Done with Your Personal Taxes? Review Your Prosperity Plan Next

We are fast approaching the deadline for Individual Tax Returns, a point of great relieve to most of us. And while it is most certainly tempting to switch gears and move on to our summary mood and rituals, I find May to be the most appropriate month to reflect on our finances and act upon concrete resolutions moving forward.

No matter what the outcome of your personal tax filing is—amount owing, refund amount, or a zero sum—it should really trigger a series of questions you should get your mind occupied with. Simply put, if up until now you were busy preparing your taxes, take the month of May as an opportunity to review your taxes and personal investment plan, while you still can and still have a better chance of controlling the outcome of next year’s filing. Otherwise, you will be scrambling once again the very last minute for taxing optimization or be missing a tax saving (and investment) opportunity yet another year.

So, what are the questions you should ask yourself (either as an individual or as a household):

  • Why did I end up having to pay these extra (and most often than not unplanned) taxes?
  • How do I calculate my taxes throughout the year and eliminate tax owing altogether? (This is especially critical for the self-employed.)
  • Have I optimized my RRSP contribution fully?
  • What should I do with my ever growing RRSP contribution room? When and how should I over-contribute the yearly limit?
  • How should I allocate my refund and upcoming investments between RRSP and TFSA?
  • Am I on-track with my retirement plan? and how does my portfolio perform against the benchmark? Are my investments properly allocated?

The answers for these tough questions are never simple and vary greatly between individuals based on their level of income and their individual wealth and retirement goals. You may want to address them all sooner than later with your Accountant and Financial Advisor, or even better, take the time and do the research on your own, or both.

Whatever approach you choose, and no matter what your age is (you are a fresh graduate, or just two years before retirement) you simply owe it to your future self.

If you are feeling a bit lost with all these matters, don’t have a clear plan in place, or simply want to make sure you don’t miss anything, I highly recommend you taking the time to read or listen (Audible) to Kenneth Fisher’s Plan Your Prosperity: The Only Retirement Guide You’ll Ever Need, Starting Now—Whether You’re 22, 52 or 82. I assure you it will transform your thinking.

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