The RRIF and Your Retirement Withdrawal Strategy

Many of us contribute to a Registered Retirement Savings Plan (RRSP) to achieve tax deductions and tax-deferred growth to plan for retirement. When the RRSP must be collapsed, funds are often converted to a Registered Retirement Income Fund (RRIF), which requires minimum withdrawals prescribed by the government based on age (please refer to Canada Revenue Agency for withdrawal rules). RRIF withdrawals are treated as taxable income.
If you plan on holding a RRIF, some forethought should go into your withdrawal […]

Impact of Longer Lifespans on Retirement Plans

There are many factors that can affect the amount you need to save for retirement. One factor that is often overlooked is the increasing average life expectancy.
Here is a great article about the impact of longer lifespans on our retirement plans:

Canadians are living longer and it’s changing the financial equation for retirement
By Kate MacDonald
“…Today, one of the most taxing challenges that is often left out of the conversation is the impact of the change in average lifespan. According to […]

What Percentage of Investments Should I Withdraw in Retirement?

The percentage that a retiree decides to withdraw in retirement from their investments is referred to as a drawdown percentage. This is the portion of retirement account that a retiree withdraws each year. What percentage is the best amount to withdraw?
If the drawdown percentage is too high, the retiree will outlive their savings and struggle financially at the end of their life. If the drawdown percentage is too low, the retiree will die with money left over. Many people […]

RRIF’s and LIF’s Eligible for Splitting Pension Income

Clients are often surprised when I tell them that the Registered Retirement Income Fund (RRIF) and Life Income Fund (LIF) are considered pension income. This opens up a few opportunities to save on taxes and put extra cash in your pocket each year.
Rules Around Pension Splitting
Under pension rules, the CRA allows you to split up to 50% of eligible pension income with your spouse or common law partner. You must both be Canadian residents for tax purposes, and live […]

Financial Planning Across Generations: Wants vs. Needs

In many cases Baby boomers not only have to plan for their own financial future, but also that of their parents. Not all Baby boomers are going to inherit money from their parents; many will have to assist their parents both financially and personally. There is a distinct gap between the level of financial assistance that parents of adult children think they want, and what they really need.
Toronto-based, Bayshore Home Health conducted a survey in February 2018 that revealed […]

Old Age Security Clawback

Many people are surprised that when they turn 65 they are not guaranteed to get all of their Old Age Security (OAS). They do not realize that OAS is income tested and if you make over a certain income in a year it will be “clawed back,” officially known as the OAS Recovery Tax.
How does the clawback work?
If you make $77,580 (2019) or higher, you get a reduction in OAS benefits by 15 cents for every dollar over that […]

Navigating the Passive Income Rules: IPPs for Retirement

With changes to passive income rules now in effect for small business, owners may be looking for ways to invest income earned in their corporation. Contributing funds to an Individual Pension Plan (IPP) may help to increase retirement savings on a tax-deferred basis outside of the corporation.
What is an IPP?
An IPP is a defined-benefit pension plan that is registered with the Canada Revenue Agency (CRA). While the IPP has been around since 1991, there has been renewed interest in […]