Happy New Year!

As we welcome 2026, this is an ideal time to pause, reflect, and plan with intention. At Foster & Associates, we help individuals and families navigate the complexities of wealth with a disciplined, integrated approach. Our focus extends well beyond investments alone—we begin with what matters most to you: your values, priorities, and long-term aspirations.

By integrating tax planning, investment strategy, and estate considerations, we develop purpose-driven solutions designed to support both your immediate financial needs and your long-term, multi-generational goals.

Below are several timely planning opportunities to consider as we begin the year.

Immediate Planning Opportunities & Key Deadlines

Family Income-Splitting Loans

Interest Payment Deadline: January 30, 2026
If you have implemented a prescribed-rate family loan strategy, interest must be paid by January 30, 2026 to avoid income attribution. Missing this deadline can result in investment income being taxed back in the lender’s hands, eliminating the intended tax benefit.  The prescribed rate for these types of loans is currently 3%.

Maximize RRSP Contributions

Deadline: March 2, 2026
RRSP contributions remain one of the most effective ways to reduce current taxable income while enhancing long-term retirement security.

• • The 2026 RRSP contribution limit is 18% of prior-year earned income, to a maximum of $33,810 (whichever is lower).
  • Spousal RRSPs can also help equalize retirement income and reduce lifetime family tax.

Explore Individual Pension Plans (IPPs)

If you are incorporated business owner with stable T4 income, typically age 40+ consider exploring an IPP for greater tax savings.

• • Allows significantly higher tax-deductible retirement contributions than an RRSP
  • Contributions are made by the corporation, reducing corporate taxable income
  • Assets grow tax-sheltered in a structured, pension-style plan
  • May permit past-service contributions, creating a meaningful one-time tax deduction
  • Best suited for professionals with excess retained earnings and long-term planning horizons

For the right business owner, an IPP can materially enhance retirement income while improving corporate tax efficiency—when integrated into a broader wealth and tax strategy.

Top Up Your Tax-Free Savings Account (TFSA)

TFSAs continue to be a cornerstone of tax-efficient wealth planning, offering tax-free growth and tax-free withdrawals.

• • The 2026 TFSA contribution limit is $7,000.
  • The lifetime cumulative TFSA limit is $109,000 for individuals who have been eligible since inception and never contributed.
  • TFSAs are particularly effective for retirement cash-flow flexibility, estate planning, and intergenerational gifting.

First Home Savings Account (FHSA)

The FHSA remains a powerful planning tool for first-time home buyers, combining RRSP-style tax deductions with TFSA-style tax-free withdrawals for qualifying home purchases.

Key FHSA limits for 2026:

• • Annual contribution limit: $8,000
  • Lifetime contribution limit: $40,000
  • Contributions are deductible against income, similar to an RRSP
  • Qualifying withdrawals for a first home purchase are tax-free, up to $40,000 per individual
  • The account can remain open for up to 15 years, offering flexibility for longer-term planning

This strategy can be especially effective when supporting the homeownership goals of adult children or the next generation.

Support Education Goals with a Registered Education Savings Plan (RESP)

RESPs provide tax-deferred growth and access to valuable government grants to help fund post-secondary education for children and grandchildren.

Key RESP amounts:

• • Annual contribution to receive maximum grant: $2,500 per beneficiary
  • Canada Education Savings Grant (CESG): 20%, up to $500 per yea
  • Lifetime CESG maximum: $7,200 per beneficiary
  • Lifetime RESP contribution limit: $50,000 per beneficiary

Early and consistent contributions can materially reduce the long-term cost of education while allowing investment growth to compound tax deferred.

Registered Disability Savings Plan (RDSP)

For families supporting a loved one with a disability, RDSPs can play a vital role in long-term financial security.

It is a powerful long-term planning tool designed to provide financial security for individuals eligible for the Disability Tax Credit (DTC).

Key RDSP features and limits:

• • Lifetime contribution limit: $200,000 per beneficiary
  • Contributions are not tax-deductible, but investment growth is tax-deferred
  • Funds can be contributed by parents, grandparents, or other family members (with consent)

Government support

Canada Disability Savings Grant (CDSG)

• • Matching grants of up to 300%, depending on family income
  • Maximum $3,500 per year
  • Lifetime grant maximum: $70,000

Canada Disability Savings Bond (CDSB)

• • For lower-income families, up to $1,000 per year
  • Lifetime bond maximum: $20,000
  • No personal contribution required to receive the bond

Risk Management Planning — Protecting What Matters Most

For clients with dependants, effective wealth planning goes beyond growing assets—it also means protecting your family against unexpected events. A well-designed risk management strategy, including appropriate insurance coverage, helps ensure financial stability if illness, disability, or premature death occurs.

Key considerations for families with dependants:

• • Life insurance can provide income replacement, fund education costs, retire debt, and support a surviving spouse or partner
  • Disability insurance protects your most valuable asset—your ability to earn income—by providing cash flow if you are unable to work
  • Critical illness insurance can help cover medical expenses or lifestyle adjustments following a serious diagnosis, without disrupting long-term investment plans.

Our Commitment to You

At Foster & Associates, we remain committed to delivering thoughtful, proactive advice that evolves with your circumstances. Our planning and investment teams work closely together to provide integrated wealth strategies that are practical, tax-aware, and aligned with your long-term objectives.

If you would like to review any of the strategies above—or explore additional planning opportunities tailored to your situation—we encourage you to reach out to your Foster & Associates advisory team to schedule a personalized wealth planning discussion.

Wishing you continued prosperity and clarity in the year ahead!

Warm regards,

Foster & Associates

Disclaimer: This article is for general information purposes only, and is not legal, financial, or tax planning advice.   Everyone’s situation is unique, and this article cannot apply to every person.  The reader should not take any action, or refrain from taking any action, as a result of this article without first obtaining legal or professional advice.