Why is an investing website talking about goods and service tax/harmozined sales tax (GST/HST)? Let’s clear the air first. Canada’s gig economy has grown significantly, with many Canadians doing a side hustle alongside their main job. A graphic designer might be a content creator, or a music editor might be a yoga instructor on weekends.

If you are spending money on your side hustle, not having a GST/HST number is leaving money on the table. Many Canadians delay investments as they have nothing left after expenses. What if these expenses can unlock the money to invest?

Let’s find some money to invest.

When does a side hustle need a GST/HST number?

The Canada Revenue Agency (CRA) requires businesses, including gig workers and freelancers, to register for GST/HST if their revenue from a side hustle exceeds $30,000 in the past four consecutive calendar quarters.

Once you exceed the threshold, the CRA gives you 30 days to register and start collecting GST/HST from clients and remitting it to the CRA. Many avoid hitting this threshold given the extra paperwork of filing GST/HST returns. What one doesn’t see is that GST filing introduces the input tax credit (ITC) claim.

How to make the most of your GST/HST number

If you pay GST on a good or service that is necessary to perform your side hustle, you can claim ITC for it. Let’s understand with an example. Maya started a corporate packaging business alongside her job and paid $500 GST on an e-commerce subscription, packaging material, display products, advertising, and delivery fees. She got a GST number for her side hustle even if she did not hit the revenue threshold. Here’s why.

Her 2026 revenue was $15,000. Because she had a GST number, she could collect 5% GST of $750 from her clients. She can claim the $500 GST she paid for business expenses as ITC and remit the remaining  $250 to the CRA. Had she avoided getting a GST number, the $500 would be left on the table to avoid extra tax filing and documentation.

ITC has no upper threshold. You can claim ITC on the GST you paid for your business expenses, and this claim can run into thousands of dollars if it was a good year for your gig.

ITC is different from CGEB

Do not confuse ITC with the Canada Groceries and Essentials Benefit (CGEB), previously called the GST/HST credit. You do not need a GST number to claim CGEB. This benefit has a cap of $679 for a single individual for the July 2026 to June 2027 benefit year and is automatically credited to your bank account registered with the CRA.

How side hustle expenses can meet your investment needs

The ITC can help you unlock money from your side hustle and use it for investments. Consider investing through a Tax-Free Savings Account (TFSA), as ITC is not added to your personal tax, and the TFSA will keep your investment income tax-free.

If you are looking to invest and don’t know where to begin, Royal Bank of Canada (TSX: RY) is a good stock to begin with. This large-cap stock has been in the banking business for over 150 years and is deeply integrated into the Canadian economy. This one stock can give you three benefits: capital appreciation, dividend growth, and dividend reinvestment. The bank offers commercial and personal banking and wealth management services. It earns from net interest income and fees on assets under management (AUM).

RBC’s share price increases as the value of its loan portfolio and AUM increases. Its dividend grows when net income grows. The bank aims to maintain a payout ratio between 40% and 50% of net income and use the surplus to buy back shares. Financial discipline and conservative lending have helped it grow dividends in 24 out of the last 26 years. The only two years without dividend growth were 2009 and 2010 due to the Global Financial Crisis. The fact that RBC sustained its dividends when too-big-to-fail banks failed in the neighbourhood down south shows its financial stability.

Low risk, stability, and growth make RBC a beginner’s stock.

The post When Does a Side Hustle Need a GST/HST Number? appeared first on The Motley Fool Canada.

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• TD vs. Royal Bank: Which Dividend Stock Would I Buy With $10,000?
• Royal Bank Stock: What I’d Pay for a Dividend I Plan to Hold for Years
• The Bank of Canada Is Worried About Inflation: These 2 Stocks Might Not Be
• How to Use a TFSA to Generate an Average of $367 in Monthly Tax-Free Income

Fool contributor Puja Tayal has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Are you retiring this year or next year? The thought of retirement is making you apprehensive. Till now, working income had kept household expenses manageable. While you have built a sizeable retirement pool, it is time to take the next step from contribution to withdrawal. This step should be taken carefully, as one wrong decision can make a significant portion of your retirement savings vanish. So before using your personal retirement portfolio, check the Canada Pension Plan (CPP) pay you are eligible for.

How to check your CPP pay before you retire

Your CPP pay depends on your contributions, the age at which you retire, and your pay scale. If you have made contributions to CPP in your lifetime, you can check your estimated CPP pay by logging on to the My Service Canada Account (MSCA) portal. On the dashboard, select “View my benefit estimates,” and you will get an estimate. This can help you determine how to structure your post-retirement portfolio that can give you sufficient passive income for daily expenses.

The MSCA portal also gives you a statement of your CPP contributions made to date under “View my contributions,” as well as the details of the current and last two years’ CPP payouts under “View my payments.”

How to structure your post-retirement portfolio

If you are considering taking the CPP payout at age 65, the average payout is $858.34, and the maximum is $1,507.65, as of June 2026. Before delaying CPP for the extra 42%, consider your health and life expectancy because CPP taken at age 70 will cross CPP taken at age 65 when you turn 81. Unless you are in a high tax bracket, sure of living past 85, or worried about outliving your retirement savings, delaying CPP may not make sense.

One reason to take CPP payout now

Every decision in the post-retirement portfolio depends on a fine balance between tax planning, disciplined withdrawals, and risk management. In this portfolio, the risk of negative returns is high, as no new investments will replace the losses. The luxury of time that you had in your pre-retirement portfolio is absent in your post-retirement portfolio.

So if you faced a loss in your investments, consider cutting your losses and moving to a safer stock with positive returns. Take the example of Telus Corporation (TSX: T). It slashed dividends by 55% this year, as heavy leverage looms on its balance sheet. This pulled down its stock price. Anyone having a significant portion of their post-retirement portfolio in Telus took a big hit. The company is unlikely to grow dividends for another five years as it stabilizes its balance sheet.

If you bought 1,000 shares of Telus at $17.50 per share back in December 2025, your investment value has slipped to $11,990. The expected annual dividend amount from 2027 has also been reduced to $750 from the expected $1,673 in 2026. Had you exited the stock immediately after the dividend cut was announced on July 31, 2026, your capital loss would be $4,110, as the share price was $13.39.

One of Warren Buffett’s quotes reads, “Should you find yourself in a chronically leaking boat, energy devoted to changing vessels is likely to be more productive than energy devoted to patching leaks.”

What next?

You need to fill the $923 gap the dividend stock created in your annual passive income. The $858 CPP payout per month can help. Telus could be a hold in a pre-retirement portfolio over hopes of recovery in the long term, but it is too risky in the post-retirement portfolio.

Considering its highly leveraged balance sheet, risk of interest rate hike, and artificial intelligence (AI) bubble, you cannot rule out the possibility of a dividend pause. Retirees are better off exiting Telus and investing in a safer dividend stock like CT REIT, which can grow dividends by 3% per year.

The post What Will Your CPP Pay? How to Check Before You Retire appeared first on The Motley Fool Canada.

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• Telus vs. BCE: Which Dividend Looks Better After the Cuts?
• 3 Superior Canadian Dividend Stocks for Passive Income
• Telus’s Dividend Explained: Is It Safe to Buy for Income Today?
• Canadian Telecom Stocks: Which of the Big 3 Is Your Best Buy Now?
• Tax-Loss Selling Season Is Coming: What Canadian Investors Should Know

Fool contributor Puja Tayal has no position in any of the stocks mentioned. The Motley Fool recommends TELUS. The Motley Fool has a disclosure policy.

Old Age Security (OAS) is a government pension that every Canadian who has lived in the country for over 40 years after turning 18 is eligible for. Unlike the Canada Pension Plan (CPP) where you contribute, OAS is purely funded by the government and begins at age 65. But the payout has its conditions and eligibility.

What happens when you delay OAS?

For 2026, you can get a $762.50 maximum monthly payment provided your 2025 taxable income is at or below $93,454 and you have lived in Canada for 40 years after turning 18. The Canada Revenue Agency (CRA) gives you an option to delay OAS till 70 and offers a 0.3% hike in payments for every month of delay. In five years, you can get 36% more, which comes to $1,037.

Could delaying OAS make sense?

Time is money. You have the luxury of time when you were young. You could give your investments time in the market to grow. But after you retire, the logic reverses. Time is scarce, and money is more so. Delaying OAS till age 70 might look like leaving money on the table. But there are certain circumstances that make delaying OAS sensible. Let’s look at both sides and understand the trade-off.

Reasons not to delay OAS

If you have lived all your life in Canada and are now going to live off your retirement savings, collecting as many benefits as possible makes sense. A $762.50 monthly payout can help you save up your retirement portfolio for later or to pass it on as an inheritance to loved ones.

If you have built a sizeable Registered Retirement Savings Plan (RRSP) portfolio, taking OAS at age 65 makes sense. Because at age 71, the RRSP will end, and you have to shift the portfolio to a Registered Retirement Income Fund (RRIF), which has mandatory withdrawals as a percentage of the portfolio.

A sizeable portfolio can increase your taxable income at 71, which could lead to OAS clawback. By taking payouts at age 65, you can at least enjoy the maximum eligible OAS payout for six years.

Reasons to delay OAS

Unlike CPP, OAS has eligibility criteria.

The first is income; if you are still working and your 2025 income is between $93,454 and $152,062, delaying OAS makes sense, as the CRA will claw it back. Your payout will be lower than the maximum amount if your income is above $93,454 and $0 if the income is $152,062 or more.

The second is 40-year residence. To qualify for OAS, you should have lived in Canada for

• At least 10 years if you currently live in Canada
• At least 20 years if you currently live outside of Canada

If you meet the above criteria, you can get partial OAS, which is the number of years in Canada divided by 40. If you live for 30 years, you can get 75% (30/40) OAS.

Many Canadians delay OAS to meet the residency years criteria. Because once you start collecting OAS, the additional years you live in Canada does not increase your payout.

What should eligible Canadians do?

If eligibility is not a concern for you, avoid delaying OAS for the 36% spike. The five years of payouts will make up for the 36% increase. The OAS will continue till your last breath and will automatically increase once you turn 75.

How to maximize retirement benefits

RRIF withdrawals are mandatory and added to taxable income. However, Tax-Free Savings Account (TFSA) withdrawals are tax-free and do not disturb your OAS benefits. Consider maxing out your TFSA contributions after 60 to maximize your retirement payments. Canadian Natural Resources (TSX: CNQ) is a safe dividend growth stock that can pump up your TFSA payouts. It has a safe dividend payout ratio of below 50% and a conservative debt profile, which reduces the risk of dividend cuts. Canadian Natural Resources even has a 26-year history of growing dividends at an average annual rate of 20%.

The post Could Delaying OAS Make Sense? The Trade-Offs Explained  appeared first on The Motley Fool Canada.

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• TSX Energy Stocks Could Win Big as Gas Prices Drive Inflation Higher

Fool contributor Puja Tayal has no position in any of the stocks mentioned. The Motley Fool recommends Canadian Natural Resources. The Motley Fool has a disclosure policy.

The Canada Pension Plan (CPP) is the lifeline for Canadians with no significant retirement portfolio. While you do not have a say in how much payout you will get, you can decide when to collect the payout after age 60. Delaying your CPP payout to 70 to permanently add 42% to your payout may not always be beneficial. It depends on your situation.

Is the bigger CPP payout worth the wait?

To answer this question, you will need to look at the cumulative payout and the age at which the bigger payout crosses over.

For ease of calculation, I used the average CPP payout in January 2026: $858.34 per month, or $10,300 per year. In real life, CPP payout increases annually, and your payout may be higher than the average if you maxed out CPP contributions for 40 years.

For instance, Joan starts collecting CPP payout at age 65. She will collect $51,500 by age 70. Jacob waits till his 70^th birthday and begins collecting a higher payout of $14,626.11.

While Joan has a lower payout, she has a five-year lead over Jacob. It will take Jacob 11 years to break even. Jacob’s cumulative CPP payout will surpass Joan’s after their 81^st birthday.

This math shows delaying CPP may not be worth the wait if you do not expect to live past 80. However, there is no one-size-fits-all solution in finance. Each individual has a different financial situation and, in some cases, delaying CPP payout to 70 makes sense.

When does it make financial sense to delay CPP to 70?

Tax can change the equation drastically. If you work past 65 and are in a higher income tax bracket, you might want to delay CPP  payouts until your tax bracket reduces. You may have a higher salary, significant taxable investment income, or, like Batman,  your superpower is – you are rich. The CPP payout is taxable income, and someone with a 30–40% tax rate might be feeding their retirement pool to the CRA by collecting CPP early.

Long life expectancy can also make CPP delay sensible. If you are worried that you may outlive your retirement savings, one strategy is to use your personal retirement investments and then begin the government benefits. A 42% increase in CPP payouts in just five years is a pretty lucrative return.

While the inflated CPP payout may not meet all your retirement income needs, it will provide safety from default. CPP will continue to pay even in an economic crisis.

A stock to overcome the five-year gap

You can reduce the CPP payout gap between age 65 and 70 by investing in dividend growth stocks like Royal Bank of Canada (TSX: RY) through a Tax-Free Savings Account (TFSA). RBC has a 26-year history of growing dividends at an average annual rate of 10%. As one of Canada’s top six banks, and with over 100 years of banking, RBC offers a reliable dividend payout.

If you earned a $100 dividend in 2010 from your RBC stocks, your 2014 dividend payout would be $142. Just go up the five-step ladder to see how much a $100 dividend invested five years ago has grown. A $100 payout in 2022 is $132 in 2026. Unlike CPP payout, this dividend could be tax-free through a TFSA and maintain your Old Age Security payout.    

The post Delaying CPP to 70: Is the Bigger Payout Worth the Wait? appeared first on The Motley Fool Canada.

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• Rates Are Rising Again, So Are GICs and High-Interest Savings ETFs Even Worth It?
• TD vs. Royal Bank: Which Dividend Stock Would I Buy With $10,000?
• Royal Bank Stock: What I’d Pay for a Dividend I Plan to Hold for Years
• The Bank of Canada Is Worried About Inflation: These 2 Stocks Might Not Be
• How to Use a TFSA to Generate an Average of $367 in Monthly Tax-Free Income

Fool contributor Puja Tayal has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Retirement continues to make Canadians anxious, with most fearing outliving their savings. Higher inflation and market volatility are adding to the anxiety as Canadians struggle to stay on track with retirement savings, according to the 2026 BlackRock survey. These concerns are valid, as many Canadians know that the Canada Pension Plan (CPP) and Old Age Security (OAS) alone probably won’t cover retirement.

Are CPP and OAS enough for a comfortable retirement?

The Canada Revenue Agency (CRA) has a formula to calculate your CPP and OAS payout. This payout is adjusted for inflation but can cover only a third of your retirement needs. While you cannot calculate your CPP payout if your retirement is decades away, you can make an educated guess about the percentage of expenses these benefits can cover.

As of January 2026, the maximum CPP payout is $1,507.65, but to earn it you must have been in a higher salary bracket and maxed out on CPP contributions for 40 years. This means you can either get the maximum CPP or the Guaranteed Income Supplement (GIS), which is for low-income earners. It is very rare to get both. OAS payout is also bound by taxable income, but you can get the maximum payout because of the high income threshold.

Based on the above logic, you can get anywhere between $2,200 and $2,700, rounding off figures to the lower range. But is this amount enough to retire?

The 2026 minimum tax bracket begins with annual income of $0 to $58,523. If you earn this amount, your monthly salary is $4,876.92, which is 47%–57% of what CPP, OAS, and GIS (if applicable) offer combined.

You can calculate your expenses or minimum monthly income you need to survive today and divide it by the retirement benefits to gauge the retirement gap.

How to fill the retirement gap

To fill the retirement gap, you need investments that can adjust to inflation and different life stages. This calls for a mix of future growth stocks and stable dividend growth stocks.

Growth stocks to adjust investments to your life stages

If you want a payout in the future, invest in futuristic stocks like Hut 8 Corporation (TSX: HUT) and Ballard Power Systems (TSX: BLDP). They are addressing major trends in power infrastructure for artificial intelligence (AI) data centres and hydrogen-powered fuel cells.

Hut 8 is building a gigawatt-capacity facility and has secured a 15-year lease that will generate cumulative base revenue of US$16.8 billion, which can go up to US$42.8 billion if used at maximum capacity. However, it will take time for these revenues to be realized. Till then, Hut 8 will shell out capital to build the power infrastructure. Its stock price rode the first round of the exponential AI rally of 800% from September 25, 2024 to September 25, 2026, as investor optimism around AI grew. The stock has almost halved since June 2026 as AI momentum slowed. If you are bullish about AI, you can buy this stock at the dip.

Another growth angle is alternative fuel. As countries fight for oil and gas, hydrogen can prove to be a strong alternative for transportation fuel and help reduce dependence on oil stocks. Ballard Power Systems has commercialized its hydrogen fuel cell technology and hired a professional management team to make it profitable and shareholder-friendly. It has yet to have its exponential growth moment. If you believe your kid will be driving a hydrogen car when he/she turns 20, Ballard Power Systems may likely give your investments that boost.

Dividend growth stocks to give inflation-adjusted passive income

While growth stocks can boost your investment toward your future reality, dividend growth stocks can silently build assured income. Royal Bank of Canada (TSX: RY) is a good option given its stable dividends and 24-year record of growing dividends at an average annual rate of 10%. The only two years it skipped growing dividends were 2009 and 2010 (Global Financial Crisis).

The post CPP and OAS Alone Probably Won’t Cover Retirement: How to Fill the Gap appeared first on The Motley Fool Canada.

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• The Bank of Canada Is Worried About Inflation: These 2 Stocks Might Not Be
• How to Use a TFSA to Generate an Average of $367 in Monthly Tax-Free Income

Fool contributor Puja Tayal has no position in any of the stocks mentioned. The Motley Fool recommends BlackRock. The Motley Fool has a disclosure policy.

The classic debate of which account to maximize, a Tax-Free Savings Account (TFSA) or Registered Retirement Savings Plan (RRSP), is never-ending. But the truth is, both TFSA and RRSP have a role to play in your portfolio depending on your financial situation. Financial products are prepared to fill gaps around financial needs. How you use these products depends on what gap you are trying to fill.

Why is RRSP not a good income engine

With passive-income investing, you are trying to fill a financial gap to help pay for daily expenses. You don’t want the Canada Revenue Agency (CRA) to take a large bite from that income. This makes an RRSP an inefficient income engine for two reasons.

First, RRSP withdrawals are subject to withholding tax, ranging from 10% for withdrawals up to $5,000 to 30% for withdrawals above $15,000. If your taxable income is above 30%, you pay additional tax during tax filing. If you withdraw $30,000 annually, you will receive $23,000 after tax. This excludes additional tax if you fall into the higher tax bracket.

Second, the RRSP amount once withdrawn cannot be reinvested. You permanently lose the RRSP contribution room, reducing your space for tax-free investment.

Why is a TFSA a good income engine

TFSA overcomes the RRSP barriers. It allows you to withdraw your money tax-free. A $30,000 TFSA withdrawal gives you $30,000 after tax.

The withdrawals from your TFSA are added back next year on January 1, although contribution room might be updated in February or March. For instance, if you withdraw $5,000 in 2025, your 2026 TFSA contribution room is the $7,000 new contribution limit for 2026 plus $5,000 from the 2025 TFSA withdrawals plus any unused contribution room.

The TFSA gives you another brownie point of tax-free withdrawals. The amount you withdraw need not be reported in your taxable income. This means the CRA retirement benefits calculated on your taxable income — Old Age Security (OAS) and Guaranteed Income Supplement (GIS) — are unaffected.

The above three reasons make TFSA an ideal instrument to build your passive-income portfolio.

Two TSX stocks to build your TFSA income portfolio

If you directly invest in dividend stocks, you will only get the yield. Your TFSA contribution room is limited, but you can increase it through portfolio rebalancing and reinvesting. Instead of investing the $7,000 TFSA contribution in a dividend stock, consider buying a growth stock like Celestica (TSX: CLS), which has the potential to double your money in two years on the back of an artificial intelligence (AI) rally. You can book profits by selling a portion of your holdings and reinvest that money in a high-growth dividend stock like Canadian Natural Resources (TSX: CNQ).

Celestica stock for growth

Celestica stock has already grown 745% over the last two years, and it has more room for growth as it expands its Enterprise segment into AI compute components. The previous growth was driven by Ethernet Switches used by hyperscalers and communications companies. The next leg of compute and storage devices would generate higher profits. It already has three hyperscaler customers, and the semiconductor industry is a small community where one contract attracts others.

The current 30% dip from its peak is an opportunity to buy and hold the stock for the next three to five years as Celestica rides the AI infrastructure wave.

Canadian Natural Resources for income

Canadian Natural Resources has a 3.74% dividend yield, but its key attraction is strong dividend growth history. It grows its dividend between 2% and 50% annually as the company embeds the dividend amount in the breakeven price. It has been aggressively buying oil sands reserves and using production output to pay off debt. Once net debt falls below $13 billion from the current $14.5 billion, it will use 100% of its free cash flow to buy back shares. A reduced share count will help the company accelerate dividend growth.

The post Why I Use My TFSA, Not My RRSP, as My Income Engine appeared first on The Motley Fool Canada.

More reading

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• Best TSX Dividend Stocks to Buy as Energy Prices Stay Hot
• 2 Canadian Dividend Stocks I’d Buy and Hold for Life
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Fool contributor Puja Tayal has no position in any of the stocks mentioned. The Motley Fool recommends Canadian Natural Resources and Celestica. The Motley Fool has a disclosure policy.

The Canada Revenue Agency (CRA) has set the annual contribution limit for the Tax-Free Savings Account (TFSA) at $7,000 for 2026. But you need not limit your contributions to just $7,000. The CRA’s contribution limit is the amount you can put in the TFSA from your working income. However, what you do inside the TFSA is purely a matter of your investment skill.

How to double your TFSA contributions

Let’s say you invest $7,000 in a stock that grows your money 20–30% to $8,400 or $9,400. This is not a hypothetical figure, but popular stocks like Bombardier, Enbridge, and Power Corporation of Canada have achieved these returns in the first half of 2026.

A 30% return in six months from Bombardier is lucrative and worth cashing out. You could consider selling shares worth $2,400, while keeping the $7,000 invested in Bombardier. This profit can be invested in other seasonal stocks, like Shopify (TSX: SHOP).

By doing this, you have increased your investment to $9,400 in 2026, without breaching the contribution limit. A word of caution. Frequent buying and selling of the same stock within a TFSA could attract the CRA’s attention if they feel it constitutes trading. Thus, avoid frequently rebalancing.

Another way to grow your TFSA contributions is by reinvesting dividends. Suppose you had bought 100 shares of Power Corporation of Canada a few years back. These shares will pay $267 in 2026 at a dividend per share of $2.67. You can reinvest this money to buy growth or dividend stocks.

This rebalancing and reinvesting help compound your returns. In a few years, compounding returns will match your TFSA contributions from working income. This dividend reinvestment may not attract CRA interest, as you are only buying shares. In trading, you both buy and sell shares.

A TFSA stock to buy if interest rates remain unchanged

Oil prices have dropped to pre-war levels as the market adjusts to the US-Iran war situation. In the first quarter, the RBC Consumer Spending tracker noted that Canadian household spending grew steadily despite high energy costs from the war. The cooling of oil prices could boost consumer spending.

Shopify would be a key beneficiary of increasing consumer spending. Now is a good time to invest in the stock, as a strong holiday season sale could push the stock up as much as 50%. This estimate is based on the stock’s past seasonal rally of 70% between August 2023 and February 2024 and 141% growth during the same period in 2024–2025.  

These were the years when the Bank of Canada paused interest rate hikes and began rate cuts in 2024. These were also the years when oil prices corrected after the Russia-Ukraine war, and Air Canada stock touched a $25 share price in peak seasons. The sharp correction in oil prices to US$69/barrel eases concerns of an interest rate hike. All these macro signals point to a strong holiday shopping season.

A TFSA stock to buy if the US-Iran war continues

The US and Iran are on a ceasefire at the time of writing. If the war escalates, Canadian energy stocks could once again see a rally. Canadian Natural Resources (TSX: CNQ) is a stock to buy in small amounts throughout the correction. Owning Canada’s largest oil sands reserves, it has a cost advantage and can sustain a US$50/barrel oil price. Considering the cyclical nature of oil prices, $45–$50 is the ideal entry point for CNQ stock as you can lock in a 5% yield.

If there is another energy shock, it will be a key beneficiary because of its low cost and slowly depleting oil sands reserves. During weak periods, the stock can pay dividends that you can reinvest in growth stocks. During a cyclical rally, you can book a profit and rebalance your portfolio. Moreover, you can enjoy annual dividend growth between 6% and 18%.

Final thoughts

Shopify and CNQ are perfect TFSA stock picks for rebalancing and reinvesting, thereby compounding returns.

The post How to Use Your Annual TFSA Room to Double Your Contributions appeared first on The Motley Fool Canada.

More reading

• Holiday Test Ahead: Shopify Forecasts Another 30%-Plus Quarter as Shoppers Gear Up
• How I’d Build a $250-a-Month Income Plan Without Chasing the Biggest Yields
• Best TSX Dividend Stocks to Buy as Energy Prices Stay Hot
• 2 Canadian Dividend Stocks I’d Buy and Hold for Life
• Enbridge vs. Canadian Natural: Where I’d Invest $15,000 for Income and Growth

The Motley Fool has positions in and recommends Shopify. The Motley Fool recommends Air Canada, Canadian Natural Resources, and Enbridge. The Motley Fool has a disclosure policy. Fool contributor Puja Tayal has no position in any of the stocks mentioned.

The U.S. is the world’s biggest stock market where many attractive dividend and growth stocks trade. From Micron Technology to Pfizer, you can get exposure to global leaders of various profit-making sectors. The Canada Revenue Agency (CRA) allows Canadians to buy US stocks trading on the Nasdaq and NYSE through the Tax-Free Savings Account (TFSA) and Registered Retirement Savings Plan (RRSP). However, the tax benefits of a TFSA come with fine print when holding US stocks.

The fine print of holding U.S. stocks in a TFSA

You can earn from a stock through capital appreciation or dividends. Both fall under different tax brackets. The Internal Revenue Service (IRS) taxes dividends as “Income from Other Sources”. When a non-resident American earns this income, the IRS imposes a 30% withholding tax before crediting the dividend to the beneficiary’s account. Thanks to the US-Canada tax treaty, Canadians face a 15% withholding tax provided they submit the necessary forms with their broker and claim the benefit.

The capital appreciation falls under capital gains tax. This tax is paid by the non-resident in their resident country. In Canada, TFSA investments are allowed to grow tax-free. Thus, if you hold US stocks in a TFSA, you are subject to the IRS’s 15% withholding tax on dividends but benefit from the CRA’s tax-free capital gain.

However, the IRS allows dividends to grow tax-free in an RRSP, as it is a retirement account.

The TFSA only accepts Canadian dollar values

Another fine print point to note for a TFSA holding US stocks is that all values have to be converted into Canadian dollars. The CRA determines TFSA contribution room in Canadian dollars, and even if you invest in US stocks, you have to ensure the investment does not exceed the Canadian dollar limit.

Non-residents cannot invest in a TFSA

Now, if you work in the United States and become a non-resident in Canada, because you stayed 183 days or more out of Canada in a tax year, you cannot invest in a TFSA. The TFSA benefit is only for Canadians. Any contributions made as a non-resident would attract a penalty of 1% per month. As a non-resident, you can’t even accrue new contribution room.

So be careful where you invest in US stocks and know your tax residency before investing through a TFSA.

How to get exposure to US stocks through a TFSA in a tax-efficient manner?

Navigating the fine print, a tax-efficient way to get exposure to US stocks in a TFSA is to buy Canadian Depository Receipts (CDRs) of US stocks. With CDRs, you can buy fractional shares of global tech companies on Canadian exchanges in Canadian dollars. CDRs remove the hassle of currency conversion and hedge your exposure to exchange rate fluctuations. Companies like Micron, SpaceX, and Broadcom have their CDRs listed on the TSX.

Another tax-efficient way to get US stock exposure is through US ETFs trading on the TSX and currency hedged. The iShares NASDAQ 100 Index ETF (CAD-Hedged) (TSX: XQQ) replicates the Nasdaq 100 Index and charges a minimal management fee of 0.35% annually. It calculates the fee on your total investment, irrespective of the performance. If you invest $10,000 in the first year, $35 is charged. If your investment grows to $20,000 in the third year, $70 is charged. This fee is not charged separately but is adjusted to your net asset value.

However, the XQQ ETF’s 39% year-to-date return and 20% average annual return in 10 years make the fee a drop in the ocean. In fact, it is a cost-efficient way to benefit from the artificial intelligence (AI) sector. All AI players trade on the Nasdaq, from AI chipmakers to AI application developers, and AI infrastructure providers. Nasdaq will not only capture the AI revolution but all future tech revolutions like self-driving cars, space travel, and robotics.

Investing tip

The TFSA is a great investment tool as it lets your money grow tax-free. A stock that can grow multiple-fold and help with wealth creation is best placed in a TFSA, as it can save you a significant amount in tax, especially if you fall under a higher tax bracket.

The post The Fine Print Most Canadians Miss When Holding U.S. Stocks in a TFSA appeared first on The Motley Fool Canada.

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Fool contributor Puja Tayal has no position in any of the stocks mentioned. The Motley Fool recommends Broadcom, Micron Technology, and Pfizer. The Motley Fool has a disclosure policy.

Every Canadian above 18 years of age can open a Tax-Free Savings Account (TFSA) and start investing in it. The tax benefits offered by a TFSA make it lucrative, as all the income and capital gains you get from investing is tax-free, whether you reinvest or withdraw. Despite knowing this benefit, many young Canadians are not using the TFSA efficiently because they find the rules confusing. Yes, a TFSA has certain rules that, if breached, incur a 1% monthly penalty. But that shouldn’t stop you, as a TFSA has the power to help you build a tax-free million-dollar portfolio.

Understanding TFSA rules around global investments

Firstly, understand that TFSA tax benefits are offered by the Canada Revenue Agency (CRA). When you invest in stocks in the United States and other countries, the tax rules of those countries apply. Considering the tax treaty Canada has with that country, the taxation rules will change. It’s not just with the TFSA but with all types of income you earn from a foreign country.

Let’s take the example of the United States, as it has the world’s two largest stock exchanges. The TFSA allows you to invest in stocks trading on the NYSE and NASDAQ.

Investing in US dividend stocks through a TFSA

The Internal Revenue Service (IRS) imposes a 15% withholding tax on dividends paid to non-residents under the US-Canada tax treaty. A 15% tax is the treaty benefit that you must claim by submitting Form W-8BEN with your broker. Otherwise, you will be charged a 30% withholding tax.

This tax makes US dividend stocks unattractive for a TFSA. You are simply wasting your contribution room, which you could otherwise invest in Canadian dividend stocks and get tax-free dividends.

However, some tech stocks, like Broadcom (NASDAQ: AVGO) and Nvidia, are good TFSA picks. Even though they pay dividends, their yield is less than 1%, and their key return potential is capital gains from stock price appreciation.

Broadcom’s US$2.60 annual dividend per share versus a US$100 stock price appreciation makes the 15% dividend withholding tax a drop in the ocean.

The sharp 21% dip in Broadcom in June is an opportunity to buy the dip. Almost all artificial intelligence (AI) stocks corrected in June after SpaceX debuted on the NASDAQ. Broadcom’s fundamentals driving the stock are still strong. There was a small hiccup as Broadcom retained its 2026 revenue outlook, while analysts were expecting the company to increase its outlook. However, revenue and profits are growing, and AI data centre investing is still at its peak.  

Capital gains from US stocks

While US dividends attract withholding tax, capital gains are exempt. That is because the IRS allows non-residents to pay tax on capital gains in their resident country. If capital gains are taxed as per the Canadian tax system, the CRA exempts all TFSA investments from taxes. So the US$100 capital appreciation in Broadcom year-to-date is tax-free if invested through a TFSA.

Thus, investing in US growth stocks through a TFSA can help you generate tax-free wealth. However, you have to be careful with the dollar amount you invest.

Convert TFSA global investments to Canadian dollars

Another layer of complexity with foreign stocks is the exchange rate. The CRA determines TFSA contribution room in Canadian dollars. Always convert your foreign stock investments to Canadian dollars to calculate your TFSA contribution room. Any over-contribution will attract a 1% penalty every month from the CRA until you withdraw the surplus.

Final takeaway

While global investments come with their own set of rules, they also bring strong returns. If investing in US stocks seems like a hassle, you can buy ETFs that invest in US stocks and hedge against the dollar rate. The iShares NASDAQ 100 Index ETF (CAD-Hedged) replicates the Nasdaq 100 index but trades on the TSX and gives returns in Canadian dollars.

You could also invest in US stocks through their Canadian Depositary Receipts (CDR), such as SpaceX CDR – (CAD Hedged). You get exposure to US stocks while skipping the tedious task of currency conversion.

The post The TFSA Rules Around Global Investments That Many Canadians Don’t Know About appeared first on The Motley Fool Canada.

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• How to Use a TFSA to Generate $200 in Monthly Tax-Free Income
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• How Much Would You Need to Invest in Enbridge to Average $200 a Month?
• Sun Life Stock Pays 3.3%: How Much to Invest for $100 a Month in Dividends

Fool contributor Puja Tayal has no position in any of the stocks mentioned. The Motley Fool recommends Broadcom and Nvidia. The Motley Fool has a disclosure policy.

What’s so special about age 45? It’s the age when you are growing rapidly in your career. You may have cleared your student loan and now have a mortgage. Many start a family or have children at this age. Some move to pursue their dream project. Each person is at a different stage of their life. But one thing common among all human beings at age 45 is that they are in the middle of their working life. They have worked for 20 years and may retire after 20 years, plus or minus five years.

Retirement planning at age 45

If you don’t start thinking about retirement now, you may not be able to catch up on retirement planning. A Registered Retirement Savings Plan (RRSP) is a crucial investment account because it can provide significant tax savings that you can convert into passive income.

RRSP allows you to contribute 18% of your previous year’s taxable income up to a maximum threshold (2026: $33,810). These contributions are tax-deductible.

For instance, you earn $200,000 in 2026. Your tax bill will be $42,315. You can save $9,347 in taxation by contributing the maximum amount of $33,810 to an RRSP.

Here’s how.

$33,810 RRSP contribution = $18,560 income (29% tax bracket) + $15,250 income (26% tax bracket)

Tax savings = $5,382.40 + $3,965

If you invest this $33,810 in dividend stocks and compound them by reinvesting dividends, you can grow your passive income pool tax-free.

About RRSP withdrawals

RRSP withdrawals are taxable at source. So, if you withdraw $5,000, your financial institution will pay you $4,500. The minimum federal tax rate is 14%. This doesn’t mean you won’t pay the balance tax. You will pay by adding the RRSP withdrawal to your taxable income and deducting withholding tax from your tax liability.

You can start withdrawing from your RRSP even at age 50 if you pay tax on it. It saves you from a 26% and 29% tax bracket and defers that money to the years when you are in the 20.5% or 14% tax bracket. So, if you have taken a career break or fallen sick, because of which your taxable income will be low, you could rely on your RRSP for passive income. You will pay tax, but at a lower rate.

Canadians’ RRSP balance by age 45

Statistics Canada’s 2023 RRSP data shows that Canadians in the 35-44 age group accumulated an average RRSP balance of $88,600. The average balance is much higher than the median of $33,000, hinting at unequal contributions.

A handful of Canadians are contributing way more than the majority, probably because they enjoy a higher tax benefit than the rest. The $33,810 RRSP contribution limit for 2026 can bring tax savings of up to $10,143 if you fall in the 30% tax bracket. These tax savings could be considered as an instant return on investment, and the dividend payouts as a bonus.

What should your retirement savings be?

What is the perfect RRSP balance for you is a strategic decision. When to invest, how much to invest, and when to withdraw from an RRSP should be planned strategically. Professional tax advisors use RRSPs to navigate taxes and maximize after-tax returns.

Do not take your RRSP balance lightly. The average balance should not be your benchmark for your RRSP balance. Your personal tax and finance situation will determine your ideal RRSP balance. Thus, stable dividend stocks like Enbridge (TSX: ENB) and Royal Bank of Canada are suitable for RRSPs. Enbridge has a low-risk business model and a less volatile stock. However, its stock price has been rising aggressively in the past six months as the company brings significant projects online in 2026 and 2027. That doesn’t affect its dividend growth as Enbridge maintains its payout ratio at 60–75%.  

The post How Much Canadians Usually Have in an RRSP by Age 45 appeared first on The Motley Fool Canada.

More reading

• How Much Would You Need to Invest in Enbridge to Average $200 a Month?
• How to Turn Your TFSA Into $1,000 a Month in Tax-Free Income
• 2 Top Canadian Dividend Stocks for $1,850 in Annual Passive Income
• TFSA Retirement Plan: 2 Dividend Stocks Paying Nearly 6% Annually for Tax-Free Passive Income
• Enbridge vs. TC Energy: Which Pipeline Stock Is the Better Buy Going Into 2027?

Fool contributor Puja Tayal has no position in any of the stocks mentioned. The Motley Fool recommends Enbridge. The Motley Fool has a disclosure policy.