February is Here!! Last chance for income tax savings for 2023!!!

As many of you know, February is the last month to work on getting those income tax deductions for the last year!

Many people have developed annual financial patterns that are lowering their income tax on a regular basis, while saving on building up retirement assets. 

My recommendations;

1) If cashflow is fairly consistent through out your calendar year, I would recommend finding a way to contribute monthly to RSP Accounts for your financial future;

2) If your cashflow is rather lumpy at times or it is not always clear how much income you might earn in a given year, usually lump sums can add flexibility, or allow top ups to a base savings.

3) How much savings is recommended of one's net income for retirement? The rule of thumb these days, is about 10% of Net Income. 

$1,000,000 Savings paying 5%, is $50k per year without erosion

$500,000 Savings paying 5% is $25k per year without erosion

$250,000 Savings paying 5% is $12,500 per year without erosion

Also don't forget that you can borrow funds out of your RSP to use towards your home purchase down payment (first time buyers). If for whatever reason you have been unable to set funds aside, then consider using an RSP loan.