All about Retirement Planning in Canada. Learn the ins and outs and get the latest news.
Latest News
CPP payment dates this year, and more to know about the Canada Pension Plan + MORE Aug 30th
In Canada, no retirement plan is complete without considering the CPP. Whether you’re approaching retirement or still several years away from it, the Canada Pension Plan will likely play a role in your retirement income. How big a role depends on several factors. You may have other questions, too..... More »
How GICs can help you save for your short-term goals + MORE Nov 23rd
Let’s talk about short-term savings. By short-term, we’re talking about putting away money for a few months, or even a few years, for a big goal, like a vacation, a wedding or a down payment on a home. Where should you put your savings so they’ll be secure and work for you?
When saving,.... More »
Timing the withdrawal of RRSP savings to minimize your tax hit + MORE Sep 14th
Q. I’ve been fully retired since 2018, and living only on government pension (QPP, OAS and GIS). I have some RRSP and TFSA investments, and would like some help with determining when I should start withdrawing funds—and whether I will need to pay tax. I’ll be turning 71 in December 202.... More »
Near retirement with no defined benefit pension? Here’s what you need to know Oct 26th
If you’re a typical reader of this column, I’m guessing retirement is on the near-term horizon for you, or already arrived in the form of “semi-retirement.” And if you’ve diligently saved in registered and taxable plans all these decades but lack an employer-sponsored defined benefit (DB) .... More »
Should we draw down my spouse’s RRIF faster? May 30th
Ask MoneySense
My wife is currently drawing $24,000 per year from her RRIF, which has a balance of $510,000. She is also receiving OAS, CPP and a work pension of $22,000. She is 67.
My question is if it would be prudent to start making larger withdrawals to try and reduce the tax that the estate .... 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…
