How to go about securing the best return for your investment in Canada.
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When my first child was born in early 2011, I wanted to set up a registered education savings plan (RESP) as soon as possible. My husband didn’t have any student debt of his own, but I’d left university with over $40,000 owing on a line of credit—a huge number that I carried into our marriage .... More »
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Money is something many of us were taught not to talk about. Yet, finances shape everything from whether you’ll have kids or buy a home to when you’ll retire—and nothing kills a romantic spark faster than money stress. In relationships, being on the same page financially isn’t optional, itâ€.... More »
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What to expect from Mark Carney’s fiscal update amid high deficits and rising risks - Toronto Star Apr 26th
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Canadians fear a tougher road to retirement—and plan to help their kids along the way Feb 10th
Canadians are going into this year’s RRSP season in a somewhat pessimistic mood. Two-thirds say it will be more difficult for them to save and invest for their retirement than it was for their parents, according to BMO’s latest Retirement Survey.
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Making the most of the pension tax credit
– moneysense.ca
Ask MoneySenseI liked your coverage of RRIF taxation. I would like to see more information on LIF taxation. More precisely, on the following scenario: Individuals do not get the $2,000 tax credit for RRIF withdrawals before age 65. Did I read properly that for LIF withdrawals the $2,000 tax credit applies to anyone, irrespective of age? Meaning under 65? Should a LIRA be moved to a LIF when the expected minimum withdrawal would be under that threshold? Should LIF withdrawals be recommended for anyone under 65 as a tax strategy? Looking forward to reading your answer.
—Sylvain Bussiere
Hi Sylvain, unfortunately your interpretation is not correct. Converting your locked-in retirement account (LIRA) to a life income fund (LIF) before the year you turn 65 does not qualify you for the $2,000 pension tax credit. Even converting your LIF to an annuity doesn’t qualify you for the pension tax credit at age 65.
Having said that, this tax credit is not a big deal for most people, and in some cases, you will be better off not converting an RRSP or LIRA to a RRIF or LIF to qualify for the credit…
