What happens at your death is your accounts are inherited fully by your spouse, but we don’t transfer the investments to her accounts. They might be deemed disposed where appropriate (non-joint, non-registered investments) for your final tax/probate bill, and the tax basis of the investments is thus also inherited by the spouse.  The account ownership is changed from you (or Joint) to solely hers.  You don’t own it anymore, she does. She can use it as her own, and whatever taxes it attracts will also be solely hers. Make sense?

Hello everyone,

I hope you had a great summer. Mine was spent mostly on back-end improvements. We were getting close to outgrowing our cloud provider in terms of capacity for running simultaneous TIME MACHINES  as the MoneyReady App user-base has increased dramatically in the last few of years, a good problem to have. Growing pains were expected as the MoneyReady App turned 6 years old this summer! After considering several options, we finally moved the entire site to Amazon AWS in Montréal. It went quite smoothly with no disruptions for our users, and I'm very happy with that service.

But today I want to announce a new feature and front-end improvements that you will notice:

For maximum accuracy, the TIME MACHINE uses calendar dates for its calculations, so it needs actual dates. However dates that are far in future are hard to grasp, and we naturally tend to want to convert that date to the age we will be at that date. For this reason, in most forms where a date is required, you can now enter a date, or an age (less accurate), or the life event you want the date tied to. In all cases it is the date that will be used in the TIME MACHINE, and you will see below the entry what date that is, and what age that corresponds to (in years and months).

The new LIFE EVENTS table stores the important dates.  We pre-filled it with what you’ve entered in your Quick Entry Form or later edits, for your retirement date, for the age of the start of taking CPP/QPP and OAS, and the year of death. We also added some convenience dates when you have a spouse, like first and last to retire, and first and last to die. All the life event in this table can be used to link most of your subsequent entries for the start or end of INCOMES, EXPENSES, AUTOMATIC SAVINGS/WITHDRAWALS etc. to that life event. 

This new feature is entirely backwards compatible with what you previously entered, as we've always provided the ability to linking entries to your retirement date (or spouse's). You will find them still linked in that case. The difference is that the retirement dates will now be found under LIFE EVENTS in the left menu, and no longer under PROFILE.

You can edit these life events, and when you change the date, all dates linked to that life event will be changed automatically. For example, the default pre-retirement EXPENSES entry that was automatically added for you will have its start linked to "Previous to this year" and end linked to your retirement date. The post-retirement EXPENSES has its start date linked to retirement and end linked to the date of death.

This LIFE EVENTS table also shows you the entries that are linked to the life event.

You can add your own life-events that you may want to link entries to. For example: "start family", "inheritance", "buy house", "empty nester", "downsize", you get the idea. This is great to do if there is a  life event that you want to tie to changes to in your INCOMES,  EXPENSES, SAVINGS, REAL ESTATE, and other entries. You will also be able to run SCANS on that life event to explore a range of dates for that life events automatically, and all entries linked to it will automatically use that new date.

I hope you have as much fun playing with it as I had implementing it. It's a powerful new feature for easily exploring and comparing different scenarios. As always your feedback, questions, and suggestions are always welcome.

Elisabeth

In the the MoneyReady App you can certainly model both the leveraged scenario with dividends  and compare it to the other scenario where you just withdraw from the RRSP.  The dividend scenario is not guaranteed to work better, it's highly dependent on the factors like your yield and interest rate on the loan (which should be deductible in most cases). The taxes you pay on the dividends are highly dependent on other sources of income, so you also need to condider the timing of CPP and OAS (with its pentential clawbacks). Leveraged scenarios are also inheritently riskier, so that is also something to consider.

Let us know what you find!

Thanks!

For the current year, the amounts for deposits and withdrawals shown in the Time Machine are the amounts from today to the end of the year. The Time Machine starts from today, with today's account balances, thus deposits and withdrawals are shown from today to the end of the year. You don't need to adjust them. The Time Machine prorates your Incomes, Expenses, and any entered Automatic Savings/Withdrawals, since those are set for the entire year (with some exceptions, as you can set one-time lump-sums that are not prorated). It calculates public pensions (CPP/QPP/OAS/GIS) for the entire year, but shows you what is left to be received this current year. It calculates taxes for the full year given all your income, which is why we ask how much you've already paid in taxes this year before you run the Time Machine, so it can credit you. Then it tells you what needs to be deposited or withdrawn in the accounts for the rest of the year.

RRIFs and LIFS are special cases because there are mandated minimum withdrawals from those accounts. We must ask you for the last end of year balance and what has already been withdrawn year-to-date (you set that in the account's properties), because the Time Machine calculates the minimum withdrawal for you. It will tell you how much to withdraw at a minimum if you haven't already. To that, it will add any additional withdrawals, if any, to cover your expenses or additional automatic withdrawals you set up.

Believe me covering the first year of the Time Machine both easily and accurately is not a simple problem. First, we take pride in our accuracy. We use your current account balances and expect you to keep them updated, and if you wish at no extra cost to you, we automatically update them for you with market data or Wealthica. So we expect you to have the most accurate values for today, not Jan 1 values, which are quickly out of date. Future projections are hard enough, we need to start from a known accurate base. Second, we try to keep the app as simple as possible for you. We ask as little as possible and still be accurate, and useful as we show you the data you don't know, not what you already know. What happened Jan 1 to today, you already know, it's in the past. For the app to give it to you accurately, we would have to ask you for all that data, (all balances, deposits, withdrawals, actual growth/loss to date of investments, how much you've actually earned and spent),  which would be a great pain to enter and not that useful to you since you already know it. You can fill in the current year that has already past more accurately than we could estimate it if we were to "predict" the past. 

That said, I'm still working on finding a solution so that you can get a complete first year that is accurate, and not too painful to enter the data necessary to get that needed accuracy.

The big news today is that the house of commons approved the proposed tax cut for the lowest income tax bracket. It still has to pass legislation, but that looks like a done deal, so we've implemented it in the MoneyReadyApp. It will go from 15% to 14.5% in 2025 and 14% in 2026. This will help everybody as it reduces the taxes paid on the first $57.375 of earnings. However, that lowest tax rate is also used to calculate non-refundable tax credits, so the overall tax savings may be a little lower than advertised

Other recent changes:

You can now link an EXPENSE to a real estate property. This makes sure the expense does not occur before the property is bought or after the property is sold.

I've been asked too often (including on this forum) how to enter an inheritance. A new `Inheritance' INCOME type makes it easier.

The TIME MACHINE calculates the taxes for the current year in full, and then credits you with the amount of taxes you told it was already paid in the screen right before launching it. You're telling me she's still paying $1000/month in taxes deducted from her pay, and you expect she'll get a ~$6000 tax refund when she files taxes next year. So there's a bit of cash problem and you need to withdraw more from your investments.

The TIME MACHINE has mostly a resolution of one year and it must close the books on taxes each December 31. It would give her the tax refund on that date and that will reduce the amount that needs to be withdrawn to meet your expenses.

Your work-around of adding an Expense is fine. You can also add a one-time Income, not taxable, to recoup the expense on the date you expect the tax refund in 2026.

The amount deducted at source from her employer seems high. It indicates the employer is not aware of deductions she may have. You might want to consider filing this form with the CRA to reduce tax deductions at source:

https://www.canada.ca/en/revenue-agency/services/forms-publications/forms/t1213.html

If you do, it has to be done every year.

Also consider that EI and CPP contributions stop once you've paid up the maximum contribution amounts, so that it's common for high earners to get a boost in take-home pay later on in the year. On her last pay-slip check how much EI and CPP she's paid already. For 2025 the EI max is $1077.48 and the CPP max is $4,034.10 (plus a bit more for CCP2)

We've added an 'Inheritance' Income type as a shortcut.

Pension income splitting can occur at any age, as long as there is eligible pension income to split. The TIME MACHINE calculates the future eligible pension income, and then  optimizes the amount to split using 2 criteria:

1. To equalise taxable income between the 2 spouses, so pension income can be claimed by the lower income spouse rather than the higher income spouse

2. If possible for both spouses to get the pension income tax credit, so that even a higher-income spouse can receive pension income from a lower-income spouse up to the maximum amount for the pension income credit.

There are some additional complications for Québec due to whether splitting is allowed for the health tax based on age.

RRIF withdrawals become eligible pension income only at 65 as you said. How it will be split is determined by the TIME MACHINE to try to optimise it.

Today is not Jan 1. The MoneyReadyApp tries to be accurate as possible. Projections in the future make a lot of assumptions, but at least we can know the current situation today accurately, so we start from that.

We use your current account balances. One of it's best features is to our ability to keep your accounts current to today automatically with our free Fundata and Wealthica integrations. To give you accurate current projections, we run these projections with accurate data today, from today. When entering incomes/expenses and other components, enter their real start dates, you don't need to adjust those, you stick to reality for those, the TIME MACHINE adjusts.

What you do need to adjust are any taxes already paid this year in the screens right before running the TIME MACHINE as it will calculate taxes in full for the year, and if you've already paid some (via at source deductions, installments, withholding etc) you want to be credited for that.

With the current volatility in markets around the world, this announcement of new features to make updating all investments' properties easier is either timely or untimely. That depends on whether you closely monitor your investments or ignore them in such times.

Mock investments. You can now set any investment (except 'Cash' investments) to be ignored in the TIME MACHINE and in net worth calculations. This is useful to run scenarios with portfolios of different investments you are considering. Ignored investments will still have their values automatically updated with FUNData market data or Wealthica when applicable, so it's also useful to just follow these investments you are considering but may not own yet.

View/Edit all Investments in all Accounts now allows you to edit most properties of all investments entered all on one page. Besides price, shares, market value, and book value, you can now change the risk value, default current expected returns, fees, and whether to ignore the investment or not.

Update from a spreadsheet. If you have many investments that need to be entered or updated manually, you may want to update from a spreadsheet (particularly if you do not use Wealthica). Most financial institutions allow you to download your investment values into a comma-separated (csv) or other file format that you can then get into a spreadsheet program to view it. Once you have your data in a spreadsheet program like Excel, Google Sheets, or Numbers, you can now import those data to update your investments in the MoneyReady App.  For adding new accounts and their investments, first add the Account in the app, then the spreadsheet can be used to add the investments into it. I refer you to the eBook to learn how to set up the spreadsheet for import. It's easy to get a template by simply downloading your current list of investments from the View/Edit all Investments in all Accounts page.

Many are asking me how to deal with the current market volatility. Do not panic. Keep a long-term view for long-term investments. Make sure the money that is needed short-term is there for you by not having it tied up in the market.

Remember, we provide the tools for you to determine how resilient your portfolio is and thus be prepared for market volatility: https://www.moneyreadyapp.ca/blog/post/14

All the Best to all my fellow Canadians,
Elisabeth

Yes, you can add investments to any account (so you may want to create a non-registered account to hold these).

Add a CAD or USD investment as appropriate.

The type of the investment would be "Other", and you would enter a name for it, say "art".

Enter 1 share, its value (current appraised value), its book value (what you paid for it after the costs of buying it), and the Asset Type as "Alternative or other investment".

Enter an expected Capital appreciation growth rate (% per year).

The other rates probably don't apply.

Update:

sparklingProkaryotepudding6 wrote:

do I need to change the age to convert to RRIF and do various runs to see by trial and error which results in the best for me in terms of minimum lifetime taxes or maximum estate at end of life? Thanks in advance!

You can now run SCANS on the age of conversion, with or without the Withdrawal Optimizer, to explore its impact on your plan automatically.

The feature is now implemented. We ask for the MER as that is simplest for users, but you can fudge it as you like if you want to make it higher to consider additional fees.

In my last Announcement, I mentioned users wanted more and more detailed reporting.

• We've added a new GAINS table in the year reports. 
  • This table breaks down the total investment gains by type (interest, foreign dividends, eligible dividends, capital growth), by account type and for each account. It also shows the total fees (account maintenance fees, trading fees, and MER fees) paid, and any foreign taxes withheld. Additionally, realised capital gains and losses are shown.
• A new Sankey diagram right above the GAINS table shows the cash-flows in and out for the different account types types. 
• To accurately report the MER fees, we need to capture these for your ETF and mutual fund investments (optional).
  • The Management Expense Ratio (MER) corresponds to the total cost of managing and operating the fund, expressed as a percentage of the fund's assets. It is charged indirectly to the investor by reducing the returns. Fund returns are always reported by the fund after deducting the MER. We ask if the expected rates of return have not already been reduced by the MER. If you check the box, then the MER entered will reduce the expected yields you entered in the TIME MACHINE. Leave the box unchecked if you do not want the returns to be reduced by the MER. In either case, you will see an estimate of the fees paid in total for each account in the GAINS table. 
  • We will be adding the current MER fees as defaults for the most commonly-held ETFs eventually, but you may need to look up up the MER fees for your fund.
• You can now run 100 market-model simulations on Optimized scenarios. 
  • When you run the Withdrawal Optimizer or the CPP/QPP and Withdrawal Optimizer, there will be a button to run 100 market simulations on the results of that run (under Tools). For these simulation runs, the market model is used, but also your scenario will be modified (in the background) with the changes made to your scenario to reflect the results of the optimization. This means each simulation run will use the withdrawal strategy of the optimized run, and the optimal CPP/QPP start age(s) it calculated in the case of the CPP/QPP and Withdrawal Optimizer.

Please let me know if you have any questions or suggestions.

PRIORITIES determine the order of accounts to deposit money in years you have a surplus, or to withdraw from accounts in years you have a deficit.  It is a great strength of the MoneyReady App that you can control that, but I've noticed that sometimes users get stuck on this.

PRIORITIES tables no longer intermingle your accounts with your spouse’s accounts and your CCPC accounts. 
Each of those now require separate tables. This sounds like it would be more complicated, but it actually makes things a lot clearer.

The entire PRIORITIES section of the eBook has been rewritten, and for visual learners, we have created a new video explaining how PRIORITIES work in detail.

It was a good time to make this change as you will be required to review your PRIORITIES with the New Year (see below).

I'm a bit sad to see 2024 go, as it was an amazing standout year for the MoneyReady App. We celebrated it turning 5 years old, and though you'd think we'd run out of features to add, far from it! Here's a brief summary of the upgrades we made and announced in 2024:

Reporting.

• The summary cash-flow report has been a big hit. So much so that I've been considering showing it instead of the TIME TABLE as the default report you see at first.  What do you think?
• The Table of Contents of the full Report has also been appreciated. However, someone made the comment on social media that our reports are too extensive. Given that my actual users most often request more and more detailed reporting, I do find that an odd comment.
  
• We've recently added a new graph breaking down the source of investment growth over all your accounts, and we are planning more detailed reporting of growth.

SCANS.

• The ability to do parameter scans was added at the end of March. It's a powerful feature, I'm surprised it's not used more.
• We recently added the ability to run SCANs with the Withdrawal Optimizer, and that should help its popularity. Particularly if you have investments held in your corporation (see below).

Taxes.

• The Federal government kind of forced our hand here with the changes in the Capital Gains, and the Alternative Minimum Tax. We ended up implementing the AMT. I expect more changes to come.
• Québec likes to do things differently, and we worked on implementing more of its particularities for improved Québec tax calculations and our reporting of them.  We now include RAMQ premiums and contributions to the Health Services Fund when payable. We've added the Senior Assistance tax credit, the Solidarity tax credit, and the Family Allowance. 

Permanent life insurance.

• This had been often requested but was very difficult to add. It's difficult because only the insurance company has all the information necessary to do all the calculations. The workaround requires you to get an "illustration" from your insurance advisor, that we can now incorporate into the MoneyReady App.

CCPCs.

• We greatly improved the reporting for CCPCs. They now have their own detailed year reports, complete with Sankey cash-flow diagrams.
• What I'm most proud of is the ability to automatically direct the tax-optimal withdrawals of the different types of dividends from the CCPC.
• Combined with the ability to perform SCANS on the amount of income required, you can find the optimal mix of salary and dividends to withdraw from your CCPC before retirement.
• For after retirement, you can run a SCAN with the Withdrawal Optimizer of the dividend income required to determine the best withdrawal strategy in retirement considering both the CCPC investment accounts and your own personal accounts.

All this hard work paid off as we got attention from the Press this year. Both Bruce Sellery and Rob Carrick told me it was MoneyReady App users who recommended the app to them and urged them to make it widely known. And they did, big time.  Many of you now are new users, so welcome! 

You know where to find me if you have questions, comments, or suggestions.
Thank you for spreading the word.

Happy New Year everyone!

Elisabeth

New Year Checklist:
Here is a list of things that need to be updated at the start of the year, and sometimes throughout the year to keep the TIME MACHINE calculation as accurate as possible.

• CPP/QPP table(s). An entry for pensionable earnings for last year will appear. You will need to estimate what those were until the actual amount is updated at the CRA or Retraite Québec later in the year. 
• Changes in ACCOUNTS. For the accounts listed below, you’ll need to ’Edit Account Properties’. Review each account, and click ’Save and continue’ on every form, as some of the information required may appear on subsequent forms.
  • RRIFs and LIFs. For each of these, enter the balance of the account at the end of last year. If you make any withdrawals during the year, update the total withdrawn this current year.
  • FHSAs. You must also ’Edit Account properties’ for any FHSAs to reflect the cumulative amount contributed to date.
  • RDSPs. Update the table of previous contributions if one appears. If you make a contribution this year, enter the amount once made, and you will need to come back and check the box once the grants/bonds have been received so that they are not double counted in the TIME MACHINE.
  • RESPs. Make sure the table of previous contributions and withdrawals is kept up to date.

• PRIORITIES. Just review the PRIORITIES once you've updated the accounts. A new entry for this year will be created automatically from last year if you haven’t created one for the new year previously.
• TIME MACHINE. There are up to 3 screens that capture current year tax information before running the TIME MACHINE: one for yourself, one for your spouse, and one for your CCPC when applicable. Please update the amounts asked for the current year, and keep them updated throughout the year.
• Tax owing or refund. If you expect a tax refund from the previous year’s taxes, you can enter it as an Income (Other, not taxable) with start and end dates on the date you expect to receive it. Similarly for tax owing, enter it as an Expense for the date you expect to pay it.

Hi everyone,

The response to the press attention mentioned in my last two announcements has been phenomenal and has kept me very busy answering questions from new users. But I've also made improvements to the MoneyReadyApp over the last couple of months that I'd like to share with you today.

1. SCANs can now be run with the Withdrawal Optimizer. This makes it possible to make sure your after-retirement withdrawal strategy is optimal for any value of the parameters being scanned.
2. It also makes it possible to determine the best withdrawal strategy that also considers the depletion from CCPC investment accounts by performing a SCAN on the Optimized Dividend INCOME from the CCPC. This is a feature I've gotten a lot of requests for from business owners. 
3. If you have a CCPC, the value of the CCPC at death is now shown in your list of saved runs so you can easily consider the value of both your CCPC and personal estate when comparing runs.
4. Using a younger spouse’s age to calculate the minimum required RRIF/LIF withdrawals is usually beneficial so we had made it the default behavior, but it is now optional. For accounts where that may be applicable, Edit the Account Properties until it asks you whether to use the younger spouse’s age. Uncheck the box if you want the account’s owner age used to determine the minimum withdrawal.
5. The 100 Monte Carlo simulation results now display how many of the samples did not have a cash-flow problem.
6. We now consider Preferred shares as having their own separate asset allocation separate from Equities (common shares). With the rise of Crypto ETFs, we also allow an asset allocation to Crypto (previously "Other") for these. Default rates for these asset classes have been added.
7. We are getting ready to capture Second Additional Contributions to CPP and QPP which started in 2024. The TIME MACHINE has always calculated those in the future, but as of 2025, we will need to capture the past contributions (from 2024 on). You will see some changes to your CPP and QPP contribution tables.

As always, the details are in the MoneyReady App eBook and appropriate Help pages. Let me know if you have any questions or suggestions.

And I want to extend a warm welcome to all our new users!

Very well said @Runner4Life