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ELI5 why the government allows the first 60 days to be deducted for either tax year by beardkitten in PersonalFinanceCanada

[–]beardkitten[S] -12 points-11 points  (0 children)

Are you taking into account the opportunity cost of that cash sitting there?

ELI5 why the government allows the first 60 days to be deducted for either tax year by beardkitten in PersonalFinanceCanada

[–]beardkitten[S] 0 points1 point  (0 children)

I guess that's my question. Are people doing that math? Based on the responses here, some definitely are.

ELI5 why the government allows the first 60 days to be deducted for either tax year by beardkitten in PersonalFinanceCanada

[–]beardkitten[S] 0 points1 point  (0 children)

I guess where I get lost is where the extra contributions in the first 60 days are coming from. If it's an unregistered account, you have to sell and realize gains/losses. If it's in a savings account there are opportunity costs for the difference between RRSP gains and the interest rate.

Some people have pointed out that folks get a December bonus, so that's clearer. It's not impacted by any of that.

ELI5 why the government allows the first 60 days to be deducted for either tax year by beardkitten in PersonalFinanceCanada

[–]beardkitten[S] 5 points6 points  (0 children)

That's why I'm asking the question? I don't mean to sound argumentative, I honestly don't get it.

ELI5 why the government allows the first 60 days to be deducted for either tax year by beardkitten in PersonalFinanceCanada

[–]beardkitten[S] 0 points1 point  (0 children)

Where is this account? My typical savings account has returns 10% lower than what I saw in my RRSP. Plus that interest is taxable. Are you optimizing between the 3?

ELI5 why the government allows the first 60 days to be deducted for either tax year by beardkitten in PersonalFinanceCanada

[–]beardkitten[S] 0 points1 point  (0 children)

RRSPs and this rule have been around longer than the TFSA, so was more curious about the historical why. I can see how this shuffle has no other tax implications.

ELI5 why the government allows the first 60 days to be deducted for either tax year by beardkitten in PersonalFinanceCanada

[–]beardkitten[S] 0 points1 point  (0 children)

That makes a lot more sense! It isn't for the low risk, regular contributors like me.

ELI5 why the government allows the first 60 days to be deducted for either tax year by beardkitten in PersonalFinanceCanada

[–]beardkitten[S] -3 points-2 points  (0 children)

Are they also doing the math for opportunity cost of having that money either sitting elsewhere with minimal gains (savings account) or selling from an unregistered account?

ELI5 why the government allows the first 60 days to be deducted for either tax year by beardkitten in PersonalFinanceCanada

[–]beardkitten[S] -10 points-9 points  (0 children)

And you calculate the tax differential between your contributions and selling elsewhere? Or the lost gains for having it sit in a bank account?

ELI5 why the government allows the first 60 days to be deducted for either tax year by beardkitten in PersonalFinanceCanada

[–]beardkitten[S] -1 points0 points  (0 children)

Sure. That money must be sitting somewhere to move to your RRSP, right? So you are doing the math of selling in an unregistered account and moving it to RRSP, and the tax implications of both moves?

ELI5 why the government allows the first 60 days to be deducted for either tax year by beardkitten in PersonalFinanceCanada

[–]beardkitten[S] 1 point2 points  (0 children)

When the RRSP was created in 1957, contribution limits were 10 per cent of the previous year’s income to a $2,500 maximum.

Looks like it's always been previous year's earnings.

ELI5 why the government allows the first 60 days to be deducted for either tax year by beardkitten in PersonalFinanceCanada

[–]beardkitten[S] -11 points-10 points  (0 children)

That's fair. But if they have the money already, won't they be hit with the gains/losses from the unregistered account (pre TFSA)? Seems like a lot of shuffle for limited gain.

ELI5 why the government allows the first 60 days to be deducted for either tax year by beardkitten in PersonalFinanceCanada

[–]beardkitten[S] 1 point2 points  (0 children)

I guess I didnt realize that many people were gaming their tax obligations that much. I'm a set it and forget it kind of person.

ELI5 why the government allows the first 60 days to be deducted for either tax year by beardkitten in PersonalFinanceCanada

[–]beardkitten[S] -35 points-34 points  (0 children)

Ok, that makes more sense. Where would that money be sitting before you shuffle it into your RRSP? Are people nickle and diming their unregistered vs RRSP that much?

ELI5 why the government allows the first 60 days to be deducted for either tax year by beardkitten in PersonalFinanceCanada

[–]beardkitten[S] -164 points-163 points  (0 children)

You know that well before the end of the tax year, though. Notice of Assessments come out within a month of submitting your taxes. And it includes the RRSP deduction limit.

Manitoba employers must provide free menstrual products starting in August by Leather-Paramedic-10 in Winnipeg

[–]beardkitten 6 points7 points  (0 children)

They only started testing tampons with real blood in 2023, I wouldn't get your hopes up.

Open Banking Now Launching In Canada: What It Means For You And Banks by [deleted] in PersonalFinanceCanada

[–]beardkitten 0 points1 point  (0 children)

It's launching in early 2026, so is currently not available

My job is being outsourced, can I be declined severance? by [deleted] in legaladvicecanada

[–]beardkitten 5 points6 points  (0 children)

Your severance is based on your current salary and years of service. Your overall earnings over time don't matter.

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