Stay Invested, even Non-Registered Acct.

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Stay invested, even in non-registered accounts. Paying a larger tax at the end can be better than splitting gains into smaller yearly tax bills. Here’s why.

Last update Oct 2024
  • Scenario 1: Stay Invested & Pay Tax Once
  • Scenario 2: Split Gains to Yearly Tax Bill
  • Which One Is Higher (%)

For most people, paying taxes each year shrinks the nest egg, reducing funds for exponential growth—even with a big tax bill and capital gains at 66.6%. Unless you're very wealthy, with over $3M, it’s a tough spot.

# Years from Now
Try your numbers:

A =

This is the expected performance of your investment combination. We all know investments have ups and downs. On average, they tend to yield 4~7% per year.

B =

This is how much you'll have to pay CRA (and Revenu Quebec if you're Quebecker) for every other dollar you make, on top of your current income. Google a "tax calculator" to find out yours.

C =
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Time Value Assumptions

Heads Up!

If you're using Cost Basis (cb) for calculating capital gains:

Please be aware that very few countries currently use inflation-indexed cost basis. Double-check your local tax rules before publishing.

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How is Cash Value calculated?

You stay invested, your account value tracks the full investment return %. When you sell the investment, a capital gain tax is due on the capital gain of the entire time period. For simplicity, the marginal tax rate is applied.

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(Expressions are evaluated at Year 0 only.)

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Calculations

(Expressions are evaluated at every year.)

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