Once in a while, life knocks us for a loop.

Sometimes it presents itself as the abrupt end to a 15-year marriage. Or maybe it’s a child who refuses to communicate with his parents. It can even be a poor business decision that results in bankruptcy.

Sadly, countless people endure these and other life-changing experiences. While each situation is unique, the initial response from most every one often is “I didn’t see it coming.”

Let’s be honest. There probably had been indications along the way. Signals that, had they been acknowledged, might have prevented the problem from escalating. But in some cases there are no warnings, particularly, when it involves one’s health. One day we’re running 10K, the next we’re on life support.

There’s no telling when life will throw a curve ball at us, or in the case of Sandra, hit us over the head with a sledge hammer.
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How can you get the government to give more money to your favorite charity or cause?

One way may be to lobby your MP or MLA. The prospect of a positive response would be less than certain, and the effort might not be the best use of your time.

A certain way to get the federal and provincial governments to support your charity is through their support of your contribution.

How does that work?

When you make a contribution that qualifies for a tax receipt, you get a credit against your income tax liability.

For the first $250 of receiptable donations, the tax credit is based on the lowest rate of tax.  However, if your donations total over $250 during the year, the tax credit is then based on the highest tax rate, currently 43.7%.
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Effective January 1, 2010, you now have another $5000 contribution room for your TFSA.  This is in addition to any unused contribution room you may have left from the $5000 entitlement for 2009.

Also, if you withdrew money last year, you can now replace it without affecting this year’s limit.

As with RSPs, personal investments can be transferred into TFSAs to avoid tax on future income.  Don’t forget though, you might trigger tax on any capital gains earned to the date you transfer investments.

The last day for topping up your 2009 RSP contribution is coming up fast.   Amazingly, many of us do not contribute our maximum, even though it still remains one of best ways to both save for retirement and reduce taxes.

If you don’t have the cash:

• Ask us about RSP loans.  They are quick and easy, and with interest rates so low, its a great opportunity to get the tax deduction and meet your retirement goals.
• Consider making a ‘contribution in kind’.  You can transfer investments you own personally to your RSP, and get a receipt for the current market value.  But don’t forget that any capital gains to the date of transfer will be triggered.

With the Winter Olympics taking place during the last two weeks of February, don’t wait until the last minute!  Getting around town during that time will be a challenge for everyone.

Consider a regular monthly RSP contribution, instead of coming up with a large amount at once.  It’s often easier on the pocket, and it’s often a better way to invest (dollar cost averaging).

Don’t forget to use your tax refund wisely!  Repay loans or mortgages, or get a jump start on your 2010 RSP contribution to make a significant improvement to your financial needs.

ZLC clients and friends enjoyed our recent workshop where our guest speaker, Doug Towill, presented several interesting and provocative thoughts on what we can expect in retirement.  Doug shared ideas on how we can best prepare ourselves to maximize our opportunities, and enjoyment, of this important, and hopefully long stage of our lives.

Highlights from the presentation included discussion on:

• The risks we face with Longevity (will we outlive our money during our 25 to 30 years of retirement?) inflation (what will a dollar buy us in 20 or 30 years?) and Market Volatility (will a drop in the market set us back?)
• The Sandwich generation (most middle age people have more parents than children)
• Our increased awareness of the dangers of retirement and whether products exist to help protect/manage losses (tragically, far too many assets are now held in tax inefficient and low interest bearing investments)
• The concerns we face in maintaining our lifestyle in retirement (a large percentage of us are finding that our expenses are much higher than we expected)
• The events that trigger retirement readiness (financial freedom, a significant age, health, death of someone close, career setback)
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