Tag Archives: Canada Retirement Savings Plan

What Inflation Rate Should I Use for the Cost of Electricity? How Much Does Electricity Go Up Each Year?

Posted on by

Unfortunately you can’t just set a budget once and use it for years. The costs of budget items keep changing even if your usage stays the same. As we approach retirement, I keep trying to get a clearer picture of what our costs will be not just for year 1 but for 20-30 years, should we be so lucky. Recently, I decided to check into how much our cost for electricity has been going up each year above the so-called rate of inflation.

What Total Amount Do We Pay Per kWh for Electricity Including the Taxes, Surcharges and Other Costs?

In Ontario, we pay a high rate for home use of electricity. Partly that’s because we’re still paying off all sorts of costs related to setting up and maintaining our nuclear reactors, shutting down our coal-fired generating stations, and paying huge amounts per kWh to people who set up solar arrays.

I took a look at our annual total spending on electricity divided by our total annual usage to see what our historical annual charge per kWh has been.

Year    $/kW         % Change

2015    0.156         6
2014    0.147         7
2013    0.137         7
2012    0.129       24
2011    0.103        -3
2010    0.107      -10
2009    0.119         8
2008    0.111        -6
2007    0.118      -21
2006    0.149         8
2005    0.138         9
2004    0.127         7
2003    0.119      -13
2002    0.137       22
2001    0.112

What Percentage Did Our Electricity Costs Go Up Per Year for the Past 10 Years?

If you look at the chart above, you’ll see it jumps around a lot. That’s because some of the rates were before “time of use” billing. And some years we used less or more electricity depending on the weather. And various government incentives and penalties came on and off.

You can see it’s going to be very difficult to pick a number to use for our rate of inflation. Some years our hydro rate per kWh actually decreased substantially, even though our usage has been fairly constant. That’s because this rate includes all those “non-variable” costs like delivery charges and debt retirement fees.

For planning purposes, I’m going to use 7% for the annual rate of increase in hydro costs. It’s probably wrong but I have to use something!

Related Reading

Join In
What do you use to estimate the increase in the cost of electricity per year in your budget? Have you ever had to cut from other budget categories because your hydro costs rose faster than you expected? Please share your experiences with a comment.

How to Buy a RRSP GIC from Peoples Trust

Posted on by

Peoples Trust is offering one of the best interest rates for RRSP GICs this year. You can buy a GIC for your RRSP from Peoples Trust website and mail in your cheque to pay for it but if you want to claim it on your 2014 tax return, you have to place your order by the end of February 28.

These instructions assume you do NOT already have an account with Peoples Trust. It’s shorter and faster if you already have an investment with them.

Buying a GIC Online from Peoples Trust for Your RRSP

Go to their website at http://www.peoplestrust.com/high-interest-accounts/rrsp-accounts/rrsp-gic/

Click on the link called Click here to open your account now.

Step 1 The Product Information Page

  1. From the drop-down list click to select the answer to Are you an existing Peoples Trust client?
    I selected No.
  2. From the drop-down list, choose the product you wish to buy.
    I selected RRSP.
  3. From the drop-down list, choose how long you want to invest your money in the GIC. NOTE: It can not be cashed before the end of the term.
    I selected 1 year.
    The Rate box will show you the rate for that choice.
  4. In the Amount box, type how much you want to invest in the GIC. The minimum is $1000.
  5. Click on the Next button.

Step 2 The Contact Information Page

  1. Click to select the button beside the title you prefer such as Mr. or Dr.
  2. Type to fill in the following fields:
    • First Name
    • Initial
    • Last Name
    • Street Address
    • Suite
    • City
    • Postal Code
    • Home Telephone
    • Business Telephone
    • Email Address
    • Social Insurance Number
    • Occupation
  3. And from the drop-down lists select the appropriate answer for
    • Province
    • Date of Birth
    • Gender

Designating Your RRSP Beneficiary

  1. Click to select the option “Yes, I would like to designate a beneficiary to this plan.
  2. Type in the appropriate information in the text fields for
    • Beneficiary First Name
    • Beneficiary Middle Name
    • Beneficiary Last Name
    • Relationship to Account Holder
  3. Then read and if acceptable, click to select the box beside the message:
    “I hereby designate the above as my elected Beneficiary to the said Plan, whereby the Beneficiary will be entitled to all payments and benefits payable hereof in the event of my death. I hereby revoke any previous Beneficiary designated by me and shall ensure this designation is legal and binding pursuant to the applicable Provincial Territories and Federal Laws of Canada, while reserving the right to cancel this designation under the terms and conditions governing the plan.”
  4. ONLY if the contribution is for a Spousal RRSP, click to select “Yes, please include my spouse in my contribution plan.”
  5. Click on the Next button.

Step 3 The Legal Verification Page

The Citizenship and Residency Section

  1. Click to confirm you reside in Canada, the US or Other as appropriate.
  2. If you live in the US please provide your TIN by typing it in the field.
  3. Click to select Yes or No to answer the question Are you a U.S. citizen.

The Third Party Information Section

From the drop-down list, select to confirm whether or not anyone else will benefit from this RRSP contribution.

Note: they are worried about some person hiring or forcing you to “launder” money from illegal activities. Most people will be answering No to this question. It doesn’t mean will your spouse be happy, etc.

The Politically Exposed Person Section
Answer the Yes No question about how important you and your family are in the government, politics and military.

The Intended Use of Account Section

Click to select Retirement.

The Identification Verification Section
Click if you agree to permit Peoples Trust to check your id and credit rating.

Click on the Next button.

  1. Step 4 The Payment Information Page
    You can pay for your RRSP GIC by cheque or by transferring money from another RRSP at another institution.
  2. Click to select your method of payment.
  3. Click on the icon beside Terms and Conditions to review the terms and conditions.
    If they are acceptable, click on the box beside: I agree to Terms & Conditions
  4. Type the Captcha code in the text field.
  5. Click on the Preview button.
  6. If it all looks ok, click on the Finish button.
  7. Write down your deposit confirmation number.

You’ll now need to mail in your cheque or your RRSP transfer form to fund the purchase of the GIC.

The instructions say to make the cheque payable to yourself. I was surprised by that, but the Peoples Trust service representative confirmed it’s correct when I phoned and asked.

Write your deposit confirmation number on the front of your cheque to make it faster.

Mail the cheque to the address provided on the screen. On February 27 2015 this was:

Peoples Trust Company
1400-888 Dunsmuir Street
Vancouver, BC V6C 3K4

Disclaimer: I have not personally purchased a GIC from Peoples Trust, yet.

Related Reading

Join In

Do you use Peoples Trust for your TFSA or RRSP GICs? Please share your experiences with a comment.