How to go about securing the best Retirement Plan in Canada.
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Should I draw down my RRIF to avoid estate taxes? + MORE Apr 25th
Ask MoneySense
Is it a good idea to withdraw more money monthly than one needs from one’s RRIF? What about beginning a regularly automated transfer of this extra money to one’s non-registered investments so that there is less money in the RRIF account upon death? As a result, the estate will be .... More »
Can you have too much invested inside an RRSP? + MORE Dec 9th
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 ma.... More »
How retirees can use TFSAs to save on tax + MORE Nov 25th
The Tax-free Savings Account or TFSA is in my view the single most powerful investment tax shelter available to Canadian investors. Young people should move heaven or earth to maximize the annual $5,500 contribution as soon as they turn 18—even if they have to solicit a “matching” contribution.... More »
When is the best time to start taking your CPP payments? Apr 13th
For retirees or near-retirees who lack traditional employer-sponsored Defined Benefit pension plans, the federal government’s Canada Pension Plan (CPP) and Old Age Security (OAS) are the closest most of us will get to such a valuable pension.
True, RRSPs and TFSAs do allow you, in a tax-effective .... More »
RRSP deadline: A procrastinator’s guide + MORE Feb 24th
The March 1 RRSP deadline is fast approaching. When it comes to last minute RRSP planning, however, nothing surprises Michael Berton anymore. The Vancouver-based CFP has seen people dump cash in their accounts at the last second or invest in something unusual because they were pressed for time. He.... More »
Chicago Pension Nightmare
– online.wsj.com
A court nixes reform. Maybe the mayor should try bankruptcy.Corporate class investment funds to lose key advantage
– moneysense.ca
OTTAWA – A key tax advantage for corporate class investment funds is coming to an end later this year under a change announced in the federal budget.
Ottawa is ending the ability for investors to switch between funds in corporate class investments without paying tax on capital gains.
However, the new rules give corporate class fund investors a chance to make any changes under the old rules until the end of September.
“For investors, the encouragement is a call to action and a call to action prior to September of 2016 to review your portfolio to make sure you make use of your corporate class investments prior to the changes kicking in,” said Tony Salgado, manager on tax and estate planning at Investors Group.
“This is going to apply to a lot of senior investors and people that wanted to make use of the corporate class structure.”
3 ways the federal budget will affect investors »
Corporate class funds had been used by investors who had already maxed out their RRSP and TFSA contribution limits as a tax efficient way to invest…
Ottawa is ending the ability for investors to switch between funds in corporate class investments without paying tax on capital gains.
However, the new rules give corporate class fund investors a chance to make any changes under the old rules until the end of September.
“For investors, the encouragement is a call to action and a call to action prior to September of 2016 to review your portfolio to make sure you make use of your corporate class investments prior to the changes kicking in,” said Tony Salgado, manager on tax and estate planning at Investors Group.
“This is going to apply to a lot of senior investors and people that wanted to make use of the corporate class structure.”
3 ways the federal budget will affect investors »
Corporate class funds had been used by investors who had already maxed out their RRSP and TFSA contribution limits as a tax efficient way to invest…
Budget winners and losers: Watch out for clawbacks
– moneysense.ca
It’s reasonably common knowledge that higher wealth accumulators in Canada will want to do some extra planning to avoid the 33% high income tax rate in the terminal return of the last surviving spouse. This is generally accomplished by averaging in their taxable pension amounts throughout retirement, if possible.
However, a sharp eye on marginal tax rates is important in this activity, because clawbacks of the Age Amount and Old Age Security can make income averaging opportunities challenging.
In fact, when you ask the question, who pays the highest marginal tax rates in Canada, you might be surprised to know it’s not always those whose income exceeds $200,000. The answer depends on the type of income sources and also depends on whether the taxpayer is subject to a clawback of social benefits and credits.
Let’s see how clawbacks affect seniors and investors in 2016 under various scenarios.
In the first, seniors are subject to clawbacks of the age amount, the GST/HST Credit and the Old Age Security at various income levels…
