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I’m guilty of hoarding credit card reward points, or at least I was until my wife talked me out of it. She likes using points in little bunches to get tangible benefits on an ongoing basis. I liked saving points for a big bonus.

What finally swayed me was the number of times our points programs have been changed in a way that either devalued our accumulated points or required us to blow them off quickly to preserve value. Now, I redeem points often instead of hoarding like so many others.

The results of a recent poll sponsored by PC Financial document the extent to which people hang onto their points. The approximate dollar value of the loyalty points there currently carry for poll participants was $832. That’s based on an average of $357 for millennials, $775 for people aged 35 to 54 and a whopping $1,246 for those aged 55 and up.

The average dollar value of points redeemed over the past year was $343, based on $197 for millennials, $418 for people 35 to 54 and $383 for 55 and up.

The total value of accumulated points reflects participation in multiple loyalty programs, but most people have one or two plans they use the most. Assess your strategy for those programs – if you’re hoarding and not getting great rewards, then how about using your points as you accumulate them? This may not get you the greatest possible bang for your buck, but getting small rewards on a regular basis can be very satisfying.

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Rob’s personal finance reading list…

New ideas in retirement is doing something cool – gathering up examples of fresh thinking on retirement. This instalment looks at the psychology of feeling ready to retire, and at how artificial intelligence may help seniors stay in their own homes longer.

What time do you eat dinner?

An appreciation of the benefits of eating dinner early: It’s easy to get a reservation, restaurant staff aren’t harried and you have the evening ahead of you. Might be the best way to get value for your restaurant dollar.

Ethical failure in the fund industry

A story about how two people aged 90-plus ended up investing in mutual funds with a deferred sales charge, where you pay a redemption fee if you sell within seven years of buying. The compliance department at the firm offering these funds initially questioned these transactions, but then approved them. The firm no longer offers DSC funds.

Why robo-advisers won’t kill the advice business

A magazine for the investment advice business looks at how millennial advisers are attracting clients using social media, podcasts and video. I’m a big fan of robo-advisers, but this story makes me confident that human advice has a future.

Ask Rob

Q: I am interested in how annuities are taxed [outside registered accounts] and how they may affect Guaranteed Income Supplement payments. It’s my understanding that income from an annuity is broken down into interest and return of capital, and only the former would be taxable and affect GIS.

A: I referred this question to insurance adviser Rino Racanelli, an expert on annuities. His reply: “A lot will depend on the age of the annuitant. The older the annuitant, the less amount of tax is payable because annuity income will be mostly a return of principal. For example, I just completed a $150,000 single life prescribed (non-registered) annuity with a 15-year guarantee for a 75-year-old male. He will receive an annual income of $10,800 and a taxable amount of $1,723. The insurance company will send my client a T4 annuity showing $1,723 as taxable income. This would help reduce annual taxable earnings. If my client had $150,000 in a GIC earning 2 per cent, the financial institution would send him a T5 showing $3,000 as income. There is a difference of approximately $1,300 in reduced taxable income. Depending on the person's taxable income for the year this reduction may give them a possibility of qualifying for GIS.

Note: Payments from registered annuities are taxed as regular income.

Do you have a question for me? Send it my way. Sorry I can’t answer every one personally. Questions and answers are edited for length and clarity.

What I’ve been writing about

  • Here’s how Canadian banks are trying to keep their customers hooked on borrowing
  • What’s better – bank stocks or a bank stock ETF? (for Globe Unlimited subscribers)
  • Balanced fund smackdown: Old-guard mutual funds versus upstart ETFs (for Globe Unlimited subscribers)

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