December 2023
- Metric Financial
- Dec 15, 2023
- 2 min read
Updated: Mar 19
According to Miles Zyblock, the Chief Investment Strategic with Dynamic Funds, the worst (of the market) is behind us. With the Bank of Canada’s decision to hold interest rates steady last week it looks like they might be right. The US Fed is also likely finished hiking rates according to analysts (www.moneywatch.cbs.com) and in fact we might see interest rate cuts as early as Spring 2024. Overall, this is good news for the market, but it also means getting over 5% on a GIC will likely soon be a thing of the past.
Also, you may have heard about the new FHSA (First Home Savings Account) that was launched by the government earlier this year. It is a new program for first time home buyers (see qualifications) where you can contribute up to $8,000 annually to the FHSA, but there are a few catches. You can only accumulate FHSA room if you open an account, and you can only carry forward a maximum of $8,000.
Example: You open an FHSA before the end of 2023 but don't contribute. In 2024 you can contribute up to $16,000.
If you are planning to purchase your first home in the next few years it would make sense to
open an FHSA sooner than later.
The unique feature of the FHSA is that it combines the benefits of both an RRSP and a TFSA. Your contribution is tax-deductible like an RRSP but when you make a qualifying withdrawal it is also tax free like a TFSA.
This information has been prepared by Shannon Straathof who is an Investment Advisor for IA Private Wealth® and does not necessarily reflect the opinion of IA Private Wealth. The information contained in this newsletter comes from sources we believe reliable, but we cannot guarantee its accuracy or reliability. The opinions expressed are based on an analysis and interpretation dating from the date of publication and are subject to change without notice. Furthermore, they do not constitute an offer or solicitation to buy or sell any of the securities mentioned. The information contained herein may not apply to all types of investors. The Investment Advisor can open accounts only in the provinces in which they are registered. IA Private Wealth® is a member of the Canadian Investor Protection Fund and the Canadian Investment Regulatory Organization.
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