Brent and Darlene really enjoy their ’toys’ and their lifestyle. In the last few years, they bought themselves a big screen TV, a stereo system, two expensive new vehicles, a ski boat and took a tropical vacation, mostly on credit. They also used their credit cards to pay for numerous restaurant meals, theatre tickets, hockey games and other expensive outside entertainment.

It wasn’t long before they were carrying a balance from month to month. The credit charges and payments quickly became a burden.

They received their quarterly RRSP statements and were pleased to see that...

Alicia was about to sign the papers on her new vehicle when she noticed an additional charge of a little over $3,400 for insurance on the Bill of Sale. When she asked the finance manager what it was for, he said, ’Well, that’s for the life and disability insurance for your car loan.’ She was left with the impression that the insurance was mandatory. Alicia didn’t sign the papers and said she would finish them up the next day. She asked for a copy of the coverage wording to help with her decision.

She learned that the insurance would only make her monthly payments if Alicia died or couldn’t work during the loan repayment period. The premium would be a one-time charge added to the financing contract, so she would also have to pay interest on the premium for the..

It is required by the Income Tax Act that a Registered Retirement Savings Plan (RRSP) must be closed by the end of the year in which the planholder (annuitant) reaches age 71. At that time, the annuitant must decide what to do with their retirement savings. They have three options - cash in the RRSP, buy an annuity, or convert to a Registered Retirement Income Fund (RRIF).

While an RRSP is intended to accept deposits, a RRIF is intended to provide the annuitant with a regular, systematic income. The income received from a RRIF is fully taxable. Like an RRSP, the growth is still tax-deferred.

A RRIF can actually be started at any age, but new contributions...