Here is a brief summary of what each spreadsheet attempts to demonstrate:
Constant After Tax Income - Perhaps you’re thinking of the future and how much income you will need in retirement. Wouldn’t it be nice to figure out how much your nest egg will provide for you? This calculator takes into account capital gains taxes (for non-registered portfolios), marginal tax rate and even the inflation rate to give you a constant, inflation-protected stream for as many years as you input.
If, on the other hand, you have an idea how much after tax income you will need in the future and are looking to figure out the size of the nest egg you’ll need to accumulate, this calculator will figure that out, too.
Fixed Rate Mortgage vs Variable - Are you currently in a fixed rate mortgage and wondering if converting to a variable rate mortgage might be better for you? This calculator takes into account any penalty for breaking the mortgage early and allows you to adjust the interest rates during the term up to 5 times. This represents the fluctuating nature of the Bank of Canada prime rate which will impact your variable mortgage rate.
Loan Comparison Calculator - There are different types of loans out there: non-deductible compounding monthly (e.g. car loan), deductible compounding monthly (e.g. borrowing from a HELOC to invest), non-deductible compounding semi-annually (e.g. Canadian mortgage) and deductible compounding semi-annually (don’t know where you would find that, but it’s included anyway). Some loans you pay down the principal and interest (like a car loan or mortgage) while others you may choose only to pay the interest (e.g. a HELOC used to fund investments).
This calculator was born out of my musings of the Smith Manoeuvre and the resultant deductible HELOC that is left at the end. I wondered how that would compare to a traditional, non-deductible loan in today’s dollars vs. a deductible loan in future dollars. That is why you will also see inflation factored in.
In addition, there has been talk about Manulife’s M1 product. I’ve come up with a calculator that allows you to compare mortgages with M1 including their monthly fee and I’ve been about as generous as I can with the M1. For the most part, the M1 product was offered at a higher rate than a typical person could easily get at any large FI in Canada. The recent economic crisis (late 2008) has changed that but this could be temporary.
RESP Calculator - We all know about the magic of compounding so if you can get more money invested sooner, rather than later, it has more time to grow and grow. But, with RESP’s the government has limited the amount they will kick in (via the CESG) not only over the lifetime of an RESP but also per year. We can’t forget that many people don’t have thousands of dollars lying around to jump start an RESP and it is clear to see that most people contribute a modest amount each year.
For those of you that want to see what would happen if you could make 1 big contribution up front and whether or not your child(ren) could have more money for post secondary education, this calculator may be able to help.
This calculator will allow for future proofing if the government extends the maximum lifetime contribution, the CESG grant or even the annual contribution limits after which no more CESG money is kicked in.
RRSP Meltdown Calculator - If you’ve ever heard claims about how you can withdraw money from your RRSP tax free then it likely concerns borrowing to invest.
The idea is that you borrow an amount of money to invest that meets the CRA’s deductibility criteria. You then pay the interest on the investment loan with money that you withdraw from your RRSP. Since the RRSP income and the investment loan deductions both cancel each other out whatever your marginal tax rate, you end up funding your investment loan with your RRSP.
There are some schools of thought that this could be worthwhile to look into before you retire, especially if you have a lot of money tied up in your RRSP but nothing in TFSA’s or non-registered accounts. The idea being that when you convert your RRSP to a RRIF you will be forced to withdraw at the government’s pace and the income will be taxed most unfavourably. If, however, you had more money in TFSA’s and non-registered accounts, you not only would achieve better tax efficiency, you also have more control of where your income is sourced. Doing this before you retire gives you more time to get your house in order.
Shoppers Drug Mart Optimum Points Calculator - If you are a fan, or a fanatic, of Shoppers Drug Mart’s Optimum program, then this calculator may be of help deciding whether or not their 20x points days, or 10x points for certain product purchases justifies paying a little bit more than at another local store.
It takes into account whether you purchase a Gift Card first to use for your actual purchases, Refer-a-Friend events where you can get bonus points by referring other people who shop, promotional points on items, and bonus multiplier days (such as the lucrative 20x points days).
It also allows you to input how many points you currently have and then see your projected grand total which it translates into actual dollars for regular days and bonus redemption days (special days usually held soon after 20x points days where 40,000 points and 75,000 points are worth significantly more.
Borrowing to Invest - TFSA vs RRSP vs Non-Reg vs Mortgage Paydown - If you are contemplating borrowing to invest, but want to see whether the tax deductibility of a loan to invest in a non-registered account outweighs the tax free growth and withdrawal of a TFSA account or the tax refund of a big RRSP contribution and the subsequent application of the tax refund to pay down your mortgage, then this might help.
Leveraged Investing - Non-reg vs RRSP vs TFSA - If you are contemplating borrowing to invest, but want to see whether the tax deductibility of a loan to invest in a non-registered account outweighs the tax refund of an RRSP account or the tax free growth and withdrawal of a TFSA account, then this might help.