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Receiving a refund means you’ve paid more tax than required throughout the year. If you do find yourself with a refund, here are six ideas to consider when deciding what to do with those funds.

1. Splurge (strategically) 

Spending tends to rank low on most “what to do with your refund” lists, but it doesn’t have to be off the table entirely. If your refund is relatively small, consider treating yourself to something meaningful, perhaps a dinner out, a weekend getaway, or something you’ve been putting off.

Even if your refund is larger, allocating a portion of it for enjoyment can be a reasonable choice, provided it fits within your broader financial plan.

2. Contribute to your RRSP                                                                                                                          

Using your refund to contribute to your Registered Retirement Savings Plan (RRSP) can help grow your long‑term retirement savings.

You may have unused RRSP contribution room carried forward from previous years if you didn’t contribute up to your limit. Applying your refund to an RRSP contribution can help you take advantage of that available room and move closer to your retirement goals.

RRSP contributions are tax‑deductible and can reduce your taxable income for the year in which the deduction is claimed. The funds then grow on a tax‑deferred basis until withdrawal.

Depending on your situation, contributing to a spousal RRSP may also be worth considering. This strategy can help couples split retirement income more evenly in the future and potentially reduce their overall tax burden.

3. Contribute to your TFSA

Another option is to place your refund into a Tax‑Free Savings Account (TFSA), especially if you’re saving toward a short‑ or medium‑term goal.

TFSA contributions are not tax‑deductible, but any investment growth and withdrawals are completely tax‑free. Your refund can be invested inside a TFSA in a range of income‑generating or growth‑oriented investments.

TFSA savings can be used for major purchases such as a home, travel, or lifestyle goals, and withdrawals do not impact your taxable income. This also makes TFSAs an effective tool for retirement planning, particularly when used alongside an RRSP to diversify how your future income is taxed.

4. Invest through a taxable (non-registered) account

While the tax advantages of an RRSP or a TFSA are very tempting, investing in a taxable brokerage account also has its advantages. Capital gains are taxed at a favorable rate, so it can make sense to hold investments that are likely to generate sizable capital gains in these accounts while holding income generating investments in an RRSP or TFSA.

Dividends collected on stocks in a taxable brokerage account are also taxed preferentially as opposed to some other income sources. This is because the company has already paid tax on these dividends, and the government does not tax this income again.

Another thing to keep in mind is that funds in a taxable account like an RRSP can be more readily accessible over time than funds held in a tax-sheltered account since they are not subject to the same rules.

5. Pay down debt

If you have outstanding debt such as high interest credit card payments, a personal loan or a mortgage you can consider putting some or all your tax refund towards reducing this debt. You can eliminate or at least reduce the overall amount of the payments on this debt, saving the compounded interest cost over time.

In the case of a mortgage, if the refund is sizable, you could consider making a substantial payment to reduce or eliminate this debt entirely.

6. Build or boost an emergency fund

Your refund money can be used to start or add to an existing emergency fund. This is money set aside in a liquid, low‑risk account to cover unexpected expenses such as job loss, medical costs, or major home or vehicle repairs.

A common guideline is to aim for three to six months of essential expenses. This typically includes housing costs, food, utilities, insurance, transportation, and other necessities required to maintain your standard of living.

Having an emergency fund can help you avoid relying on debt when the unexpected occurs and provides valuable peace of mind.

Review your withholding tax

While not something you would do with the funds from a tax refund, this is a good time to review your withholding tax for the current year to see if it best reflects your situation. Has your income level changed? If so, are you having enough withheld?

Withholding tax refers to the amount of income tax your employer withholds from your paycheck and typically does not consider various deductions normally claimed, such as RRSP contributions, which reduce your taxes payable. If you find yourself getting a sizable refund each year you might consider reducing your withholding tax, so you receive more money with each paycheck.

The takeaway… prioritize what’s important to you

Getting a hefty refund can be a form of forced saving, but you are not receiving any interest on this money. You could be putting it to better use during the year by investing it. However, it really depends on your current situation and your needs.

Contact your Rothenberg Wealth advisor to discuss the best way to put your tax refund to use and to do a review of your withholding tax to ensure that it is optimal for your situation.

By: Robert Rothenberg, CFA, CIWM, FCSI

When new prospects come to see us, they typically ask about our rate of return assumptions when projecting their financial success in retirement.

Many individuals look at the long-term average for the stock market at 10% or a blend of fixed income and equities and average 7% over retirement when calculating the income and portfolio growth of their investments.

When people are working and in the accumulation phase of their life and saving money on a regular basis to fund their retirement, using an average rate of return is fine as it doesn’t matter whether your portfolio performs well at the start and underperforms towards the end or underperforms at the start and excels at the end.

In retirement, many other factors come into play when determining if your income is sustainable. One of the major factors is the sequence of returns.

Poor returns at the start of retirement while withdrawing funds may make it extremely difficult to ever catch up. Bad timing can show that funds can be exhausted using a 5% withdrawal rate and an average rate of return of 10% in less than 20 years while the same withdrawal rate and a 7% average rate of return can have more funds than what an investor had initially when returns are strong at the onset.

The following illustration shows three different examples. The first shows a retiree lucky enough to retire in 1989 having started with $1 million taking out $50,000 per annum indexed to inflation with their funds growing to over $3,000,000 in 20 years.

The second example shows the same retiree with the sequence of returns reversed with the same $1 million and the same withdrawals. This retiree would run out of money in 18 years even with an identical average return.

The third example shows a retiree earning 7% which is considerably less than 10% but having close to $1.3 million after 20 years.

A cash wedge strategy would be highly recommended when starting the withdrawal phase of your life. Having 18 – 24 months of income invested in cash equivalents and short-term bonds which is used to fund your withdrawals early in retirement will help ensure success if the market declines dramatically early on.

By having this cash wedge, you won’t need to sell any of your equity holdings at low prices to fund your retirement allowing time for them to recover.

In retirement, consider less volatile stocks with decent dividends or dividend growth for most of your equity exposure. When the 2008 meltdown occurred, stocks with less volatility than the overall market performed significantly better in aggregate.

Investing similarly to a pension plan as well having some funds in private infrastructure, private real estate and/or private equity can also support this plan.

The same can be said for inflation which has been a non-factor for the better part of a decade. The historical average has been slightly more than 3% in North America with average annual rates in the 1 – 2% range. Indexing your withdrawals to inflation early on at higher rates will have a similar result as poor returns early in your retirement.

Try to keep the increase of your withdrawals below the inflation rate as this can help sustain your capital as most illustrations do index income withdrawals fully with inflation.

Taxation and costs also play a part in the success of your retirement. Maximizing contributions to Tax Free Savings Accounts is a must for individuals with non-registered funds. This can reduce the income tax payable on interest and dividend income along with capital gains substantially.

Consider pulling out some of your RRSP funds prior to age 71 if you are in a relatively low tax bracket to offset paying a higher amount of tax down the road.

Many individuals who do not have a private pension plan should consider taking out a small RRIF or annuity at age 65 to take advantage of the $2000 pension income credit.

Costs can also affect a successful retirement and eat away at returns. Ensure your overall costs are reasonable for the advice you are receiving.

By reviewing your retirement plan regularly taking into account the variables mentioned above will help you succeed where many fail.

As parents, many of the most important financial conversations don’t stop with your own plan. Whether your children are launching their careers, paying off student debt, or thinking about buying their first home, the financial decisions they make early on can have a lasting impact.

While young adulthood often comes with competing priorities and limited experience, it’s also a critical time to establish strong financial habits. This article outlines the foundational planning concepts young adults should understand, and highlights where guidance, structure, and early support can help set them on a more confident financial path.

Why start financial planning early?

Time is one of your greatest financial advantages a young person has. Starting early allows savings and investments to benefit from compounding, where money earns returns, and those returns generate returns of their own. Even modest contributions made consistently can grow meaningfully over time.

Beyond growth, early financial planning helps young adults:

• Reduce financial stress
• Avoid costly mistakes
• Make intentional choices about spending and saving
• Feel more prepared for major life milestones

A solid plan provides clarity, not restriction, and helps ensure money supports the life they want to build.

Build a strong foundation

Before investing, it’s important to establish a stable financial base.

Create an emergency fund

An emergency fund acts as a safety net for unexpected expenses such as car repairs, medical costs, or job changes. A common guideline is to aim for three to six months of essential living expenses in a high‑interest savings account.

Manage debt strategically

Many young adults carry student loans, credit cards, or car loans. Not all debt is bad, but high‑interest debt can significantly slow progress. Prioritizing repayment, especially for high‑interest balances, can free up cash flow and reduce financial pressure over time.

Understand your Canadian tax-advantaged savings options

Canada offers several powerful registered accounts designed to help you minimize taxes and save more efficiently.

Tax‑Free Savings Account (TFSA)

Despite its name, the TFSA isn’t just for cash savings. It’s a flexible account that allows different types of investments to grow tax‑free, with withdrawals also tax‑free. TFSAs are ideal for shorter‑ or medium‑term goals, or as a complement to long‑term investing.

Registered Retirement Savings Plan (RRSP)

RRSP contributions are tax‑deductible, which can be especially valuable as income increases. While retirement may feel far away, starting early, even with small amounts, can significantly reduce the effort required later.

First Home Savings Account (FHSA)

For young adults planning to buy their first home, the FHSA combines features of both a TFSA and an RRSP. Contributions are tax‑deductible, and qualifying withdrawals for a first home are tax‑free, making it a powerful tool for future homeowners.

Investing with purpose

Investing doesn’t require perfect timing or expert predictions. What matters most is having a clear strategy aligned with goals, time horizon, and comfort with risk.

Young adults typically have longer time horizons, which can allow for greater exposure to growth‑oriented investments. That said, diversification and discipline remain essential. A well‑constructed portfolio helps balance risk while keeping you invested through market ups and downs.

Avoiding emotional reactions to chase trends or react emotionally to short‑term market movements. Consistency and patience are often the most effective investment strategies.

Protect what you’re building

As a young adults life grows, so does the need for protection.

Insurance, such as disability or life insurance, can help safeguard income and loved ones if the unexpected occurs. While it’s not always top of mind early on, having appropriate coverage in place can prevent financial setbacks later.

Financial planning is not one‑size‑fits‑all

Everyone’s financial journey looks different. Career paths, family plans, lifestyle goals, and values all play a role in shaping the right strategy. That’s why financial planning is most effective when it’s personalized and reviewed regularly as circumstances evolve.

Working with a trusted wealth management professional can help you:

• Clarify goals and priorities
• Build a realistic, adaptable plan
• Navigate complex decisions with confidence
• Stay accountable over time

How parents can help

Supporting adult children financially doesn’t always mean providing capital. In many cases, the most valuable support is helping them establish good habits, understand their options, and put a thoughtful plan in place early.

Encouraging conversations around saving, investing, debt management, and long‑term goals can help young adults avoid common pitfalls and gain confidence in their financial decisions.

If your children or grandchildren are at this stage of life, we’re happy to be a resource, whether that means answering questions, providing guidance, or helping them build a plan that complements your broader family goals.

Feel free to share this article with them, or contact us to discuss how thoughtful planning today can support your family across generations.

Recent developments in the Middle East have introduced renewed geopolitical uncertainty into global markets. As expected, the initial reaction included market volatility, rising oil prices, and increased demand for traditional safe‑haven assets such as gold and the U.S. dollar. These moves reflect short‑term caution rather than a fundamental shift in the long‑term economic outlook.

The primary area of focus has been energy markets. A significant portion of the world’s oil flows through the Strait of Hormuz, and concerns about potential disruption have pushed oil prices higher. That said, global oil markets entered this period relatively well supplied, and OPEC+ has already taken steps to increase production—factors that may help limit longer‑term impacts if the conflict remains contained.

Higher energy prices can contribute to inflation pressures, which is why bond markets have been sensitive to these developments. For now, markets appear to be pricing in uncertainty rather than a lasting economic shock. History shows that geopolitical events often create short‑term volatility, while long‑term market performance continues to be driven by fundamentals such as earnings, growth, and valuation.

Our perspective at Rothenberg Wealth Management

Periods of uncertainty reinforce the importance of staying focused on fundamentals rather than reacting to headlines. At Rothenberg, we have access to Harbourfront institutional quality investment solutions that are actively managed to take advantage of long-term opportunities in the markets. Speak with a Rothenberg Wealth advisor to find out more about how these investment solutions can help you achieve your financial goals.

Read the full, in‑depth article here.