How to beat overspending Final Edition

• Published in: Calgary herald
• Main Author: Hodgins, Doug
• Format: Newspaper Article
• Language: English
• Published: Calgary, Alta Postmedia Network Inc 26.12.1999
• ISSN: 0828-1815

Do you have a financial planning question that needs an answer? Mail it to Ask A Planner, c/o the Business Department, the Calgary Herald, PO Box 2400, Station M, Calgary T2P OW8. Or fax it to us at 235-7358. Your question will be reviewed by a practising member of the Alberta South chapter of the Canadian Association of Financial Planners and may be published in the Sunday Money section. Ask a Planner appears every second Sunday. Doug Hodgins, a chartered accountant, certified financial planner and registered financial planner, is Calgary branch manager of Dundee Private Investors Inc. First, consider selling any non-registered investments that you may have. The tax consequences of selling a non-registered investment are usually less severe than a withdrawal from RRSP funds. If you're selling stocks or bonds or a mutual fund outside of an RRSP at a profit, you'll usually be triggering a capital gain. Since only 75 per cent of the capital gain is taxable, the tax bill will be lower than an RRSP withdrawal. The trustee of your RRSP plan will also have to withhold income taxes when you make the withdrawal. If the withdrawal is $5,000 or less, the withholding of income taxes will be 10 per cent; if the withdrawal is between $5,001 and $15,000, the withholding is 20 per cent; and for withdrawals above $15,000, the withholding is 30 per cent. That is not the end of your tax bill of course.