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Discussion Starter #1
Hi,
I am 27, Single, Living in toronto.

Job : Software Developer, $80K right now (will be $90k by end of year) (no covid impact, have been given raise twice in last 4 months)
Assets :
  • Ongoing -Construction Condo next to TTC Subway - 15% down paid at 449K..Recent condo in adjacent building sold at 495k (20 days ago)...Thus, assuming $74k as net equity. (Ready in 2022)
  • RRSP - $7K (keeping this for Condo closing cost)
  • TFSA - $0 (liquidated all for paying 15% downpayment)
Liabilities : None

Emergency LOC : Tangerine LOC @ Prime + 1.5% Rate - $25k limit.

Monthly Budget..My monthly net income is around $5000 and expenses are around $1500. Thus, I can save $3500 per month.

Shall I start raking up my TFSAs accounts now ? What can I do better ?
 

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That is pretty good. Some ideas. You may want to contribute to both the TFSA and RRSP given you are in a high tax bracket . ($3,500 x 12 = $ 42,000) so $21k in each. Not sure what your unused TFSA room is but maybe that split until until you fill the TFSA up. Then the yearly limit thereafter.

For the RRSP, look at your tax brackets. You may want to only contribute enough to bring you down a couple of tax brackets. It may not be an adv to put $ in that put you into the lowest (15%) tax bracket. Then there is no real tax saving as this is the rate charged when you withdraw in retirement.

Here is an article on what ETFs to put in each account. Asset location: Where to hold investments for tax savings

Here is an article on general couch potato ETFs. Model Portfolios | Canadian Couch Potato
 

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One thing, I would not count on a LOC as an emergency fund. They can be taken away from you at any time at the whim of the bank.

Since some of your RRSP is designated for your condo, I assume you are aware of the HBP program and it's requirements?
 

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Discussion Starter #4
Thank you all for the suggestions. I will start making plan to contribute in my TFSA and RRSP. Also will start a small emergency savings account.
 

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Overall I think you're in a great spot, lightyears ahead of most for our age group living within the GTA.

If you're financially able to, I would suggest that you set up your future mortgage payment schedule to be the highest frequency possible (weekly or accelerated weekly as opposed to monthly) as this will help reduce your overall interest owed. Saving some $.

Other than that, all I could recommend would be the same as Joe Black which is to set aside a chunk of cash (3-6 months expenses) as an emergency fund. This way you're covered if anything were to happen and it gives you some freedom and peace of mind.
 

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Get your emergency fund together, for now it can be in your TFSA until you max it out.

Since you're younger, I'd max out TFSA and grow it, as any earnings will be tax free, not tax deferred, and not subject to OAS or other clawbacks.

Others have remarked you're in a high tax bracket, but for your career trajectory it is unlikely your tax bracket is going down, so for planning purposes consider your marginal tax rate as low as it's going to go, so again, contribute to TFSA first.
 
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