Your Financial Fall Clean-up: A 2024 Year-End Checklist

As October rolls around and we find ourselves in the final quarter of the year, it’s the perfect moment to take a step back and assess where you stand financially. With strong market returns bolstering portfolios, now is an ideal time to look at what you can do to make the most of the year’s momentum. Think of this as a “fall cleanup” for your finances — a chance to clear out any loose ends, strategize for tax savings, and make adjustments that can set you up for a successful start to 2025. Whether you’re looking to optimize your investments, revisit your retirement contributions, or plan for your upcoming large expenses, this checklist will guide you through the key actions to help you finish the year with confidence and a plan.

1. Realize Capital Losses to Offset Your Gains
If you’ve had successful investments this year in taxable accounts, consider selling underperforming assets to create capital losses that can offset your capital gains. The concept of selling investments at a loss to account for capital gains is known as “tax loss harvesting”, and it can lower your overall tax bill for 2024. Capital losses created this year can be carried back 3 years and carried forward indefinitely.

Important Note: Watch out for the superficial loss rule, which prevents you from claiming a loss if you or someone affiliated with you repurchases the same asset within 30 days before or after selling it. Please note this does not constitute tax advice, consulting with a tax professional can help you make the best choice.

2. Explore Income Splitting Opportunities
Transferring income to a family member in a lower tax bracket can help reduce your overall household tax burden. Spousal RRSPs and pension income splitting are some common and effective options.

Important Note: Remember that income splitting rules vary depending on the type of income and the relationship to the recipient. Please note this does not constitute tax advice, consulting with a tax professional can help you make the best choice.

3. Contribute Early to Your RRSP
While the deadline for RRSP contributions for the 2024 tax year isn’t until March 2025, making your contributions now allows more time for tax-deferred growth. You also have the flexibility to defer deductions to future years when you might have higher taxable income.

Important Note: If you’re nearing 71, remember that you’ll need to convert your RRSP by the end of the year, so make any final contributions well in advance.

4. Maximize RESP Contributions
Contributing to a Registered Education Savings Plan (RESP) before year-end allows you to maximize the Canada Education Savings Grant (CESG). For every dollar you contribute, you can receive up to 20% in government matching, up to a certain limit.

Important Note: Contribution limits and grant eligibility vary by child and year, so double-check the rules to make the most of your contributions.

5. Convert Your RRSP if You’re 71
If you’re turning 71 this year, you have until December 31 to convert your RRSP to a RRIF or annuity. This conversion is required by law, so make sure to complete it before year-end to avoid penalties.

Important Note: Cassi will be in touch to help you with the RRIF conversion process. You won’t be able to contribute to an RRSP after conversion, so make any final contributions by the end of December.

6. Review Asset Location for Tax Efficiency
If you have interest-bearing investments in a non-registered account, consider moving them to a tax-sheltered account like a TFSA or RRSP if there is room available. By relocating higher-tax investments to accounts where they can grow tax-free or tax-deferred, you may lower your overall tax bill.

Important Note: This is an opportunity to review all your investments and consider a tax-efficient approach that aligns with your risk tolerance and financial goals.

7. Plan TFSA Withdrawals
If you plan to make any withdrawals from your Tax-Free Savings Account (TFSA), do so before the end of the year. This ensures that your contribution room resets at the start of 2025, allowing you to reinvest next year without waiting for room to open.

Important Note: Keep in mind that if you withdraw funds in January 2025, you won’t regain that room until 2026.

Final Thoughts

As you approach the end of the year, taking a few proactive steps now can have a significant impact on your financial future. By thoughtfully planning around your investments, tax
strategies and retirement accounts, you’re setting yourself up for a strong start in 2025. These actions aren’t just about closing out this year—they’re about building a sustainable path for the years to come. If you’re ready to take control of your year-end planning but aren’t sure where to start, reach out to us. We’re here to help you navigate these important decisions and tailor a strategy that aligns with your goals. Happy planning and speak with you soon!