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It’s a new year—and while you’re sorting out whether or not ‘old acquaintance should be forgot’; there is a list of things you shouldn’t forget if you want to start the year on the right financial foot.

#1: Top up your Tax-Free Savings Account (TFSA)

For 2023, the annual Tax-Free Savings Account contribution limit has increased to $6,500 (from $6,000).

That means if you have been eligible to contribute to a TFSA since its inception in 2009, as of January 1st of this year, you will have a total contribution room of $88,000.

For those of you that made a withdrawal from your TFSA in 2022, you can re-contribute the amount you withdrew last year in addition to your 2023 contribution.

For example, if you withdrew $2,500 from your TFSA in 2022, you can contribute up to $9,000 to your TFSA in 2023 (i.e., $2,500 for 2022 withdrawals + $6,500 for 2023 limit = $9,000).

Confused about how much you can contribute to your TFSA?

We’re here to help. Speak to an Educators financial specialist to clarify any questions you may have about your available contribution room in order to avoid over-contributing to your TFSA.

Contact us today

#2: Maximize your RESP contributions

When it comes to the Registered Education Savings Plan (RESP), the turn of the calendar year means the benefit of cashing in on another 20% in matching government contributions in the form of the Canada Education Savings Grant (CESG).

That’s where the federal government will match your RESP contribution up to a maximum of $500 per child, per year. Naturally the earlier in the year you make that contribution, the more your child will benefit from the earning potential of compound interest.

Check out our 3-step guide to maximizing its total savings potential.

#3: Get ahead of the March 1st RRSP deadline

You can make RRSP contributions for the 2022 tax year up until March 1st. However, you may want to get those contributions in sooner rather than later—considering how hectic life as an education member can be.

Which brings us to some educator-specific RRSP advice.

While the unused RRSP contribution allowed for the 2022 tax year is $29,210, keep in mind that may not be the maximum for you. Your individual maximum contribution will also reflect any pension adjustments and carry-forward of unused deduction limits from previous years.

Looking to put the right investment strategy in place to add to your pension income in retirement?

Our financial advisors can guide you on what’s right for your educator-specific needs, such as how a gratuity might impact your retirement savings strategy.

Speak to a financial advisor today

#4: Start preparing your 2022 tax return now

We’re already halfway through the school year—before you know it, tax time will be here. Since you may have a little bit of administrative work to do when it comes to income tax filing (even before obtaining your T4 from your school board), it’s always a good idea to get organized early.

A few tax-preparing details you can start taking care of:

  • Gather receipts for eligible school supplies (in order to take advantage of the Eligible Educator School Supply Tax Credit)
  • Print off interest statements from any investments
  • Take advantage of all income-splitting/pension-sharing opportunities
  • Don’t forget to also gather receipts/information for other eligible credits such as childcare, charitable donations, and the First-Time Homebuyer’s Tax Credit (which has increased in 2022 to up to $1,500)

#5: Schedule a financial review

If you have significant capital gains in a non-registered portfolio that requires re-balancing, then early in the year may be a good time to do it (since capital gains tax is deferred for over a year). The start of a new year is always a good time to speak with your financial advisor to review whether or not you need to re-balance some of your holdings due to market fluctuations.

Of course, don’t schedule just any financial review. Schedule an educator-specific financial review.

From pay grids to pension plans, Educators Financial Group understands how your pay structure works during your working years and in retirement. This means we can provide you with the kind of financial advice that makes the most sense every step of the way—both during and after your education career.

Set up an educator-specific financial review with one of our financial advisors.

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