All about Retirement Planning in Canada. Learn the ins and outs and get the latest news.
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Single, no pension? Here’s how to plan for retirement in Canada Jul 4th
Being single in retirement has some financial obstacles. Some people are single as they enter retirement. Others become single due to divorce or death prior to or after retiring. Here are some considerations for planning your retirement as a singleton, especially if you have no defined benefit (DB) .... More »
Should Kathy take monthly payments or the commuted value of her pension? + MORE Jun 15th
Q. I am torn about making a key financial decision in my life. First, a little about myself. I worked for about seven years (actually, six years and 360 days) as a teacher in the Arctic. I resigned this year and have returned to the “south.”
Now, I have about a year to decide whether I cash out .... More »
When are tax-deferred and tax-free accounts actually taxable? + MORE Feb 9th
Q. I saw your blog online; thank you so much for the wonderful job that you are doing—it was very informative! That motivated me to start investing too, but now I have a couple of questions. I understand that there is tax on US dividends in TFSA, do we pay tax as well when we sell:
U.S. stocks in.... More »
Retirement Income for Life: Why Canadian retirees love Frederick Vettese’s books and his PERC + MORE Feb 22nd
Since I turn 71 soon, my attention is naturally becoming focussed on the inevitable question of what to do when my registered retirement savings plan (RRSP) must be collapsed. Do I keep it as a registered retirement income fund (RRIF)? Or should I convert it into an annuity? Maybe I do a combination.... More »
The process of unlocking a LIRA account in Canada Feb 1st
Thank you for “How to get money out of locked-in retirement accounts”.
I have a federally regulated LIRA. I’m 55. I’m looking to unlock 50% of the balance. I came across your article while seeking some LIRA/LIF/RRSP information.
I’m getting conflicting information regarding t.... More »
Q. I’m 24 years old and have a dilemma. I have made the maximum contributions to my Tax-Free Savings Account (TFSA) every year, and now I’m wondering what money moves I should make next. By that, I mean what is the best investment route for me at this stage of my life so that I pay the least amount of taxes on my future investments?
As I see it, my two options are either to start an RRSP or, to start a non-registered investment account. I mostly like to invest in exchange-traded funds (ETFs) that offer both dividends and capital gains. Let me say that I study and work in the financial industry, and I am aware of the tax benefits of the RRSP but I do have a couple of concerns with it as a savings vehicle. First, your money is generally stuck in the RRSP until retirement—unless you are willing to pay high withdrawal fees. (I like to know that my money is accessible in some manner.) And, second, the RRSP is simply a tax deferment vehicle until age 71. Once the money is withdrawn, depending on your tax bracket, tax will be due…
As I see it, my two options are either to start an RRSP or, to start a non-registered investment account. I mostly like to invest in exchange-traded funds (ETFs) that offer both dividends and capital gains. Let me say that I study and work in the financial industry, and I am aware of the tax benefits of the RRSP but I do have a couple of concerns with it as a savings vehicle. First, your money is generally stuck in the RRSP until retirement—unless you are willing to pay high withdrawal fees. (I like to know that my money is accessible in some manner.) And, second, the RRSP is simply a tax deferment vehicle until age 71. Once the money is withdrawn, depending on your tax bracket, tax will be due…
Can you have too much invested inside an RRSP?
– moneysense.ca
While not quite up there with outliving your money, for many seniors the idea of dying with too large an RRSP (Registered Retirement Savings Plan) or RRIF (Registered Retirement Income Fund) rankles. Handing over nearly half your nest egg to Ottawa after a lifetime of tax-deferred saving seems to many a case of adding insult to injury.
This problem is particularly severe after the death of the second member of a couple. The death of the first spouse may not be a huge tax problem, since the proceeds of RRSPs and RRIFs pass tax-free to the survivor, assuming proper beneficiary designations were established when both were hale and hearty. But if both members of a couple die with a huge combined RRIF, their heirs may share half the estate with the Canada Revenue Agency.
Mind you, there will be some tax effects once two modest RRIFs merge into one giant RRIF. Odds are the survivor is in a higher tax bracket on their own than when the couple were in lower mid-level tax brackets. Non-registered investments will now be in just one name…
This problem is particularly severe after the death of the second member of a couple. The death of the first spouse may not be a huge tax problem, since the proceeds of RRSPs and RRIFs pass tax-free to the survivor, assuming proper beneficiary designations were established when both were hale and hearty. But if both members of a couple die with a huge combined RRIF, their heirs may share half the estate with the Canada Revenue Agency.
Mind you, there will be some tax effects once two modest RRIFs merge into one giant RRIF. Odds are the survivor is in a higher tax bracket on their own than when the couple were in lower mid-level tax brackets. Non-registered investments will now be in just one name…
