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U.S. Consumer Prices Rise in October, Slowing Progress Toward Low Inflation

  U.S. consumer prices increased as anticipated in October, reflecting a continued but modest rise in inflation. According to the latest data from the Labor Department, the Consumer Price Index (CPI) rose by 0.2% for the fourth consecutive month. Over the past year, the CPI has advanced by 2.6%, up from 2.4% in September. The core CPI, which excludes volatile food and energy prices, also saw a 0.3% increase in October, maintaining the same pace for the third month in a row. Annually, the core CPI has risen by 3.3%. Economists had predicted these figures, indicating that while inflation is not accelerating, the progress toward achieving the Federal Reserve’s target of 2% inflation has slowed. This trend suggests that the Federal Reserve may be less inclined to implement further interest rate cuts in the near future. The slight uptick in inflation is partly attributed to rising shelter costs, which accounted for more than half of the overall increase in prices. Despite the modest gains,

How to save taxes before the year ends: Tips for retirees

 

                                        

As the end of the year approaches, many retirees may be looking for ways to reduce their tax bill and keep more of their hard-earned money. Here are some tax planning ideas that may help:

1. Contribute to spousal RRSPs.  If you have a spouse who is in a lower tax bracket than you, you can contribute to their RRSP and claim a tax deduction for yourself. This can help to equalize your retirement income and lower your overall tax rate.

2.  Withdraw from less tax-efficient sources first.  If you have multiple sources of income, such as RRSPs, TFSAs, non-registered accounts, and pensions, you may want to withdraw from the ones that are taxed at higher rates first. For example, RRSP withdrawals are fully taxable, while TFSA withdrawals are tax-free.

3.  Earn tax-preferred investment income.  If you have non-registered investments, you may want to choose ones that generate income that is taxed at lower rates, such as dividends and capital gains. These types of income also qualify for tax credits and exemptions that can reduce your tax liability.

3.  Share your CPP/QPP benefits with your spouse. If you and your spouse are both receiving Canada Pension Plan (CPP) or Quebec Pension Plan (QPP) benefits, you can apply to split them based on your combined contributions. This can lower your taxes if one of you is in a higher tax bracket than the other.

4. Use a prescribed rate loan to income split.  If you have a spouse or adult child who is in a lower tax bracket than you, you can lend them money at the prescribed interest rate set by the CRA (currently 1%) and have them invest it in income-producing assets. You will only have to report the interest income on your tax return, while they will report the investment income on theirs.

5. Make use of surplus assets. If you have assets that you do not need for your retirement income, such as life insurance policies or annuities, you can use them to create a charitable legacy or provide for your heirs. You may be able to claim tax credits or deductions for donating or transferring these assets.

5. Bunch your charitable donations.  If you make charitable donations throughout the year, you may want to combine them into one larger donation before the year ends. This can increase your tax credit, as the federal credit rate is 15% on the first $200 of donations and 29% on the excess. You can also donate appreciated securities and avoid paying capital gains tax on them.


These are just some of the strategies that may help you save taxes before the year ends. However, every situation is different, so it is advisable to consult with your advisor or tax professional before implementing any of these ideas.



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