What’s involved with an owner withdrawal of cash from a corporation + MORE Dec 7th

Retirement planning getting you down? There are always smart ways to plan the financial aspects of your retirement.
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TFSA contribution room calculator + MORE Jan 11th

Find out your current tax-free savings account (TFSA) contribution limit by using this calculator. TFSA is a bit of a misnomer. While you can use it for straightforward savings, think of it more accurately as an investment holding account to store things like exchange-traded funds .... More »
 retirement savings

First home savings account: A Gen Z guide to achieving home ownership + MORE Mar 29th

Becoming a home owner is a significant milestone that many young adults wish they could afford. More than two in five Canadians (43%) plan to purchase a home in the next five years, and 24% of them have yet to start saving for a down payment, according to a study conducted by The Harris Poll for Ner.... More »

Are Canadian pension buybacks worth it? Jul 20th

Ask MoneySense I am currently transferring my pension from a provincial to a federal government pension plan. I’m trying to determine if it is worth purchasing the balance of service and, if so, should I use my RRSP or TFSA funds. Here’s some relevant info: Service Credited: 7 years, 140 days.... More »

Where should working retirees put extra income: A TFSA or an RRSP? Jan 11th

Ask MoneySense I will be receiving CPP and OAS as of June 2024. I intend on working one more year until I reach 66. My question is: Should I put all my CPP money into an RRSP to shelter it from tax? Or should I pay the tax on it and invest in a tax-free savings account? –Gary Where to put r.... More »
 retirement savings

Can you survive on Canada’s government pension alone in retirement? Experts say you might be surprised + MORE May 10th

Until fairly recently, CPP replaced a quarter of your average work earnings — but it’s already providing more. We asked experts what to do if CPP and OAS will make up most of your retirement income..... More »
I am a widower, turning 71 before the end of the year. I have annual gross income of about $50,000, cash savings of about $500,000 left from the sale of my principal residence and an RRSP of about $1.5 million returning about 8%. I haven’t put anything into my RRSP for about 15 years. I also have a fully paid vacation property valued at $300,000. I am concerned that I will have to collapse some of my very productive investments to cover the government withdrawal rate of 5.28%.

Can I put some of the bank cash into an RRSP now and/or later? I would like to get an annual tax benefit from that deposit, and I’d also want the annual government withdrawals to be paid back to me from that cash (as long as it’s held in a cash position within the RRSP).

As an aside, can I also gift my daughter funds to help her out without her being exposed to any tax from the gift? My health is good but I do think I have enough to take care of myself. I just want to do the best for everything my wife and I worked so hard to save…

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I work as a self-employed IT contractor. I am incorporated. Over the years I have accumulated about $100,000 in my business account, over and above what I need to carry operating expenses. I am about five years out of retirement, maybe less than that if I go for a semi-retired approach. I would like to know the best strategy for withdrawing the money from my business.

I am aware I can pay myself a dividend, but I thought a business had to have earnings in order to declare a dividend. Is that the case? As I am a one-person operation, am I even allowed to declare dividends anymore? I heard the tax laws changed recently.

–Linda

Linda, you have a corporation and $100,000 of cash you have saved. A common mistake by business owners is thinking they cannot invest this money. A corporation can buy guaranteed investment certificates, stocks, bonds, mutual funds, and exchange traded funds. It can work with an investment advisor or open a self-directed brokerage account. A corporation can even buy a rental property or invest in another business…

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