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#18 – The US/Canada Financial Lingo Translation Episode
In this episode, the guys ask if the Canadian government makes it harder for us on our way to FIRE than for Americans? We’ll sample a few new beers as usual too. If you found this podcast you’re probably familiar with the FI/RE movement that has grown in popularity recently. Here at the FI Garage, we’re all on the path to FI, however, we consider the RE part optional.
Beer #1 – Guinness Draught [1:00]
Useful Tool – Our Listeners [5:00]
Thank you for helping us get to 2,000 listeners in one month and for all your feedback
The FI Garage Dictionary [7:30]
Has the Canadian Government made it easier or harder to fire?
Retirement and Other Accounts [9:30]
Traditional Individual Retirement Account (IRA) is like an RRSP BUT we are not charged penalties for early withdrawal [9:50]Spousal IRA is like a Spousal RRSP [12:45]Roth IRA is like a TFSA [13:05]401k is like a Group RRSP or a Defined Contribution Pension Plan [16:05]529 is like an RESP [19:19]ABLE Account is like an RDSP [22:30] Health Spending Account (HSA) – we don’t need these because we have private health care [25:15]Flexible Spending Account (FSA) – pretax dollars that can fund expenses like vision, dental, etc. – we’d love a similar account in Canada! [26:20] Simplified Employee Pension (SEP) IRA is like a Traditional IRA with higher limits [29:00]Savings Incentive Match for Employees (SIMPLE) IRA is basically an RRSP match program [30:05]Certificate of Deposit (CD) is essentially a GIC [31:08]
Maneuvers [32:05]
Backdoor Roth – we do not need this as everyone qualifies for TFSAs [32:05]Roth IRA Conversion Ladder – we never incur penalties to withdraw from TFSAs or RRSPs [32:25]
Government Programs [32:55]
Social Security vs CPP, OAS, GIS, Pharmacare
Canadian Accounts [34:45]
LIRA – a holding place for pension plan money you have cashed out [35:29]RRIF – what you convert an RRSP to if you want regular withdrawals or you are too old to hold RRSPs [36:25] LIF – what you convert a LIRA to so you can withdraw money [37:40]
Reading List
The US/Canadian FI Glossary via Chrissy at eatsleepbreathefi.com (8:45)What’s the Difference Between Retirement in Canada and America via Investopedia
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By FI Garage
5
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In this episode, the guys ask if the Canadian government makes it harder for us on our way to FIRE than for Americans? We’ll sample a few new beers as usual too. If you found this podcast you’re probably familiar with the FI/RE movement that has grown in popularity recently. Here at the FI Garage, we’re all on the path to FI, however, we consider the RE part optional.
Beer #1 – Guinness Draught [1:00]
Useful Tool – Our Listeners [5:00]
Thank you for helping us get to 2,000 listeners in one month and for all your feedback
The FI Garage Dictionary [7:30]
Has the Canadian Government made it easier or harder to fire?
Retirement and Other Accounts [9:30]
Traditional Individual Retirement Account (IRA) is like an RRSP BUT we are not charged penalties for early withdrawal [9:50]Spousal IRA is like a Spousal RRSP [12:45]Roth IRA is like a TFSA [13:05]401k is like a Group RRSP or a Defined Contribution Pension Plan [16:05]529 is like an RESP [19:19]ABLE Account is like an RDSP [22:30] Health Spending Account (HSA) – we don’t need these because we have private health care [25:15]Flexible Spending Account (FSA) – pretax dollars that can fund expenses like vision, dental, etc. – we’d love a similar account in Canada! [26:20] Simplified Employee Pension (SEP) IRA is like a Traditional IRA with higher limits [29:00]Savings Incentive Match for Employees (SIMPLE) IRA is basically an RRSP match program [30:05]Certificate of Deposit (CD) is essentially a GIC [31:08]
Maneuvers [32:05]
Backdoor Roth – we do not need this as everyone qualifies for TFSAs [32:05]Roth IRA Conversion Ladder – we never incur penalties to withdraw from TFSAs or RRSPs [32:25]
Government Programs [32:55]
Social Security vs CPP, OAS, GIS, Pharmacare
Canadian Accounts [34:45]
LIRA – a holding place for pension plan money you have cashed out [35:29]RRIF – what you convert an RRSP to if you want regular withdrawals or you are too old to hold RRSPs [36:25] LIF – what you convert a LIRA to so you can withdraw money [37:40]
Reading List
The US/Canadian FI Glossary via Chrissy at eatsleepbreathefi.com (8:45)What’s the Difference Between Retirement in Canada and America via Investopedia