@MustacheAndaHalf Canada forum move please.
I'd forgotten that there was a Canada forum specifically, now I have to admit I feel a little bad at not noticing and moving it there.
Thanks for correcting my mistake.
1. You can absolutely open a new TFSA account and Transfer funds directly by filling in forms from the new account to request they pull the funds from your TD account. Do not withdraw the funds - transfer them. You'll never see the funds in hand as they move directly from TFSA company 1 to TFSA company 2. Your limit stays the same, as long as you don't withdraw.
https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/rc4466/tax-free-savings-account-tfsa-guide-individuals.html#P44_1124
I'd read that priorly yea, I just wasn't sure what the minimum amount you had to put in to open a new TFSA Account.
I actually had some incorrect speculation that got corrected on another thread, full rant/thoughts in spoiler, but I thought it was Market Share, rather than amount contributed to TFSA.
Double checking my Contribution limit in TFSA I've only deposited 37,097.08, which still leaves over 24K to be added, so the next 20K will also be in my TFSA.
I do still plan on withdrawing the $1,597.08 I deposited in 2014 into the high interest account I believe which was my very first investment even before MMM I believe, won't update until 2023 but getting it into my Account will be a decent first step especially since I still plan on dumping 20K away.
Old Incorrect speculation if you want to see how a wrong assumption can derail you utterly.
Checking my Investments, their Market Value has just cleared the TFSA Limit due to their rapid growth.
So adding even more to one and then switching could be a problem, especially since your book value is usually lost when merging/making new accounts.
Think it's just by a bit by checking the Online Calculator, but I should check more precisely as well.
My E-Series is currently $61,359.36
Also, have a small amount of money in a TFSA High-Interest Savings account that I must have set up a while back for an emergency draw that's $1,187.04
Checking the history of the last 18 months, I set it up before that which shouldn't surprise me, it was likely something I did before my Accounting Related Job.
If I am nearing my limit, it's certainly the first part I'll take out especially since it likely only grew a $1 or so.
I turned 18 in the year 2013, but on the CRA website, it specifically mentions that the year you turn 18 is not pro-rated?
I'll assume that means that 2013 will not count, and it's only the following years.
Also, I have to admit to being surprised at using forum software this old, I wasn't expecting not to be able to add a Hyperlink to the text itself, although I decided to keep the links showing what I used anyways.
https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/tax-free-savings-account/contributions.htmlIn total, I should have X Contribution room of only 50,000!
Yikes, that's way lower than it should be, guess this is what I get for using an online service and plugging in my Birthday rather than actually double-checking the CRA official site and doing the math myself.
Although it's not quite as bad, as assuming 2013 is allowed to count, and that 2022 is added as well the limit rises to 61,500 which are the rules I assume the calculator used.
Should likely call up the CRA, double-check with them, and go to the bank and take that money out of the High-Interest Account at least.
I guess this is kind of what I get when I put my Investments in and just forget about them, for years in a TFSA Account.
Although if you go by Book Value, I'm still technically under even after moving my Investments to those particular Investments in 2019.
The math behind the 50K
2014 - 5,500
2015 - 10,000
2016 - 2018 - 16,500 (5,500 each year)
2019 - 2021 - 18,000 (6,000 each year)
Total 50,000K
2. Assuming you have a few years of income under your belt, you also have 18% of each year's reported income as an RSP limit that compliments your TFSA limit. Assuming you don't already have a pension or maxed out RSP at work, you can open your own RSP, for more long term savings that you won't pay tax on until you take money out as income a long time from now. This will also give you a tax refund you can plop right back into savings.
I do have a few years of Income, but it's not really as much as you'd think.
The 18% counts toward Self-Employed Income Reported Correct?
I should go through my Old Tax Records and double-check each year's Reported Income at some point and record it down just so I have it on record.
That being said I actually haven't had a job since March 2020, so an RSP now wouldn't be great, as you want to use that when your income is at its highest, as its main effect is lowering the amount of tax paid by assuming that you'll move into a lower tax bracket when you take out the money if I'm recalling all the details correctly.
The best thing to do with my RSP is to allow it to continue to accumulate, so that when I have a higher paying job I can afford to put more in, assuming I'm aiming for maximum tax refunds.
Hmm, double-checking now, it specifically mentions any income isn't taxed as long as it stays inside the plan, so even at lower incomes there's something to be said about just being allowed to allow my Stocks to grow without taxes until I withdraw them.
Still, I am already in the lowest tax Bracket so I lean towards, not bothering with it just yet.
Your opinion on the matter?
3. TD E-series are already one of the best options out there if you are making regular, automated contributions. Sounds to me like you are ready for ETFs, and I'm impressed you haven't been sucked into meme stonks, crypto or NFTs. Keep following one of the CCP model portfolios and you'll be set for life, even when Elon's rockets crash.
All thanks to finding MMM around 20, I'm really happy I found him so early as he really helped change my University Carrier, as rather than always busing there, I swapped to biking and was healthier and happier doing so.
Honestly as stupid as it was, one of my most cherished memories is still Biking through a Blizzard heading home.
I was extremely bundled up so I wasn't cold, but the Blizzard was bad enough that I was the only soul on the sidewalk, and even cars were fairly rare for me to hear due to the noise of the Blizzard.
Took more than twice as long, especially since I couldn't see at all, my cheap goggles I grabbed were just not up to the task. Either I kept my facemask on in which case the goggles instantly fogged up so bad I couldn't even see anything, could take the facemask off which I never considered.
Finally, there was the option of removing the goggles, but the snow was coming down fast and heavy enough that without goggles I'd get belted hard in the eyes, and would have to squint carefully to see anything.
Really lucky there was no one else on the sidewalk for the entire 11KM trip.
Overall I wouldn't repeat the action, as really I was lucky I never crashed into anybody, but man was it a memory I'll remember for the rest of my life.
I was already relatively frugal beforehand, but he really helped me cut out almost all fast food expenses out of my life as well as just how important using all my part-time income was to doing things like getting rid of my student debt.
https://canadiancouchpotato.com/model-portfolios/
I haven't looked through this site before, I'll have to take the time to go through it carefully, thank you for providing a link and mentioning it.
4. My biggest advice would be to diversify both US and globally. See the link in point 3. First of all, TDB 902, it's following the S&P 500, only 500 of the 4139 stock which VTI holds. You only have the biggest 500 US companies. When US large companies zig, Canada zags with it, but Europe zings and China skyrockets (purely hypothetical performance examples). Check out Callans Periodic Table 2021 is a free download. This also reports performance in $USD, not $CAD, so the exchange rate also adds a factor (plus or minus) when you don't own $CAD companies off the Toronto TSX.
https://www.callan.com/periodic-table/
This makes complete sense to me yea, it's why I was considering diversifying with my 20K myself.
That said when I do transfer my 60K from TDB 902 to VTI in Vanguard it'll be a bit better off, thankfully with the E-Series being fairly decent, I'm not in a rush, so filling out the forms for a direct transfer shouldn't be to hard.
5. Point 4 can easily be achieved with your next 20K if you have RSP room. Figure out your desired asset allocation (you are 100% US now, I'd suggest VGRO or VEQT to get global and bond diversification) Open up an RSP with a low cost/no cost brokerage, buy one ETF with the 20K, see how easy it is, then set up your new TFSA and transfer the 60K into the same ETF. Done.
https://canadiancouchpotato.com/2020/01/28/how-to-set-up-a-hands-off-etf-portfolio/
https://cdn.canadiancouchpotato.com/wp-content/uploads/2021/02/CCP-Model-Portfolios-ETFs-Vanguard-Dec2020.pdf
Thanks for the advice, I've definitely decided to go with Vanguard and will read all the links you provided.
My only real question is do you think investing in the RSP when I currently don't have a job for the tax savings would still be wise?
I hope to get one back relatively soon and have started applying again recently.
Honestly, Covid was good for me for the most part because it forced me to take a break.
Before Covid, during the 6 years from 18-24, I was near constantly doing something. I continued taking classes in the summer and balanced it with a part-time Security Job, with the closest to a full break I got being working full-time security for 8 months while looking for a paid internship before doing an unpaid one to graduate.
After that, I found an Accounting job I worked for minimum wage for a year roughly, and then Covid hit.
Didn't do much but apply for jobs at first, but before long I started relaxing more, I took the time to finally move out from my Father's place, and find my own living arrangements, and really got to learn just how much I needed to spend to be pretty happy.
For all of 2021, I spent roughly only 11K, and that's without me going into emergency debt mode or anything, after all, I had plenty of time during 2021 to explore what I enjoy as it was no longer new as I got laid off on Mar 2020.
I still allowed myself expensive shredded cheese and ground beef as my primary meat and even bought a Quest 2 so I could try out VR Exercise which I find helps motivate me.
This year the cost might be slightly higher as I did spend 2K on a new computer, as my current 7-year-old computer still works well, but struggles with some high-level games, emulation, and video editing.
Hopefully, this new one lasts a minimum of 5 years as well, in which case it's still consuming most of my currently allocated entertainment budget for the next 5 years at $400 each year, but that works out well.
Plus I'm planning on selling my current one for around $400 and I got it for roughly $1,100 due to Black Friday sales on parts, so a $700 loss over 7 years was very little for my old computer which was by far my most treasured physical possession.
6. Last point - Keep an Emergency Fund in cash, boring old savings account! 3-6 months of expenses. This might be your 20k, it might be a fraction of it. In our case, we kept a 4K float for the longest time, but had two jobs and credit cards/line as a horrible back up option. We ran each month of income vs expenses to the tightest hair of running out of cash in chequing until we were 35 and finally mortgage free at 42! Not a great situation.
My Risk Tolerance must be ridiculously low by this logic honestly, even if part of it is laziness.
Currently have roughly 45K in the Bank, in the form of easy to use Cash in my normal Checking's and Savings Account, if I drop off 20K into investments, I'll still have 25K available in case of emergency.
This gives me just over
2 years of living expenses saved up, as two years of my 2021 livings expenses would be 22K only.
That of course is assuming that I don't get any additional money at all when due to the current lockdown making it harder to find a job, the Government is currently giving out more money again, and I've also just started applying to jobs again.
Currently primarily aiming at Accounting Job's that pay roughly $20 an hour or so, taking into account my year of experience, although I'm also considering if I want to try different jobs as well to expose me to new interesting fields.
There are some online teaching courses that don't take long and are cheap to do if I want to try teaching English. Already have several potential countries I could teach lined up from some preliminary research even if China the biggest went down.
I could also continue my education in Accounting by working on getting my CPA, from what I briefly checked a while back, I'd likely have to retake a few of my University courses due to having a few grades, not at the B minimum for select courses, but starting the process could help me quite a bit if I intend to stay permanently in the accounting field.
All in all, I have mixed feelings about going back to work. With all my savings and Investing put together I'm currently just past the 100K mark, which is roughly a third of the way to 275K and 25 times living expenses.
A pretty good achievement for someone my age, but my expenses could also easily go up in the future, but honestly, with how happy I've been not working I think I'd much rather continue to keep my expenses far lower than work for several more years.
That said I'm not blind to the fact that while my own savings and investments have continued to rise steadily despite Covid, that's mostly because the Government has been sending money to people who lost their jobs due to Covid.
Plus after an almost 2-year break, the idea of getting a new challenge feels refreshing in some ways rather than daunting or painful anymore.
Leaning currently to a mix of options, continue to be selective on applying to Accounting related jobs that are around $20 and relatively close by or offer electronic work, and in the meantime start the process of learning how to become an English Teacher which just sounds fun as a different type of experience.
