Test Your Knowledge
1. Which of these statements is false?
Answer
b.
To stay in control of your finances, you should
review your budget as soon as a change occurs in your life. This can also be when you get a pay increase! When you have a higher income, it is tempting to increase your standard of living without considering saving more, but this is the best time to do so.
3. Which of these tips allows you to save efficiently?
Answer
All of the above.
You must determine your savings goals realistically by taking your budget into account. These few tips can help you save money efficiently.
5. Which of these types of accounts can help finance the purchase of your first home or condo?
Answer
Although all of these types of accounts can be used to finance the purchase of your first home or condo,
an
FHSA and an
RRSP are the most advantageous. Putting money into an
FHSA or
RRSP reduces the income on which you pay income tax. You could therefore receive a tax refund. When you use the accrued amounts in an
FHSA to buy a property, not only do you not pay income tax, but you also do not need to put that money back into your
FHSA. Conversely, when you choose an
RRSP, you must repay the money used in that account before a certain date to avoid increasing the income on which you pay income tax.
6. What should you know to find out how much you need to save for retirement?
Answer
b.
Usually, to maintain your current lifestyle, you will need to replace between 60% and 80% of your income before income tax. Your retirement could last 30 years if you stop working at age 65. To ensure you do not run out of money, consider the likelihood of living to age 95 (according to the Institute of Financial Planning). In retirement, you can count on basic income: the Old Age Security pension from the Government of Canada and the pension under the Québec Pension Plan. Your income will also come from your personal savings, that is, the money you have set aside for retirement.