How to get the pension income tax credit + MORE Feb 17th

Retirement planning getting you down? There are always smart ways to plan the financial aspects of your retirement.
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Why Canada must simplify the tax code + MORE Feb 24th

Aaron Wudrick is the federal director of the Canadian Taxpayers’ Federation. Are you paying all the tax you’re legally required to pay—and if not, is that okay? That’s the question at the heart of the controversy over offshore tax havens, whereby mostly wealthy individuals structure their fi.... More »

Should Pete sell mutual fund to pay down the mortgage? + MORE Mar 24th

Shutterstock Q. I have $103,490 left on my mortgage and I pay $325 bi-weekly on it @2.89% fixed rate (mortgage is being renewed shortly). I have the ability to pay off up to 15% ($18,700) of the original mortgage annually in a lump sum without fees. Should I pull money out of my mutual funds (averag.... More »
 retirement planning

Should I contribute to my TFSA when I’m 68? + MORE Mar 17th

iStock Q. I am 68 years old and already retired. Is there any point in contributing to a TFSA? – Michelle A. Any point? Why yes. There are lots and lots of points. I’ll make a few of them here. The Tax-Free Savings Account is a great vehicle to reduce your taxes whatever your age. You’re .... More »

How to transfer from an RRSP to a TFSA —and why you shouldn’t + MORE Mar 3rd

Flickr When transferring a stock from an RRSP to a TFSA, is there any advantage whether it is in a loss or gain position? Why or why not? – Darryl If you hold a stock in your RRSP and you want to hold it in a TFSA instead, there is no way to simply transfer it from one account to the other. At lea.... More »
Why you have to split work pensions when you divorce
Q: I am now negotiating a separation agreement with my spouse. I do not want to share my teacher’s pension. We have been married 34 years. During our entire marriage, I worked as a teacher, and I worked on the farm, mainly doing all the financial book-keeping and accounting. Along with that, I have managed our investments and provided him (my husband) with a good income. I was never paid for that. Does that give me a reason to decline to share my pension? He has left because he is an alcoholic. He will use it to continue drinking. He has plenty of money to live very well without my pension.
A: Unfortunately, Jeanne, when you are negotiating a separation agreement for a long-term marriage, every asset grown during the marriage is up for grabs. The law is such that, any assets that have grown during the time of the of the marriage, pension included, are used to determine the net family property.
In your case working with a Certified Divorce Financial Analyst (CFDA) could help you determine which assets would be most beneficial to keep…

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How to get the pension income tax credit
Q: I am 65 years old and will have income for the next three years. I want to open a Registered Retirement Income Fund (RRIF) and transfer some money into it to take advantage of the pension credit on a $2,000 withdrawal. While doing so, can I then turn around and use that $2,000 as part of my contribution to my RRSP? In other words, can you withdraw from an RRIF and contribute to your RRSP in the same year?
—Rhonda P.
A: Thank you, Rhonda, for your question. I assume that you do not have a pension—and you didn’t mention the value of your RRSPs. For many, it’s a great strategy to open an RRIF and transfer net $2,000 from your RRSP in order to take advantage of the pension credit. Be sure to transfer a little bit extra to the RRIF so the $2,000 withdrawal does not deplete the RRIF and cause it to close. Your financial institution will advise you on what the minimum amount is to keep the RRIF open. Or you can transfer as a lump sum.
And yes—you can technically withdraw from an RRIF and then contribute to an RRSP—if you have the room and are still under 71 years of age…

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If you’re like many Canadians, you’re hoping you’ve paid enough tax for 2017 and may even be looking forward to a hefty tax refund cheque. You can help ensure that happens by knowing the details of your Registered Retirement Savings Plan (RRSP), what sets them apart, your contribution limit and a whole slew of other things. Here are the basics:
What’s an RRSP
An RRSP is a retirement savings plan that you open at a bank or other financial institution near you. It’s registered by the federal government of Canada, and you can contribute to it up to an annual maximum amount.
What’s special about RRSPs
Contributions to RRSPs are deductible, meaning they can be used to reduce your taxes. Any income you earn in the RRSP is usually exempt from tax as long as the funds remain in the plan; you generally have to pay tax when you withdraw money from the account.

Ten RRSP questions answered »

Who can open an RRSP
If you have earned income, have a social insurance number and have filed a tax return, you can contribute to an RRSP up until December 31 of the year your spouse turns 71…

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RRSP vs TFSA: Where to store your retirement savings—In partnership with Scotiabank—

The post RRSP vs TFSA: Where to store your retirement savings appeared first on MoneySense.

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A guide to having retirement income for lifeWith 1,100 Canadians reaching the official retirement age of 65 every day, there’s a sea of change occurring in the investment world. The move from wealth accumulation is rapidly moving to its opposite, de-accumulation or “decumulation.”
Decumulation is actuary Fred Vettese’s preferred term over “drawdown” and his new book Retirement Income for Life (Milner & Associates, Toronto, 2018) seems destined to become the bible of any new or near retiree challenged with converting large RRSPs and other savings into reliable income.
The only retirees who may not need this book are the fortunate few and increasingly rare members of traditional Defined Benefit (DB) pensions. As Vettese says – the chief actuary for Morneau Shepell Inc. – decumulation is a much trickier act than accumulation. The book covers some ground previously occupied by Moshe Milevsky’s Pensionize Your Nest Egg or Daryl Diamond’s Retirement Income Blueprint but Vettese takes the topic further.
What I like about Vettese’s book is a 5-part strategy involving what he terms “enhancements…

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