Topped up your RRSP contributions Think twice before spending that tax refund

OTTAWA — You might be feeling pretty good about that contribution to the RRSP account and may be daydreaming a little about how you’re going to spend the tax refund.[np_storybar title=”The pros — and perils — of making early withdrawals from your RRSP” link=”https://business.financialpost.com/personal-finance/retirement/rrsp/the-pros-and-perils-of-making-early-withdrawals-from-your-rrsp”%5D There is a case to be made for withdrawing from your RRSP early. Here’s how to know when to start a ‘strategic RRSP drawdown.’ Read on [/np_storybar]But investment experts say people should think twice before blowing that cheque from the government on a new television or a quick weekend getaway.“What you have to remember is that it’s not actually a windfall, it is money that you’ve paid in taxes that you’re getting back for funding your retirement,” said Larry Moser, divisional manager for BMO Investorline.He said people need a strategy for the money, whether it is investing it or paying down debt, depending on financial circumstances.For those with high-interest debt, such as credit card debt, Moser says that would top his list for uses of a tax refund.When making an RRSP contribution, people aren’t avoiding tax on their contributions, they’re only delaying it. The advantage comes from the tax sheltered growth and it is likely people will be in a lower tax bracket in retirement when they withdraw the money than when they earned it.“The idea is to grow your money in a tax-free environment for as long as possible,” Moser said.Watch out for these three potential pitfalls when planning your RRSP investmentsYou can tap your RRSP to buy a first home — but be carefulFP’s exclusive 15-year mutual fund review tablesHowever, advisers say people need to remember that they will pay tax on the money when it is withdrawn. That means $100 in an RRSP does not necessarily mean $100 in your pocket when you take the money out of the account in retirement.Personal finance author Talbot Stevens says investors need to understand the difference between before-tax and after-tax dollars when it comes to their RRSP accounts.He says if they don’t put the equivalent before-tax amount in their RRSP, they are investing less than they think.“We need people to realize that if they are going to spend their RRSP refund, as almost everyone does, you’re putting in less than you thought,” said Stevens, author of the Smart Debt Coach.Even something that doesn’t seem like a lot of money right now, it could end up being a lot of money in the futureStevens recommends people invest their tax refund and more to help make up the difference, suggesting that Canadians need to top up their RRSP contributions by 25 per cent to 100 per cent.A poll done for BMO found that 33 per cent of Canadians who expect to receive a tax refund after making an RRSP contribution will save or invest the money. Other top uses included paying down a mortgage (16 per cent), home renovations (14 per cent) and travel or leisure items (13 per cent).Moser said a $2,000 tax refund might not seem like a lot of money in terms of your retirement, but if you reinvest it every year it will add up.“Even something that doesn’t seem like a lot of money right now, it could end up being a lot of money in the future,” he said.The BMO survey was conducted by Pollara with an online sample of Canadians between Feb. 22 and 24.The polling industry’s professional body, the Marketing Research and Intelligence Association, says online surveys cannot be assigned a margin of error because they do not randomly sample the population. Illustration by Chloe Cushman read more

Loblaw verifying accuracy of its coincounting machines after TD Bank ditches theirs

TORONTO — Canada’s largest grocery chain says it’s trying to verify the accuracy of the coin-counting kiosks in its stores after TD Bank got rid of similar machines from its branches over allegations that they’ve been nickel-and-diming customers.“We are aware of the concerns recently raised about coin-counting machines,” Kevin Groh, the vice-president of corporate affairs and communication for Loblaw, said in an email.“We have been working with Coinstar to confirm the accuracy of the coin-counting machines located in our stores and have no current plans to remove the machines. Should customers have a concern with any of the coin-counting machines in one of our stores, please contact our customer service team to let us know.”Toronto-Dominion Bank facing class action lawsuit over coin-counting machines in CanadaTD Bank retiring coin-counting machines following complaints customers were short-changedThe coin-counting machines located in Loblaw stores are owned and operated by U.S.-based Coinstar, the same company that owned and operated the machines that TD Bank pulled from its Canadian branches in May.Last month, a class-action lawsuit was filed against TD on behalf of everyone who used the coin-counting machines at the bank’s branches between Jan. 1, 2013, and May 25, 2016.Grocery store chain Metro also has Coinstar machines in its stores. A spokeswoman said the company has not received any complaints about the machines and therefore has no plans to remove them.But Metro will continue to monitor the machines to “ensure our customers’ satisfaction,” Genevieve Gregoire said in an email.The lead plaintiff in the class-action lawsuit is Lisa Ram, a woman from Kitchener, Ont., who says she counted her coins before depositing them in a machine at a TD Bank in the city.Ram says she had a total of $854.25, but was shortchanged by $159.50. She alleges that she complained to the bank but they failed to do anything.A statement of claim filed by Toronto-based law firm Sotos LLP alleges that the bank knew about accuracy issues with its machines south of the border, but still proceeded with a national rollout across Canada in January 2013.The allegations have not been proven in court.In order to proceed as a class-action, the suit requires certification from the Ontario Superior Court.TD Bank declined a request for comment, saying it could not comment on the pending litigation.Coinstar said in an email that it aims to provide customers with “convenient, reliable and accurate” service and that its machines have processed more than one billion transactions over the last 25 years.Any customer who has questions or concerns should contact customer service staff, the company added. read more

Indian Lok Sabha likely to discuss Lankan Tamils issue

Expressing solidarity with agitating members, DMK representative in the Government, Minister of State for Finance S S Palanimackam also wore a black shirt though he did not participate in the protest. The issue was raised vociferously by AIADMK members, who trooped into the Well of Lok Sabha twice raising slogans.Outside Parliament, DMK MPs staged a protest carrying placards which read ‘Save Tamils in Sri Lanka’. Speaker Meira Kumar may allow a short duration discussion on the Sri Lankan Tamil issue on Thursday under Rule 193, which doesn’t entail voting, sources said. With Tamil parties adopting a tough stand on Sri Lankan Tamils issue, the Lok Sabha in India is likely to have a discussion on the matter on Thursday under a rule which does not entail voting, the Press Trust of India reported.In an attempt to mount pressure on the Government, MPs of the DMK, a major partner of the ruling UPA, today attended House proceedings wearing black shirts after staging a protest inside the Parliament House complex. read more

Three drown after boat overturns Updated

Three people drowned after the boat they were in capsised in the Kaluganga in Ratnapura today.According to the police, a father and his two children were those who had drowned. The police said that 9 people from Negambo had got on the boat together with a boatman and were heading from one side of the river to the other side.Half way through the boat capsised and a 42 year old man as well as his 19 year old son and 14 year old daughter went missing. Several others who were on the boat were rescued. Two of them sustained injuries and were admitted to hospital. The people on the boat were returning after attending a funeral house when the accident took place. The bodies of two of them were later found. (Colombo Gazette)

Families of political prisoners seek TNA response

The families of Tamil political prisoners have written to the Tamil National Alliance (TNA) seeking clarity on their stand on the Tamil prisoners.In a letter to TNA leader R. Sampanthan, the families of 217 Tamil political prisoners who launched a fast recently, have said they want to know the stand the TNA has taken with regards to the issue before November 7. President Maithripala Sirisena had assured a solution to the prisoners before November 7 which resulted in the prisoners suspending their recent fast. There were reports that some of the prisoners can be given bail and the families have urged the TNA to ensure all Tamil political prisoners are given amnesty or freed unconditionally. (Colombo Gazette)

Passenger arrested with chains and bracelets at BIA

A passenger was arrested at the Bandaranaike International Airport (BIA) today wuth chains and bracelets in his possession.The customs department said that the passenger, a resident of Gampaha, was arrested by the staff of the customs department at the arrival lounge of the airport. He had in his possession four packets containing 363 pieces of chains and seven bracelets, weighing 2,013.7 grams and valued at Rs. 11,075,350.00,The items had been concealed in a whisky bottle box. The passenger had arrived from Singapore.

Three people cleaning well in Lunugala killed from toxic gas

The three men fell into the well while cleaning it and were reported dead. Investigations are underway. (Colombo Gazette) Three people cleaning a well in Lunugala had died after reportedly inhaling toxic gas, the police said.According to the police, the three men had been cleaning the well located in a school in the area.

Wimals brother Sarath Weerawansa arrested by FCID

Sarath Weerawansa, the brother of former Minister Wimal Weerawansa, was arrested by the police Financial Crimes Investigations Division (FCID) today.He was arrested over the alleged misuse of a government vehicle when his brother was a Minister in the former Government. Sarath Weerawansa was produced in court and remanded till September 7.

IMF says Sri Lanka on track to economic recovery

An IMF staff team led by Manuela Goretti visited Colombo from February 27 – March 9 to hold discussions for the 2018 Article IV consultation and advance the technical work on the fourth review of Sri Lankan authorities’ economic reform program under the three-year Extended Fund Facility (EFF). The IMF mission had constructive discussions with the Sri Lankan authorities on the 2018 Article IV Consultation and made progress towards a staff-level agreement on the fourth review of the EFF-supported program. Program discussions will continue in April in Washington D.C. during the Spring Meetings of the IMF and the World Bank, the IMF said. The IMF says despite weather-related shocks and some delays in implementation, program performance remains broadly on track. The new Inland Revenue Act (IRA) and the Central Bank of Sri Lanka’s (CBSL) Roadmap towards inflation targeting represent landmark reforms and their successful implementation is critical going forward. Fiscal consolidation is advancing, with preliminary data showing a primary surplus in 2017. The CBSL has been effective in curbing credit growth and stabilizing inflation despite recent pressures, while stepping up its pace of reserve accumulation.Nevertheless, the economy remains vulnerable to adverse shocks given the still sizable public debt and low external buffers. Looking ahead, to secure these hard-won gains and support inclusive, sustained growth, the reform momentum needs to continue and policy frameworks and institutions further strengthened. (Colombo Gazette) The International Monetary Fund (IMF) says following a series of weather-related shocks in 2017, the economy in Sri Lanka is gradually normalizing.Real GDP growth is projected to rise to 4.4 percent in 2018, supported by a recovery in agriculture and industry and robust growth in services, reaching 5 percent over the medium term. Inflation is projected to revert to around 5 percent by end-2018, as food prices stabilize. read more