They Dropped it | Peoples Trust | Discussion forum

I am not surprised that this happened. I guess they want more of their business to be fixed rate deposits even if it is for just 1 year.

They do now have the highest 1 year TFSA GIC rate but we have to watch to see if they add fees to transfer out TFSA's or another TFSA rate reduction in a year.

They know that those that need their TFSA money liquid have to put it somewhere so they decided to not cut more than 0.50% from 3.00% to 2.50%.

I think those that do not need liquidity will seek higher interest paying alternatives in coming days, weeks.

Koogie, thanks for the reference about tax efficient investing. I'm sure it will be helpful for others as well. This is true especially for younger, longer term investors.

We have reached a point in our lives that capital, principal preservation, lowering risk in our investments and maximizing longer term income is more important than saving maybe $3,000 to $3,500 a year in annual income taxes in our case.

This only works out to be about 0.35% to 0.50% a year from all our investments. It is not a big tax savings at all.

I am eligible for the disability tax credit saving us about $1,600 a year in income taxes, my C.P.P. disability is almost $15,000 a year which about $11,500 a year is not taxed because of the personal amount everyone gets Federally and $9,800 in Ontario.

This means I am only paying about $1,000 a year in annual income taxes on my first $28,500 to $29,000 a year in annual income.

About $10,000 each, $20,000 combined of our income is from interest and compound interest for this year but grows every year and is in our RRSP's and TFSA's currently attracting no income taxes, tax deferred, tax free.

The rest is about $9,000 from non-registered joint accounts from interest income paid out from GIC's, bonds like our RRSP's, TFSA's and is taxed at about $2,150 a year between us.

My wife still works but this will end soon and her income taxes will drop by at least 85% since she will getting some early C.P.P in 2015 and some RRIF income or annuity income depending on what we do with her RRSP from work so she will not pay more than $1,500 a year in income taxes.

When she turns 65 in about 3 years, she will have $7,000 more from OAS but will likely pay no more than $700 in annual income taxes because she will have the personal amount, age amount making about $18,000 a year that is not taxed.

Like I said, we have no debts and max out our TFSA's making more income tax free.

We would have to have all our investments non-registered investments in dividend paying shares, ETF's etc. because RRSP's, TFSA's would not help having them there tax wise, no dividend tax credit in registered plans, to save maybe $15,000 to $18,000 in total income taxes in 5 years.

In our official retirement of 65 years old and older, I am 56 and my spouse is around 62, we will have about a $85,000 total income and be paying at most $8,700 to $10,700 a year.

This is only about 10.23% to 12.58% of our total income gone in annual income taxes. This is modest total income taxes considering our total income.

Currently as my wife retires and she gets her early C.P.P, some other retirement income of about $16,000 a year, RRIF or annuity income maybe both, we will have about a total $60,000 retirement income in 2015.

Our total income taxes are at most $4,700 a year on all this retirement income in 2015. This leaves us with about $3,000 a month to add to $11,000 annually to ourTFSA's, compound interest growing within our RRSP's, TFSA's and adding to our non-registered investments, savings accounts, cashable GIC's etc.

We currently only need $18,500 a year to live modestly since I got rid of my car as we only have her car now, saving about $4,300 a year in car insurance, gas, repairs and maintenance, registration etc. as this was a debt free vehicle.

If we had to finance it, that would of added another $300 to $400+ a month on top of that. We really worked the numbers for months now and it will save is close to $9,300 a year. It is a no brainer.

We have $50,000 in short term savings that is used for bigger expenses, costs that will come over the years which we don't count as income and investments as we know we will use it up in the next 10 to 12 years.

We have been always prudent, cautious and planning because you never know what can happen. Just like my losing 75% of my working income due to my back injury at work.

Take care and let's hope 2015 is going to be just fine.