Happy New Year: Are these financial updates on your radar?

If working towards financial goals is one of your top resolutions for the year ahead, then you’ll definitely want to be on top of the following updates for 2025.

TFSA Update: The annual contribution limit has remained at $7,000.

Whether you’re looking to build savings for an emergency fund, save for a down payment on a home, or create an extra financial cushion for retirement (over and above your pension income)—being able to contribute more to your TFSA annually provides you with even greater earning potential.

If you haven’t been topping up your annual TFSA contributions, here is the cumulative contribution room as of January 1, 2025:

TFSA quick tips

• Get into the habit of making TFSA contributions in January (versus waiting until later in the year) in order to capitalize on the earning potential of compound interest
• If topping up your TFSA all at once is too much of a strain on your budget, setting up pre-authorized contributions can make it more manageable by choosing how much you can afford to contribute and how often
• Plus, here are 3 more tips to truly maximize the benefits of a TFSA

OTPP Update: An inflation adjustment of 2.7% has been made for 2025.

If you are a retired education member receiving pension benefits from Ontario Teachers’ Pension Plan, this means you’ll receive a pension increase equal to 100% of the Consumer Price Index (CPI).

What is CPI?

The CPI is a measure used to determine inflation rates based on a weighted basket of goods and services typically purchased by Canadian households each month (such as transportation, food, and medical care). A weight out of 100 is calculated and assigned by taking price changes for each item in the weighted basket of goods and averaging them.

If you retired in 2024, your first pension increase will be prorated from your last day of credit in 2024

If you’re still years away from retirement, there are steps you should be taking now to put your finances on the right path to retirement

RRSP Update: The annual dollar limit for 2025 is $32,490 (up from $31,560 in 2024).

Keep in mind that while the amount you can contribute to your RRSP is limited to 18% of earned income in 2024, your individual maximum contribution will depend on any pension adjustments and carry-forward of unused deduction limits from previous years.

Tax-Free First Home Savings Account (FHSA).

The FHSA is a registered plan that will provide prospective first-time Canadian homebuyers with the ability to save up to $40,000 of tax-free money—which they can then put towards the purchase of their first home.

Thinking of buying your first home? Learn more about FHSA here.

In addition to the above updates, 2025 will likely see a decrease in interest rates

With that said, it probably comes as no surprise that according to a recent poll, the number one goal for most Canadians this year is to repay debt.

Paying down debt is a great goal to have and the following articles are a good place to start:

• 3 tips for taking your credit card debt to zero
• 5 credit tips to put you on a path to borrowing responsibly (and saving money)
• Rising interest rates and debt: what you need to know

Do you have specific financial goals for 2025 and beyond? Call on Educators Financial Group..

No matter where you are on the pay grid or what your pension income is in retirement, we can work with you to develop a financial plan that is able to grow and adapt according to your needs, goals, and budget.

Put our educator-specific experience to work for you.

Sources:
https://www.otpp.com/en-ca/members/planning-tools-and-resources/faqs/retired-member/#op-collapse-inflation2024

https://www.ctvnews.ca/canada/top-goal-in-new-year-for-canadians-is-repaying-debt-cibc-poll-1.6210818