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Year End Financial Tips

Year End Financial Tips for 2016

By Isaac Schweigert | December 15, 2016

As we head into the holidays and the home stretch of 2016, now’s the perfect time to make sure you’ve covered your financial bases for year end. Here are our top tips for getting your financial house in order before the new year.

Look at your capital losses.

If you sold investments earlier in the year at a profit and don’t have losses from previous years to offset, you should consider selling investments that have losses to reduce your tax bill. The deadline this year is December 23. If you didn’t have any gains this year, consider selling losing investments to offset gains in any of the 3 previous tax years. If you want to repurchase those investments, remember to wait 30 days, otherwise CRA will disallow the capital loss.

Make charitable donations.

If you want to claim donations on your 2016 income taxes, you need to make them by December 31. You can carry donation credits forward and use them in a future tax year, but unlike capital losses, you can’t carry them back.

Review your portfolio.

Asset allocation is important (the mix of stocks, bonds, real estate and other investments), is yours on track? If you manage your own account, now is a good time to make sure your asset allocation is on target. If you already have a ModernAdvisor account, you can just sit back and enjoy the holiday season.

Review your financial goals.

The end of the year is a good time to review how you did over the last 12 months in reaching your goal(s). If you didn’t reach your goal(s), figure out why and revise or set new goals for the next year. They don’t have to be super ambitious, start small and challenge yourself more as you build momentum.

Contribute to your RRSP.

If you haven’t been contributing to your RRSP throughout the year, consider doing it before year end rather than waiting until the March 1, 2017 deadline. To make a contribution to your RRSP, consider putting more money into this account before that date – to maximize contributions. Recall RRSP contributions will entitle you to a deduction on your 2016 tax return. It’s a nice government loan that you can grow tax-deferred.

Make TFSA withdrawals before year end.

If you know you are going to need money from your TFSA in the new year, consider taking it out before year end on December 31, rather than waiting until you need it in January or February. That way you’ll get the contribution room back on January 1, 2017 instead of January 1, 2018.

Review your will.

Life can be hectic but it’s important to ensure your will is up to date so your wishes and loved ones are protected. If you don’t have a will for your family, get one!

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Isaac Schweigert

Isaac Schweigert

Isaac is a CFA charterholder and is Portfolio Manager and Chief Compliance Officer at ModernAdvisor. He has over 11 years of investment industry experience, including asset allocation, portfolio management, due diligence, compliance and reporting.