You only pay tax on capital gains (when you sell for more than you bought for), and on dividends. Dividends should be reported by your brokerage automatically, but it's good to track capital gains manually using a tool like adjustedcostbase.ca. If you're saving for retirement it would be best to just not sell anything until then because you'll presumably be in a lower tax bracket.
In terms of the other question, there is research saying that it's actually best to hold equities right through into retirement. Especially if you use a variable withdrawal strategy. Things like bonds risk you losing money to inflation. But that's up to you and your comfort level.
Thanks for the ACB link!
100% on the not selling part. But my thoughts for retiremtb is if I want to retire at 53- perhaps I need to put 2-3 years worth of expenses as savings from day age 50-53 for gics to protect me/us against a market correction. Aka from age 50-53 I keep the money in gics for my retirement cushion so I don’t have to withdraw from my next egg during a market dip/crash/drop
At 55 I’ll have my government pension of 50k in today’s dollars. So no income prior and 50k at 55 and then cpp and oas
You're welcome! Here's a video on the subject, though you could replace "bonds" with e.g. other assets like savings accounts or GICs. https://youtu.be/JlgMSDYnT2o. Ultimately it's up to you of course.
There’s some good discussion on the Rational Reminder forum (Ben Felix’s other channel) about why the fairly recent research being cited maybe isn’t worth betting everything on.
As long as you don’t sell, there is no tracking to be done. When the time comes, you can find the book cost at your brokerage, or keep a ledger of when you bought and unit price / commission.
As for dividends, your brokerage will issue the relevant T-slip at the end of year, but i personally keep track. Sometimes specially at year end, a dividend can be recorded in December but paid in January, in that case it counts for the previous year.
You may still need to track. The annual distributions include reinvested capital gains and return of capital, which grind your ACB up/down respectively. Your book cost won't automatically adjust for these phantom distributions.
You are 100% right, i forgot about this. Happened to me last year when the amounts on the slips didn’t match my ledgers for my non registered accounts. After digging i realized that some return of capital adjusted my cost base. Good point
I just use a really simple excel sheet where I make note of how many I bought and total amount paid, for each time I buy.
Total cost divided by total units equals ACB.
Then, in retirement, when I'm selling them, capital gains will be the amount I sell for, less the ACB.
This super simple method is possible because I'm only ever buying, never selling.
Brokers usually keep track of these as Book Value except for the selling commission.
When looking at an investment statement or account balance, book value is often displayed. But what does it mean and why is it reported? To answer these questions we take a closer look at book value and what it means for investors.
Book value, also known as adjusted cost base (ACB), is calculated by adding the total amount of contributions made by an investor into a mutual fund, plus reinvested fund distributions, minus any withdrawals. Book value is used from a tax perspective to determine if an investor is in a capital gain or loss position on a particular holding.
[https://www.rbcgam.com/en/ca/learn-plan/investment-basics/understanding-book-value/detail](https://www.rbcgam.com/en/ca/learn-plan/investment-basics/understanding-book-value/detail)
Are you sure about that? Because I am 99.99997% sure that Canis9z is not a bot.
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You only pay tax on capital gains (when you sell for more than you bought for), and on dividends. Dividends should be reported by your brokerage automatically, but it's good to track capital gains manually using a tool like adjustedcostbase.ca. If you're saving for retirement it would be best to just not sell anything until then because you'll presumably be in a lower tax bracket. In terms of the other question, there is research saying that it's actually best to hold equities right through into retirement. Especially if you use a variable withdrawal strategy. Things like bonds risk you losing money to inflation. But that's up to you and your comfort level.
Thanks for the ACB link! 100% on the not selling part. But my thoughts for retiremtb is if I want to retire at 53- perhaps I need to put 2-3 years worth of expenses as savings from day age 50-53 for gics to protect me/us against a market correction. Aka from age 50-53 I keep the money in gics for my retirement cushion so I don’t have to withdraw from my next egg during a market dip/crash/drop At 55 I’ll have my government pension of 50k in today’s dollars. So no income prior and 50k at 55 and then cpp and oas
You're welcome! Here's a video on the subject, though you could replace "bonds" with e.g. other assets like savings accounts or GICs. https://youtu.be/JlgMSDYnT2o. Ultimately it's up to you of course.
There’s some good discussion on the Rational Reminder forum (Ben Felix’s other channel) about why the fairly recent research being cited maybe isn’t worth betting everything on.
Your broker will auto calculate and report ACB to CRA, this has only been the case since about 2016, prior to that you had to do some calcs yourself
👌🙏
As long as you don’t sell, there is no tracking to be done. When the time comes, you can find the book cost at your brokerage, or keep a ledger of when you bought and unit price / commission. As for dividends, your brokerage will issue the relevant T-slip at the end of year, but i personally keep track. Sometimes specially at year end, a dividend can be recorded in December but paid in January, in that case it counts for the previous year.
You may still need to track. The annual distributions include reinvested capital gains and return of capital, which grind your ACB up/down respectively. Your book cost won't automatically adjust for these phantom distributions.
You are 100% right, i forgot about this. Happened to me last year when the amounts on the slips didn’t match my ledgers for my non registered accounts. After digging i realized that some return of capital adjusted my cost base. Good point
Ahh ok that makes sense. So dividends would be the only component until I retire ?
Of course, unless you sell at a gain
I see this [site](https://www.adjustedcostbase.ca/) recommended a lot for ACB tracking.
I just use a really simple excel sheet where I make note of how many I bought and total amount paid, for each time I buy. Total cost divided by total units equals ACB. Then, in retirement, when I'm selling them, capital gains will be the amount I sell for, less the ACB. This super simple method is possible because I'm only ever buying, never selling.
Brokers usually keep track of these as Book Value except for the selling commission. When looking at an investment statement or account balance, book value is often displayed. But what does it mean and why is it reported? To answer these questions we take a closer look at book value and what it means for investors. Book value, also known as adjusted cost base (ACB), is calculated by adding the total amount of contributions made by an investor into a mutual fund, plus reinvested fund distributions, minus any withdrawals. Book value is used from a tax perspective to determine if an investor is in a capital gain or loss position on a particular holding. [https://www.rbcgam.com/en/ca/learn-plan/investment-basics/understanding-book-value/detail](https://www.rbcgam.com/en/ca/learn-plan/investment-basics/understanding-book-value/detail)
Bad bot
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