What time of year should you retire? Sep 7th

Retirement planning getting you down? There are always smart ways to plan the financial aspects of your retirement.

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What time of year should you retire?

– moneysense.ca

Is there a better time of the year to retire based on tax implications: December 31 versus June 30 versus January 30? —Laf

The best date to retire for tax purposes

For most Canadians planning their retirement, tax isn’t the primary factor, Laf. However, there are instances when tax can come into play for choosing a retirement date, as well as other timing and calendar-based considerations.

Tax rate for retiring in Canada

Canadian tax is levied on a graduated basis, with higher income moving into higher tax brackets. Federal tax brackets increase at about $50,000, $100,000, $156,000, and $222,000 for 2022. Provincial and territorial tax brackets vary, and this results in most taxpayers falling within many tax brackets. Only income that exceeds the tax bracket thresholds is taxed at the higher tax rate—not your entire income.

So, I suppose it is possible for someone to decide that being in a certain tax bracket on their next dollar of income is a deterrent from continuing to work in the year they retire…

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