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Healthy finances for 2024
As Canadians across the country rang in a new year this past week, many had their minds on improving their finances in 2024.
Ipsos polling conducted exclusively for Global News shows that 90 per cent of those surveyed said they wanted to make changes to their lifestyles in response to the higher cost of living as inflation and higher interest rates linger.
Among the top strategies for saving in 2024 were moving somewhere cheaper, postponing or cancelling vacations and putting more money away.
To get on top of your expenses for 2024, start early and small, said personal finance expert Rubina Ahmed-Haq.
“Money is always a big new year’s resolution,” she said. “So if you are making money a priority this year, don’t make it overwhelming.”
You can read more finance tips for getting your year off to a good start here. And for a list of the tax changes that will affect your pocketbook in 2024, read more here.
Some Rogers customers face price hikes
Rogers and Fido customers who are not currently under contract with their telecom provider might soon be paying more for the mobile services.
The average price update for other wireless customers will be $5 per month, a Rogers Communications spokesperson told Global News. Customers who have been notified of an increase will see the new price on their first bill after Jan. 17.
The hikes come less than a year after Rogers closed its merger with Shaw Communications, a move approved by the federal government in hopes that increased competition from Quebecor’s Videotron after absorbing Freedom Mobile in the deal would lower wireless prices in Canada.
Though the prices Canadians have paid for mobile services have decreased year-to-year, Industry Minister Francois-Philippe Champagne said in a statement to Global News that Rogers’ price increases “go against the direction we set at a time when Canadians are struggling to make ends meet.”
Here’s what else you should know about telecom pricing in Canada.
What a rate cut forecast means for housing
With inflation cooling and the economy slowing heading into the end of 2023, many economists were filling their forecasts with timelines for interest rate cuts from the Bank of Canada.
After nearly two years of a housing correction driven by rate hikes from the central bank, some market watchers have started to predict a bottom for prices and sales activity sometime in 2024, with eventual rate cuts playing a big role in a potential rebound.
RBC assistant chief economist Robert Hogue told Global News that he expects activity to pick up ahead of the traditionally busier spring market, but high borrowing costs will continue to subdue homebuying in the first half of 2024.
A decline in fixed mortgage rates tied to softening bond yields might incentivize some buyers to jump into the spring market, he says, namely investors who are looking to time the price trough.
Read more about what you should expect in the 2024 housing market, whether you’re looking to buy or sell.
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– THE QUESTION –
“I am required to convert my RRSP account into RRIF at the end of 2023. I’ll also be required to meet the minimum withdrawal requirement starting in 2024.
I am considering using all the RRIF money (after fulfilling the minimum withdrawal requirement for 2024) to buy life annuities at the end of 2024. I understand that the annuity payments will be subject to income tax. I wonder if I’d be at risk of having to pay personal tax on the total amount of money transferred from my RRIF account to pay for life annuities?”
— A Money123 reader
“You are not alone amongst new RRIF holders when it comes to questioning options for investing and creating cash flow from this new account. Essentially, though, the investment options are the same as they were when it was an RRSP.
Good for you to have grasped the essential rule of a RRIF – that you are forced to take a legislated minimum income each year. And I think you know that you can take any amount you want above that minimum as well. The only real consideration is how much income tax you want to pay.
If you decide that a life annuity would provide the most comfortable investment in terms of yield and cash flow, the RRIF money can be used for the purchase, and it will be a tax-sheltered transfer of funds. There is no immediate tax consequence. You will pay tax on the annual income from the annuity. And this could be above the legislated minimum.
Your lifestyle spending need should be the driving force behind deciding how much to take out of the account annually. If the RRIF is your only source of cash flow, then you have to determine whether the annuity payments will meet your requirements over your expected lifetime.
I regard the life annuity option as something that assures a base level of predictable income. There is still a need for inflation protection, so I would not use the entire account for this purpose. Having this assured ‘fixed income’ stream would argue that a larger portion of the rest of your RRIF might be invested somewhat more aggressively — growth-oriented stocks for example — as an inflation hedge.”
– Lenore Davis, certified financial planner
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