How will a pension buyback impact your income tax return? + MORE Apr 7th

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An easy guide to income splitting for seniors Apr 14th

Q. My husband and I are both retired. He still has income from his business, and I have cashed in all of my RRSPs but one. My question is: Can Hubby cash one of his RRSPs (and pay taxes, of course), but then turn around and buy a spousal RRSP for me? Would that be worth doing? Then I could cash this.... More »

Can you make a transfer from an RESP to a spouse’s RRSP? Sep 1st

Q. I have an RESP account that I plan to wind down—and I have very little RRSP contribution room, but my wife has quite a lot. I just read this article you wrote for MoneySense about transferring money from an RESP to an RRSP. I thought it was permissible for a subscriber (that would be me in this.... More »

Avoiding future interest is one way to look at your return on investment May 12th

Q. I’m 47 years old and, after suffering a personal injury, have just been awarded a medical pension of $400 per month. The money is indexed annually and payable for life. I can opt for a cash-out and receive $120,000 upfront, but I’m unsure which is the smarter option. My mortgage renews in 202.... More »

How to avoid tax-payment nightmares when RRIF withdrawals start Sep 29th

One thing salaried employees take for granted is the automatic deduction of taxes “at source.” They receive their regular paycheque with “net” or after-tax deposits that go directly into their bank accounts. The consolation is that come tax time there should be no unpleasant surprises in the.... More »

UFC Notebook: Cormier undecided on retirement after loss - TSN Aug 18th

UFC Notebook: Cormier undecided on retirement after loss  TSNLeading up to UFC 231, Daniel Cormier acknowledged that facing Stipe Miocic in a rematch for the UFC heavyweight title was a high risk proposition. With the ...View full coverage on Google News.... More »
Q: I’m 81, single, female, with around $265,000 in a RRIF (invested in two different financial institutions, both mutual funds).  My withdrawal is about $12,000 a year.
How can I minimize tax payable (by my beneficiaries) at death?
— Lydia
A: The tax savings and deferral from contributing to a Registered Retirement Savings Plan (RRSP) can be a good thing. But in retirement, and on death, the tax payable on withdrawals from a registered account is an important tax and estate consideration.
As you may know, Lydia, a Registered Retirement Income Fund (RRIF) can be left on your death to a surviving spouse or common-law partner on a tax-deferred basis. In certain instances, a RRIF can also be left to a financially dependent child or grandchild. They must live with you, be dependent upon you, and have an income below the basic personal exemption in the year of your death. If these conditions apply, some or all of the value of your RRIF can be taxed on their tax return instead of having all of it taxed on your tax return…

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Q. I plan to do a pension buyback for my service with the Government of Canada. Can I deduct the lump sum payment from my total income if I fully pay the amount at once? And will the total income reported on my T4 be reduced if I choose to deduct a certain amount from each pay stub? Looking forward to your reply. Thank you.
— Alice
A. You’re asking about how your pension buyback will impact your yearly income tax return. Great questions!
First, some background: As a participant in the federal government’s defined-benefit pension plan, public sector employees accumulate years of “pensionable service,” which build credits toward an eventual retirement pension.
Then, at retirement, your total pensionable service is used to calculate your pension benefits. This total can include current service (all of the full and partial years you’ve worked while enrolled in the pension plan you’re retiring from), service that you’ve transferred from one plan to another (if you switched jobs and were able to take your pension with you to your new job), and service you have “bought back” to cover a period when you were not contributing to the pension (such as during maternity or parental leave, for example)…

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Why you might want to avoid using your RRSP to buy a homeThe Liberals have raised the amount you can borrow from your RRSP to buy a home, but there are costs, writes Gordon Pape.

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