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Your Financial 2013 New Year’s Resolutions

By Robert Mulrooney

Now that the fiscal cliff is behind us, many New Year’s resolutions this year involve money management. If getting your financial house in order is on your to-do list for 2013, here are five resolutions you should take to heart:

1. I will take full advantage of my TFSA.  I strongly believe that TFSAs (tax-free savings accounts) are going to save a great many Canadians come retirement. Unlike RRSPs, which are taxable when cashed in, money in a TFSA grows and can be withdrawn tax-free.  TFSAs are especially beneficial to self-employed workers in lower tax brackets; many people will find their financial “sweet spot” in a combination of TFSA and RRSPs.  As of January 2013, every Canadian is allowed to have up to $25,500 in a TFSA – set up yours by talking with your advisor.

2. I will maximize my RRSP contributions.  Maximizing RRSP contributions makes sense for a lot of people, especially those in higher tax brackets. Not only do RRSPs offer immediate tax savings, but every contribution you make adds to your own personal pension. This is increasingly important since fewer and fewer people have pension plans. Your contribution limit is 18 per cent of your previous year’s income, to a maximum of $22,970 (to find out your exact limit, see your 2011 Notice of Assessment or call Canada Revenue Agency at 1.800.267.6999.) The deadline for contributing to your 2012 RRSP is March 1.

3. I will educate myself. Do one thing to improve your investment knowledge this year.  We believe educated investors make better decisions over time, and attending an investment seminar or taking an investment course is a great option. For starters, DundeeWealth is hosting a “2013 Look Ahead” educational seminar on Feb. 2 at Crown Isle from 9:30 am to 1 pm. RSVP by January 26 to

4. I’m not going to stress over the stock market.  If the markets have been stressing you out, you’re paying too much attention to them; the moment you let your emotions colour your investment choices, you’re already behind the eight ball. Though the markets may dip, dive, shimmy and shake, the long-term trend is growth.  If the stock market is keeping you up at night then it might be time to make some changes – otherwise, forget it.

5. I’m going to get professional advice. Investors that consult a financial advisor are statistically more likely to outperform those that go it alone. Give yourself the best chance of long-term financial success by setting up an appointment with a professional investment advisor today.

This article was originally published in the January 2013 edition of the Comox Valley Business Gazette.