And thank you so much for tuning into this

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episode of the wealth and wellness Podcast. Today, I

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wanted to do a quick chat now that we're quickly approaching

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the end of the year. And I wanted to share a few money

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reminders and tips for year end. That way, it feels like you're

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ready to close off 2021 On a good note, and have a good start

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for 2022 when it comes to your money. So, of course, it's been

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an interesting few years for all of us navigating the pandemic.

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And I think just to start off, though, I want to say it's

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important to give yourself grace, because I think in this

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time, that's of course, very unprecedented. And, you know,

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everyone was impacted in different ways. And that very

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much could have overlapped with your money and finances, when it

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came to how people's jobs were impacted, and their income as a

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result, and then savings rates and things like that. So it's

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been a very interesting few years to say the least. And I

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think just to start off, I, you know, I think we all need to

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give ourselves a pat on the back for dealing with all this and

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you know, getting through a lot of this unplanned scenarios that

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have maybe thrown some of your financial plans and, and money

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goals for a bit of a loop. But again, hopefully, this is a good

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sort of tips and reminders for you. So you feel like you're,

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you know, ready to go. You're doing what you can as far as

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what you can control with your money. So let's talk about money

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tips for the year. And I'll give you a bit of a disclaimer. Just

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to start off, this is going to be more of a Canada focused

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topic. And some of the tips are going to be very much Canadian

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focused on types of accounts and things like that, just because I

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reside in Canada. And so I work with a lot of people in Canada

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as a result. So I wanted to get really specific for what some of

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these deadlines and things like that are. Okay. So to start off,

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let's first talk about TFSA as tax free savings accounts. So

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those are a you know, very important piece of people's

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wealth building goals and an account that most Canadians that

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are able to have these accounts generally are utilizing their

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tax free savings accounts or so I wanted to talk about those. A

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good reminder for year end for Tax Free Savings accounts is

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just if you are planning on withdrawing from your Tax Free

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Savings Account, consider doing so prior to year end. Because

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you any amounts you withdraw before the year end, you

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actually get that contribution room back as of the next year.

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So if you do it in January, let's say you're been

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considering it, there's something coming up that you

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need to pay for. And you've been considering taking money on the

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TFSA to cover it. Well, good idea might be to take it now

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that we're in December nearing year end, rather than taking it

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in January. Because let's say for instance, you took out

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$10,000 This December from your Tax Free Savings Account. Well

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come January 1 2022, you get the additional 6000 room that

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everyone's been given for 2022. And again, this is if you're 18

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years or above, that's a little reminder as well for TFSA is so

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again, so come January 1 2022, everyone gets that additional

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6000 room. But because you took out 10,000 From yours in 2021 as

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of January 1 2022, you actually get that $10,000 room back so

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your contribution room in that scenario, as of January 1 2022

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would actually be $16,000. So again, it's just gives you a

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little bit more flexibility in being able to replenish your

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TFSA account. If you were to make the withdrawal in January

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for instance. So let's say instead you held off, you pulled

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out that $10,000 In January while you have To wait until the

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following calendar year before you get that room back. So

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again, December is just a nice sort of year and Mark, because

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you get that room back really quick, come January, you already

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have the room given back to you to be able to replenish that if

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that's the plan. So again, just for flexibility purposes, might

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be wanting to consider it now rather than later. Because like

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I said, if you do withdraw in January, for instance, you will

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not get that room back. So let's say you make the withdrawal of

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$10,000, from your TFSA in January, you will not get that

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room back until January of 2023. So you have to wait the full

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year. So a lot less waiting if you're wanting to do it before

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year end. So again, just something to consider for your

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TFSA accounts for year end, reminders and things like that.

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So now let's chat about another important account RRSPs are

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Registered Retirement Savings Plans, and making contributions

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to those. So the great thing about RRSPs is if you are

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planning on making a contribution to your RSP, which

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you would want, which you'd like to claim on your 2021 tax, you

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can actually do so by the end of this year. But you also have the

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first 60 days of the following year. So the first 60 days of

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2022, as well. So you do have flexibility, and it's not as

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urgent to get this done by year end. But you might want to start

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giving some thought about okay, how much do I want to make sure

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I'm making for my Rs contra RSP contribution, have I put aside

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that much savings, you know, where's that money coming from?

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If I do want to do it in the first 60 days. So again, you

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know, those that start of a new year, things move fast. So it's

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a good time to give some consideration at least to if

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you're making that contribution. Again, the deadline at the end

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of the year is not as it's not really the deadline deadline,

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because you do have the first 60 days of 2022. So not a year end

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deadline on that, but one you might want to start giving to

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some consideration to so you're not left scrambling at the very

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last day to make those contributions.

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Okay, so another topic that relates to investment accounts

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are ESPs. So Registered Education Savings Plans, these

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accounts are a fabulous way to save for your children's post

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secondary education, your contributions put into an RRSP

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account, they grow tax sheltered while they're in the account,

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and the government matches your contributions at 20%. up to 500

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per year, or they allow up to a one year of catch up. So that

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would mean technically up to 1000 per year if you're catching

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up on a previous year that you have not received the grant for

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so the year end is an important time to consider for this, if

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you are looking to max out your government grant contributions

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per child. That means that if you make a contribution of 2500,

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in the year 2021. So before the end of the year, the government

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will match you at the $500 they'll put it and so that's

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20%. Again, deadline being important because you can only

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catch up on one year of grant per year. So if you keep pushing

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this off, you start to lose that ability to catch up on yours

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because each year, you're only given the ability to go back and

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catch up on one year. Okay, so that's all I had to say I think

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for account specific. Now let's talk about tax loss selling. So

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this is only going to be applicable on taxable accounts.

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So retirement savings accounts, tax free accounts, this is not

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applicable for at all. So this what I'm going to talk about now

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with tax loss selling or capital gains. Again, it's only

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applicable on non registered account investment accounts. So

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we have a few different names they go by so non registered

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investment account, those are kind of the most common. So

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that's what the this would be applicable for. And first off,

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just to disclaimer, I'm not here to give tax advice. So you do

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want to check with your accountant when it comes to

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consulting on your tax position. And if it makes sense for you to

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crystallize any losses or gains. Just scenario for an instance of

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how this would work is maybe for instance, your income this year

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is lower, maybe it was impacted by the pandemic or something

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like this. And for this year, your income is lower. So you

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might want to see, you know, being that is lower this year

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and you think it's going to be higher in future years. You

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might want to sell some your positions in your account again

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in that non registered account that have increased in value,

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because those will trigger a capital gain. So let's say you

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bought a stock at $5. It went up to $10 over the time you've held

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it. So once you go to sell it there's that $5 gain on each

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share that you will have purchased of that stock. So you

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will be subject to tax, and you're taxed at 50% of your

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capital gains. So again, if you're in a year where your

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incomes a little bit lower, you might say, Hey, I better take

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those gains. Now, because I do foresee my income getting higher

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in later years. Again, something you might want to consult with

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your accountant for. So this is not giving advice, specifically

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because it is very dependent on each person, and your tax

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bracket and things like that. Or another reason to consider is

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tax losses. So let's say you've already made some sales in your

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accounts. Throughout the years, you've sold some stocks, maybe

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you've had some positions that have gone up in value, it's been

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a good couple years, since the dip in the markets from the

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pandemic markets have come up quite a bit since then. So maybe

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you've made some cells in your non registered account, and

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you've triggered some capital gains, or, and so you already

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have these gains for the year and you go Yeah, you know, I

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want to see if I can offset those at all, to kind of bring

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down that tax implication, well, you can look at your account and

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see if there's any positions that are at a loss position. So

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let's say you bought a stock at $20. And now it's trading at

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$15. So you might want to also consider selling it at a loss.

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And that way you can use your loss against any capital gains.

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And the great thing about losses too, is you can actually carry

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those forward to future years as well, if you don't have a use

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for them this year, so might be something to consider to

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triggering some of those losses in your account. If you want to

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just sell those positions, realize the losses. The last day

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for tax loss selling stocks is December 29. Because there's a

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two day settlement from when you sell a stock. So that means they

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will settle prior to the year end. If you sell them after that

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date, they settle in January. So it technically is not in 2021,

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it would be for the 2022 tax year. So make sure you do this

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prior to that December 29 deadline.

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And that ensures that it can be used on your 2021 taxes. And

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keep in mind as well, if you are looking to buy back in either

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position. So let's say maybe you sold something at a loss to

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recognize the gain. But you still like that stock and you

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want to have it in your portfolio. Well, you have to

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wait at least 30 days before repurchasing it otherwise, you

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could it would be considered having done like a superficial

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loss, they call it and essentially, that original loss

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you took no longer applies because you bought the position

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right back and you bought it back within the 30 days. So do

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wait the 30 day time period, before buying that exact

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position back. If it's a completely different stock, this

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is not applicable. Again, it's if you're buying the same

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position pack, you have to wait 30 days to make sure that you

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can still utilize that loss for tax purposes. And yeah, just

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keep in mind that December is the month where people like to

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do these tax losses and things like that for tax purposes, even

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institutional investors for things like mutual funds and

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pension funds and things like that. So it's kind of just

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something to keep in mind with the maybe volatility and what

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goes on in December again, you know, not saying for sure how

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that's going to impact the markets. But that could be one

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of the factors that are impacting markets in December.

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So just keep that in mind. Another diligent strategy for

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year end is to check in with your financial goals. So I like

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using the year end is just that, you know, that reminder that

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point to just reflect review. And if you work, so if you're

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doing this independently, you know, maybe it's taking some

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time sitting down, reviewing your goals, checking to see you

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know, if you're still on track, has anything changed, Is there

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things you want to update as far as what you're looking to

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achieve? Maybe you've added some goals for the coming year, like

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a big trip that you've been wanting to do for a while and

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putting off and that you're optimistic that might be able to

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happen in the next any year or so. So things like that, make

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sure you do take some time, reflect review. If you work with

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a financial professional, it's a great opportunity end of the

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year to just reach out and book review for year end or for early

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January to just discuss again, your goals. If anything's

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changed. It's just Yeah, year end is a nice sort of reminder

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or point to just be be looking in on these things again, in

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reviewing and reflecting on where things are at and where

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you want to go. What else year end is also a great time to

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check in with other important documentation. So documentation

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such as your estate plan so your will your power of attorney or

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personal directive documentation such as insurance policies,

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beneficiaries on your accounts. So If any live changes have

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occurred that require an update, so maybe birth of another child,

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someone passing away a divorce, any major life event, or maybe

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it's just you haven't checked on these in a long time, take that

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time to just check in, make sure that they are reflective of your

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current plan. And if not, make sure you make those updates. So

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if it's an estate plan, you know, maybe it is checking in

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with your lawyer to have that updated your will or power of

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attorney or personal directive, if something has changed. It is

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really important to keep these documents current and with your,

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you know, with whatever directives and intentions you

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have. So make sure that you are checking in on those important

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documents. And again, this might just be the time to remind

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yourself of okay, yes, I need to get that done. Another way to

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get organized year end, if you have any downtime, so maybe over

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the holidays, you have some time of work, and it's your only sort

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of downtime that you're foreseeing the next little bit

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well, also a great time to get ready for tax season. So instead

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of rushing to get this all done at the bitter end, before the

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filing deadline, which can be stressful and chaotic, and leave

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you scrambling for trying to find all these slips and things

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like that, well maybe just start you know, gathering your

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receipts right now for your tax taxes coming up. So for 2021. So

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gathering receipts, making a list of any items that you would

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be expecting for as far as like slips that you're going to be

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expecting to hand into your accounting, if you work with a

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financial or accounting professional, or if you do it

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yourself, maybe making a list of you know, what are the items

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that you're going to need. And sort of then you can check them

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off as they come in early in the new year. So it's a great time

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to kind of be proactive on that. Why not again, if you have the

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time if you have a little bit of downtime, great idea to do that.

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Also, don't let those benefits go to waste. The deadline for

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most workplace health benefits is usually the year end so the

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December 31 year end for most plans. So you know those, the

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savings accounts and things like that, that you can utilize on

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different surfaces like massages and acupuncture, naturopath in,

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you know Dental, things like that. Maybe you know that now's

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the time, hopefully, maybe you have some time over the

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holidays, or if you have some off days where you can schedule

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those appointments. And you know, with all the running

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around we do during the holidays, perhaps a year end

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massage is in order. So make sure you get that done so you

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can fully utilize your benefits. What else also keep in mind

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deadline for charitable donations for 2020 tax year is

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of course December 31 2021 There are so many wonderful causes out

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there. And many that really rely on our support especially over

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the holiday season. So consider giving to support some of your

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favorite causes. And don't forget to get that charitable

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receipt because that's going to really help you out come tax

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time. And then I can't talk about year end tax or planning

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sorry planning in general without addressing the dreaded b

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word. So yes, I am talking budgeting December is probably

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the most important month I would say that we need to be giving

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time and consideration to budgeting and spending. So if

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you're not a huge fan of tracking expenses throughout the

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year, I get it I'm right there with you. I'm not a big fan. But

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you know being diligent about tracking finances over the

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holidays is really going to help spare you from that shock of you

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know credit card bills come January so spend some time

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really deciding you know, what is your budget what is the

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budget that you want to be spending on your kids for

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presence and you know, other people that you're getting gifts

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for for events, things like that again the holidays you know we

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have to remember what it's what it's all about and it's about

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just you know being around loved one loved ones and you know

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being just grateful for things like that for for time with the

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people we love and so you know the the pressure of shopping and

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buying and getting things is is strong like it's everywhere,

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it's all around us it's online shopping and ads we get and

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things like that and and of course if we go to the malls and

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things like that, but yeah, take some time and do your budgeting

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first and and you know put some thought into how much you

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actually want to spend in those different categories and that

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way you're in control right you're it's not like your money

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is just sort of going right out the door and and there's nothing

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left after December. But you're you're being diligent about

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saying hey, this is what's feasible for me in my budget or

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in my you know, with income and things like that right now. No

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and, and so that's what you're sticking to. So it's a great

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time of any months, December's probably the most important to

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really spend some time and get diligent on what your intentions

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are about spending and cash flow. So that's it. Hopefully

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those were helpful reminders for you. And my goal was not to

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overwhelm so hopefully I have not overwhelmed but have you

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feeling ready to end your 2021 on a good note with your

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finances and be ready, so you're off, you know, for a great start

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for 2022 as well. So thank you so much for tuning into this

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episode, and I will catch you on next week's episode. All right,

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bye.

Kalee Boisvert:

I hope you found value in this episode. And because I'm such a

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proponent of taking confident action, I want to pose a

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question to you the listener. What is one action that you feel

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inspired to take after listening to today's episode? If you enjoy

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listening, please subscribe and share with your friends and

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family. Thank you so much and I will catch you next time.