Insights & News

Pinkney Financial Services


This page includes a series of questions that are commonly asked by customers and cover topics including services such as: Investments & Savings, Retirement & Pensions, Business & Benefits, and Insurance.

Frequently Asked Questions (FAQ)

Investments & Savings

  • Parents, grandparents, legal guardians, and other family members can open a RESP for a child.
  • The child must have a valid Social Insurance Number (SIN) to open a RESP.
  • If your child decides not to pursue higher education, you have a few options.
    • You can transfer the funds to another eligible beneficiary.
    • You can choose to collapse the plan and withdraw the contributions (without any CESG or investment income) or transfer the funds to your RRSP (Registered Retirement Savings Plan) if you have enough contribution room.
  • Yes, you can contribute more than the maximum CESG amount, but additional contributions will not attract any government grants.
  • If your child receives a scholarship, you can withdraw the scholarship amount from the RESP without any CESG repayment requirements. However, you will have to pay taxes on the investment income portion of the withdrawal.
  • There is no annual contribution limit for a RESP. However, there is a lifetime maximum contribution limit of $50,000 per beneficiary.  
  • To maximize the annual CESG grant of $500, it is recommended that an invidual contributes up to $2,500 to the RESP per beneficiary per year.
  • A mutual fund is an investment product offered by an investment company that pools contributions from investors and invests them into various securities such as stocks, bonds, and money market instruments. Mutual funds provide investors with access to a professionally managed and diversified portfolio of securities at a relatively low cost.
  • On the other hand, a seg fund is an insurance product is an insurance product offered by insurance companies that is similar to a mutual fund. These pooled investments provide unique estate planning options, including guarantees, settlement options, simplified tax reporting, and estate bypass. Seg funds offer additional benefits such as potential creditor protection and guarantees on a portion of the invested capital.
  • In summary, while both mutual funds and seg funds involve pooling investments and investing them into a variety of securities, seg funds are specifically offered by insurance companies and come with additional features and benefits, primarily focused on estate planning and potential protection.

Investments held in a registered plan; tax applies on revenues generated by the investment are deferred until the year in which the investment is sold or withdrawn which is typically later in retirement years at a lower tax bracket with proper tax planning. However, for investments not held in registered plans taxpayers are required to report income on an annual basis.

There are three different forms of revenues that can be generated, and each is taxed differently.

  • Interest income is generated by fixed-income securities,
  • dividends are generated by preferred shares and some common shares held in the fund,
  • capital gains are generated when the mutual fund, Segregated fund or security held by the funds sell for more that its cost (selling price higher than the cost price).
  • A RRSP, also known as a registered retirement savings plan, is a financial tool designed to help individuals save for retirement and effectively plan for their future. It offers various benefits such as the opportunity to enhance retirement planning, split retirement income with a spouse, or reduce annual taxes. People can contribute to an RRSP through different strategies, with lump-sum deposits or preauthorized contribution plans (PAC) being the most common methods for new investors. By contributing to an RRSP, individuals can enjoy advantages such as reducing their annual taxable income, allowing their funds to grow and compound earnings on a tax-free basis until withdrawal during retirement. Additionally, RRSPs provide the advantage of deferring income tax payment until later years when the individual may potentially be in a lower tax bracket. Couples can also utilize spousal RRSPs to split retirement income, resulting in lower taxation on their combined income. Furthermore, individuals can claim up to $2,000 in pension tax credits through their RRSP contributions.”
  • A tax-free savings account is a government-sponsored savings plan that allows individuals to earn investment income without incurring any taxes. Interestingly, you can preserve the tax-free status of your TFSA by designating your spouse or common-law partner as the successor account holder or arranging for a transfer of the TFSA assets to your spouse upon your death.
  • The name itself says it all: Tax-Free Savings Account. And it’s absolutely accurate that as long as you adhere to the account rules, you won’t face any taxes on your investments within a TFSA. Nevertheless, it’s important to note that there are instances where you can incur taxes within a TFSA, primarily by violating the account’s regulations. Below are three scenarios that can result in taxation of TFSA investments.
    • The most common way to get taxed on TFSA investments is to contribute too much to your account. Every Canadian has a maximum amount of money they can contribute to a TFSA. If you were 18 or older in 2009, your maximum is 88,000. If you’ve already made contributions, subtract them from $88,000 to get your remaining space. If you were younger than 18 in 2009, you’ll have an amount that depends on the contribution room added during your adult life.
    • If you contribute more to your TFSA than you are allowed to, you’ll pay a 1% per month tax on the excess amount. Let’s say that your maximum is $88,000 and you contribute $89,000, putting you $1,000 above your limit. In this scenario, you’d be assessed a $10-per-month tax on that $1,000 as long as it remains in the account.
    • An additional manner in which you may be subject to taxation within a TFSA is through engaging in day trading. If you consistently generate substantial profits by frequently trading within your TFSA, the Canada Revenue Agency (CRA) might determine that you are operating a business and apply appropriate taxes accordingly.

GIC rates can vary widely based on the term of the GIC, the financial institution, and the prevailing economic conditions.

To find the highest GIC or GIO rates in Canada, follow these steps:

  • Research Online: Check the websites of major Canadian banks, insurance companies, and other financial institutions. They often provide information about their current GIC or GIO rates.
  • Visit Financial institution: Visit the branch to inquire about their GIC or GIO rates. Sometimes, financial institutions offer special promotional rates that may not be listed online.
  • Contact Financial Advisors: If you have a financial advisor, they might be able to provide insights.
  • Use Online Comparison Tools: There are various online tools and websites that allow you to compare GIC rates.
  • Research reputable online banks and financial institutions that offer GICs or GIO’s. Regional or Community focused financial institutions might have competitive offerings.
  • Keep an Eye on Specials: Financial institutions occasionally run promotional offers with higher-than-average GIC rates. These may be limited-time offers, so it’s worth keeping an eye out.
  • Consider Different Terms: GIC rates can vary based on the term length. Short-term GICs might offer lower rates than longer-term ones. Evaluate the terms that suit your financial goals.
  • Read the Fine Print: While seeking the highest rates, ensure the investor understand the terms, conditions, and penalties associated with the GIC. Some high-rate GICs might have stricter withdrawal conditions.

Remember that while GIC rates are an important factor, consider other aspects such as the institution’s reputation, customer service, and ease of access to your funds or their current GIC rates.

  • Yes! Contact the office today to determine if there is a suitable investment to meet individual financial goals  
  • Phone number (780) 743-4368

Retirement & Pensions

  • A DB plan is an employer-sponsored pension plan where the eventual pension benefits can be determined with a reasonable degree of accuracy. These benefits are typically calculated based on a percentage of the employee’s salary and often take into account the number of years of service. In other words, employees have a predetermined formula that determines the amount they will receive in retirement. The responsibility for funding and managing the plan lies primarily with the employer.
  • On the other hand, a DC plan is an employer-sponsored pension plan where the eventual pension benefits cannot be determined in advance. The benefits received by the employee depend on the performance of the investments made with the contributions over the years. In a DC plan, both the employee and the employer make contributions to the plan, usually based on a fixed percentage of the employee’s salary. The employee is responsible for managing their own investments within the plan or selecting from a range of investment options offered by the plan.
  • In summary, the main difference between a DB plan and a DC plan lies in how the pension benefits are determined. In a DB plan, the benefits are predetermined based on a formula, while in a DC plan, the benefits are dependent on the investment performance of the contributions made.

Some general ideas on how an individual might consider investing retirement money in Canada are:

  1. Diversification: Consider diversifying your investments across different asset classes such as stocks, bonds, and real estate. Diversification can help manage risk and balance potential returns.

  2. Registered Retirement Savings Plan (RRSP): A RRSP is a tax-advantaged account designed for retirement savings. Contributions to an RRSP can be deducted from your taxable income, which can provide an individual with a tax refund. Investments within the RRSP grow tax-free until withdrawal, at which point they are taxed as income. This can be especially beneficial if you expect to be in a lower tax bracket during retirement.

  3. Tax-Free Savings Account (TFSA): A TFSA allows you to invest after-tax money, and any growth and withdrawals are generally tax-free. TFSAs are more flexible than RRSPs since withdrawals don’t affect your taxable income and can be made at any time without penalty.

  4. Professional Advice: Consider working with a certified financial advisor who can help you create a customized retirement investment plan based on your risk tolerance, time horizon, and financial goals.

  5. Risk Tolerance: Assess risk tolerance and choose investments that align with an invididuals comfort level. As an individual nears retirement, you might want to gradually shift your investments toward more conservative options to reduce the potential impact of market volatility.

  6. Low-Cost Investments: Look for investment options with low fees, as high fees can diminish returns over time.

  7. Long-Term Perspective: Investing for retirement is a long-term endeavor. Avoid making emotional decisions based on short-term market fluctuations.

  8. Review and Adjust: Regularly review the investment portfolio and make adjustments as needed based on changes in an individuals financial situation, market conditions, and retirement goals.

  9. Consider Annuities: In retirement, consider purchasing an annuity through insurance companies, which provides a steady stream of income for life. Annuities can help ensure  consistent income even if other investments experience fluctuations.

  10. Estate Planning: As an individual plans investments, consider how this aligns with estate planning goals, such as passing on wealth to beneficiaries or charitable organizations.

Investing involves risks, and there’s no one-size-fits-all solution.  Personal circumstances, risk tolerance, and goals will play a important role in determining the best way to invest retirement funds.

When it comes to investing for retirement in Canada, there are several professionals and resources an individual may consider:

  1. Financial Advisor: A licensed financial advisor can provide personalized advice based on financial situation, goals, and risk tolerance. They can help create a retirement investment strategy tailored to individual needs.

  2. Certified Financial Planner (CFP): A CFP is a professional with expertise in various aspects of financial planning, including retirement planning. They can provide comprehensive advice on investments, tax planning, estate planning, and more.

  3. Investment Advisor: An investment advisor specializes in managing investment portfolios. They can help select appropriate investment products based on retirement goals and risk tolerance.

  4. Registered Retirement Savings Plan (RRSP) Provider: If an individual is considering an RRSP for retirement savings, the financial institution where you hold a RRSP can offer guidance on investment options available within the plan.

  5. Online Brokerages: There are several online brokerage platforms in Canada that offer a variety of investment options, including stocks, bonds, mutual funds, and exchange-traded funds (ETFs). These platforms often provide research tools and educational resources to help you make informed investment decisions.

  6. Government Resources: The Government of Canada provides information about retirement planning, including the Canada Pension Plan (CPP), Old Age Security (OAS), and other retirement benefits.

  7. Seminars and Workshops: Many financial institutions and organizations offer seminars and workshops on retirement planning and investing. These can be informative ways to learn about different investment strategies and retirement planning techniques.

  8. Personal Research: It’s important to do research to understand different investment options, associated risks, and potential returns. This will help with more meaningful conversations with professionals to make informed decisions.

Investing involves risks, and there’s no one-size-fits-all solution.  Personal circumstances, risk tolerance, and goals will play a important role in determining the best way to invest retirement funds.

Business & Benefits

  • Yes, business owners need to consider estate planning to ensure the smooth transition of their business and assets in the event of their death or incapacity. Here are some key aspects that business owners should address:
    • Succession Planning: This involves developing a tax-efficient strategy for passing the business to family members or chosen successors. It’s important to determine eligibility for the lifetime capital gains exemption and explore options such as an estate freeze.
    • Shareholder Agreement: If there are multiple shareholders, having a well-drafted shareholder agreement is crucial. This agreement should outline the steps for business transition in the event of a shareholder’s death, critical illness, or other circumstances, in order to prevent disputes and ensure a smooth transition.
    • Business-Owned Life Insurance: Obtaining life insurance on the shareholders or key individuals in the business can provide financial security. In the event of a shareholder’s death, the insurance proceeds can be used to continue operating the business or cover any taxes owed by the business during ownership transitions.
    • Power of Attorney: It is advisable for business owners to have a separate power of attorney specifically for making business decisions on their behalf. This allows a trusted individual to act with business judgment and make important decisions in case the owner becomes incapacitated.
    • Creditor Protection Strategy: Implementing a strategy to safeguard excess corporate profits from unexpected creditors is essential. This involves moving those profits out of the operating company to protect them in case of unforeseen liabilities.

In summary, estate planning is essential for business owners, and it encompasses various considerations such as succession planning, shareholder agreements, life insurance, power of attorney, and creditor protection strategies. These measures help ensure a seamless transition and protect the interests of both the business and the owner’s family or chosen successors.

  • If the Employer purchases the RRSP and it goes directly into the employees RRSP, you do not have to withhold taxes.
  • There is a way to maximize your RRSP contribution. You can request that your employer contribute all or a portion of your bonus or lump sum payment directly to your RRSP or your spouse’s RRSP as a spousal contribution. If your employer makes this RRSP contribution directly, the requirement to withhold income tax on that amount is eliminated, if certain conditions (mentioned later) are met. The benefit of transferring the amount directly without withholding tax is that you can then invest the full amount, rather than the net after-tax amount, in your RRSP.
  • Remind employees that if you do this, don’t expect a refund in April from the RRSP’s, but this is a great way to maximize the contribution.

Here is information from the Canada Revenue Agency:



  • Many individuals are uncertain about the appropriate amount of coverage they should have to protect their loved ones financially in the event of their death. Factors such as family size, income, debts, future expenses (e.g., mortgage, education), and desired lifestyle are typically considered when determining the appropriate coverage amount. Insurance advisors can help individuals assess their needs and recommend suitable coverage options.
  • Life insurance in Canada is a contract between an individual (the policyholder) and an insurance company, where the insurance company agrees to pay a predetermined sum of money to the policyholder’s beneficiaries upon the policyholder’s death. It is a financial tool designed to provide financial protection and support to the policyholder’s loved ones in the event of their death.
  • Here are some reasons why someone might need life insurance:
    • Income Replacement: If you have dependents, such as a spouse, children, or aging parents, who rely on your income to maintain their quality of life, life insurance can provide a replacement income stream to support them after you’re gone.
    • Debt Repayment: If you have outstanding debts like a mortgage, personal loans, or credit card debts, life insurance can help cover these financial obligations so that your loved ones aren’t burdened with them.
    • Funeral Expenses: Funerals can be expensive, and life insurance can help cover the costs associated with funeral arrangements, burial or cremation, and other related expenses.
    • Education Expenses: If you have children or dependents who plan to pursue higher education, life insurance can be used to fund their educational expenses, ensuring that their future educational needs are taken care of.
    • Estate Planning: Life insurance can be a valuable tool in estate planning. It can provide funds to cover estate taxes, probate fees, and other costs associated with transferring your assets to your beneficiaries.
    • Business Continuity: If you own a business, life insurance can help ensure its continuity by providing funds to cover debts, buy out a deceased partner’s shares, or facilitate the smooth transition of ownership.
    • Charitable Contributions: Life insurance can also be used to make charitable contributions or leave a legacy by naming a charitable organization as the beneficiary of the policy.
  • It’s important to note that the need for life insurance varies from person to person. Factors such as age, marital status, dependents, financial obligations, and future goals should be considered when determining the appropriate amount and type of life insurance coverage for an individual’s specific needs. Consulting with a financial advisor or an insurance professional can help you assess your requirements and make informed decisions about life insurance.
  • The general rule is that proceeds from a life insurance policy are not taxable. The death benefit paid out to the beneficiary upon the death of the insured person is typically tax-free. This means that the beneficiary does not have to report the life insurance proceeds as income on their personal tax return, and they do not owe any tax on the amount received.
  • However, there are a few exceptions where life insurance proceeds may be subject to taxation in Canada:
    • Transfer of policy ownership: If the policy owner transfers ownership of the policy to another person for consideration (i.e., for a price or other valuable consideration), any proceeds received upon the insured person’s death may be subject to taxation.
    • Estate taxes: In some cases, when the insured person’s estate is subject to estate taxes, the life insurance proceeds may be included in the calculation of the estate’s value and be subject to taxation. This depends on the size and nature of the estate and the specific tax rules in effect.
    • Policy assignment for value: If the policy has been assigned for consideration, meaning that it has been sold or assigned as collateral for a loan, the tax treatment of the proceeds may vary depending on the specific circumstances. In such cases, it is advisable to consult with a tax professional to determine the tax implications.
  • Yes! Contact the office today to determine if there is a suitable life insurance product to meet individual financial goals  
  • Phone number (780) 743-4368

In The News

Business Lifetime Achievement Award

In October 2022, Wayne Pinkney received the Business Lifetime Achievement Award from the Fort McMurray Chamber of Commerce for his Financial Services provided to the community.

Watch for our Pinkney Financial Services Updates

Kristi Pinkney-Hines (daughter left), Wayne Pinkney (centre), and his wife Patricia (right)

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Phone: 780-743-4368