CRA: Will You Obtain a Grocery Rebate in 2024?

Final July, the Canada Income Company (CRA) launched the grocery rebate, a one-time tax credit score. The rebate helped thousands and thousands of households offset the rising value of groceries, which has spiked within the final two years. In keeping with a report from Statistics Canada, grocery costs rose greater than 9% 12 months over 12 months as of April 2023.

The grocery rebate was accessible to people with incomes of lower than $32,000 or to households with incomes of lower than $38,000. In keeping with the CRA, round 11 million Canadians had been eligible to obtain the cost.

To qualify for the rebate, people ought to have filed a tax return for 2021. Additional, the CRA emphasised households or people who obtained the GST/HST tax credit score can anticipate to obtain the grocery rebate too.

Single people with no kids would obtain $234, whereas these with two kids would obtain $467. Whereas inflation stays elevated, there isn’t any announcement by the CRA to offer an analogous rebate in 2024.

How do you navigate an inflationary atmosphere?

Just like different central banks, the Financial institution of Canada has hiked rates of interest considerably within the final two years to offset inflation. A better value of debt and steep inflation have meant customers now have much less to spend. Actually, the family financial savings price in Canada has fallen from 9.3% within the third quarter (Q3) of 2021 to six.2% in This autumn of 2023.

In periods of inflation, it is sensible to decrease discretionary bills comparable to eating and journey. It’s additionally important to restrict your bank card debt and make common funds to keep away from curiosity fees on these expenditures.

You have to create a nest egg

Traditionally, a mix of upper rates of interest and inflation has translated to decrease company earnings, leading to industry-wide layoffs and financial recessions. Whereas the Canadian economic system remains to be resilient, it’s uncovered to macro headwinds, together with geopolitical tensions.

To outlive an financial downturn, Canadian people and households have to concentrate on making a nest egg that may supply them liquidity throughout recessions.

One option to constantly enhance your financial savings is by investing in exchange-traded funds, or ETFs, that observe broader indices such because the S&P 500. Within the final 50 years, the S&P 500 index has returned over 10% yearly after adjusting for dividend reinvestments, creating vital wealth for long-term traders.

You possibly can achieve publicity to the S&P 500 index by investing in a low-cost index fund comparable to Vanguard S&P 500 Index ETF (TSX:VSP). The Canadian ETF is hedged to the CAD, shielding you from fluctuations in international alternate charges. Additional, it gives you publicity to a few of the largest corporations on this planet, comparable to Microsoft, Apple, and Nvidia.

Whereas the S&P 500 trades close to all-time highs, the favored index ought to ship inflation-beating returns over time as a result of constant growth of company earnings and rising gross home product numbers. Given annual returns of 10%, an funding of $500 each month will enable you improve your portfolio measurement to over $665,000 over 25 years.