Year-end checklist for investors: 10 things to consider

Year end checklist

With the bustling holiday season in full swing, and the end of the year fast approaching, pair your shopping list with a financial checklist. Here are 10 investing tips to consider so you can start off the new year on the right foot.

1. Plan your TFSA contributions and withdrawals

Tax-Free Savings Accounts (TFSAs) offer great flexibility, but making withdrawals or deposits without a plan can lead to over-contributions and missed opportunities. Make strategic money moves, like withdrawing before year-end so the withdrawn amount is added to your contribution room on January 1, and plan contributions for the next year. Then keep track of your contributions with a tool like our goal setter. 

For more information about TFSAs read "TFSA Basics".

2. Maximize your RRSP

Take advantage of contribution room in your Registered Retirement Savings Plan (RRSP), so you can lower your tax bill. You have until March 1, 2021 to contribute to your RRSP to generate a tax credit for the 2020 tax year

Wondering whether to contribute to a TFSA or an RRSP? Check out “RRSP vs TFSA: find the right balance”. 

3. Consider converting your RRSP to a RRIF  

Are you retiring soon? Or are you about to turn 71? Then consider making the switch from an RRSP to a Registered Retirement Income Fund (RRIF). 

To familiarize yourself with what the conversion entails, read our article “RRSP to RRIF”. 

4. Contribute to an RESP

The contribution deadline for RESPs is December 31. If your beneficiary is under 17, your contributions will qualify you for government grants. Keep in mind that if your beneficiary turned 15 this year, you must have contributed at least $2,000 before year-end, or at least $100 in any previous four years. That way, the contributions will be eligible for the Federal Canada Education Savings Grant (CESG) when the beneficiary is 16 and 17. For more information on RESPs, download our Guide.

5. Sell positions for a tax loss

If you have a non-registered investment account, and you hold investments that suffered losses during the year, consider selling them to reduce your tax bill. The strategy is called tax-loss selling, and it allows investors to sell securities at a loss to offset capital gains.   

6. Make a charitable gift

Giving back is even more rewarding ahead of the new year. Not only do you help make the holidays joyous for those in need, but those contributions also reap tax benefits. That’s because gifting cash to charity and donating other assets are tax deductible. You have until December 31 to make charitable donations if you want to take advantage of tax credits for the year.  

7. Rebalance your portfolio 

Based on the performance of different assets over the course of the year, your portfolio may have shifted from your asset allocation target. Consider trimming some positions and adding to others in order to rebalance your portfolio to your target mix of assets. 

8. Revisit your budget and automatic savings contributions

Review your income, expenses and savings to make sure you are on track to meet your goals. If you want to boost your savings, consider setting up automatic contributions, so part of your income is directed to your savings or investing account(s).

9. Rein in your holiday spending

Plan your holiday spending and stick to your budget to prevent a financial hangover come the new year.

10. Start thinking about next year

Before the holiday rush, start mapping your financial goals for the coming year. Take the time to develop a financial plan that can help set you up for a prosperous year ahead.