2022 was a year of ups and downs. High inflation and rising interest rates resulted in challenging financial situations for many Canadians. As 2022 ends and 2023 begins, we recommend reviewing your financial situation with help from your Edward Jones advisor and this year-end checklist.

1. Reflect on your priorities and progress

Review your current situation. Where are you on your financial journey? Have rising prices or larger interest payments affected your spending this year? Review your budget to ensure your spending aligns with your goals.

2. Prepare for emergencies

We recommend having three to six months of living expenses available for emergencies. If you aren’t there yet, start with at least one month of living expenses and build from there. Review your insurance coverage with your advisor to ensure it meets your needs and contact your lawyer to create or update your Will and powers of attorney.

3. Maximize contributions

Consider making additional contributions to your RRSP for 2022 if you have contribution room available. The deadline for 2022 contributions is March 1, 2023.

The new year also means new Tax-Free Savings Account (TFSA) contribution room. The 2023 TFSA limit is $6,500, so be sure to take advantage of the tax-free growth opportunity as early as possible.

If you are saving for a family member’s education and have not maximized the Canada Education Savings Grant (CESG) for 2022, contribute up to $2,500 per child to a Registered Education Savings Plan (RESP) before December 31st. You may be able to catch-up on missed CESG from previous years as well, depending on the age of the beneficiary.

4. RRIF reminder

If you turned 71 in 2022, your RRSP matures on December 31 this year. You must convert your RRSP to a Registered Retirement Income Fund (RRIF), purchase an annuity, or withdraw your entire RRSP as taxable income before year-end. Discuss these options with your advisor.

5. Talk taxes with your tax professional

Depending on your tax situation, harvesting losses from your investments may help you save tax in the current year, get tax back that you paid in a previous year, or create losses to carry forward to a future year.

If you have a prescribed rate spousal loan, it is important to note that the annual interest payment for 2022 must be made by January 30, 2023, otherwise attribution rules will apply.

Discuss these details with your tax professional to determine if any steps should be taken before the end of the year.

6. Perform a portfolio check-up:

Given this year’s market volatility, your portfolio might need adjustments to ensure it is still aligned with your goals. This could include:

• A self-assessment: Your investment portfolio should be designed for your specific goals, time horizon and risk tolerance. Review your investor profile to ensure your information is accurate and your portfolio is properly tailored to your individual circumstances.
• Regain your balance: Market fluctuations can cause your portfolio to drift from intended allocations. Your portfolio was designed with your goals in mind; rebalancing back to your target mix can help keep your portfolio on track with your long-term strategy.

If your investments are held in a non-registered account, discuss potential tax implications of rebalancing with your advisor, particularly if you are selling from one investment to reinvest in another, or purchasing a mutual fund or ETF that has annual distributions late in the year.

Talk to your Edward Jones advisor today about important steps you can take before the end of the year.

This article was written by Edward Jones for use by your local Edward Jones Financial Advisor, Nicolle Lalonde.