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Planning for Retirement. Presented By Business Partners www.businesspartners.ca. Retirement doesn’t exempt us from taxation Lets plan so that we will only pay as little as possible. Non refundable amounts 15% fed. & 6.05% prov. =21.05%. Federal – Provinc.
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Planning for Retirement Presented By Business Partners www.businesspartners.ca
Retirement doesn’t exempt us from taxation • Lets plan so that we will only pay as little as possible
Non refundable amounts15% fed. & 6.05% prov. =21.05% Federal – Provinc. • Basic Personal amount $8648.0 - $8196.0 • Age Amount $3979.0 - $4002.0 • Spouse amounts $7344.0 - $6960.0 • Amt for infirm dep $3848.0 - $3863.0 • Disability Amount $6569.0 - $6622.0 • Pension Amount $1000.0 - $1000.0 • Adoption Expenses up to $10,000.0
RETIRING ALLOWANCE Fully taxable when received (regular tax) Consider transfer the eligible amount into an RRSP. It can be done, even if you have no RRSP room available
University Pension • Again fully taxable • Does qualifies for $1000.00 Non-Refundable credit of 15% Fed and 6.05% Provincial for a total of 21.05% marginal tax rate. Or $210.50 reduction in tax payable.
CANADA PENSION • Must apply for it. • If you apply at 65, you will receive full benefits. • Can apply at 60, but there will be 30% reduction in benefits. • Can work until 70, and apply then, and gain 30%. • When you start drawing, you will not pay into it, even if you go back to work. • Can split it with your spouse or common law partners. • If spouse also has CPP, must first pull it together and then split 50% each
OLD AGE PENSION • Also must apply for it. • The first payment will be the month after you turn 65. • If you apply late it will be retroactive up to 11 months back. Taxed the year received. • Must watch for clawback, if net income is over $60806, must pay back part or all of your OAS
OTHER PENSIONS • If you worked in the United States, you may be eligible to receive USSS. • Only 85% of your USSS is taxable in Canada, you do not pay taxes in U.S. on it, and your spouse will receive an additional 50% of your Social Security. • You may also receive other overseas pensions. We do have tax treaty with most countries, and the tax treatment varies for every country.
RRSP/RRIF Can contribute into RRSP up to your 69th birthday, and into a spousal RRSP until your spouse 69th birthday. Savings are at marginal tax rate. • Must convert your RRSP into a RIFF or an annuity by Dec.31st of the year that you turn 69. • RIFF’s minimal amount of withdrawal are spread to age 90. They can also be based on spouse’s age, if spouse is younger. • You must withdraw the minimum amount, can withdraw more if needed. • Withdrawls are fully taxable, at marginal tax rates.
INVESTMENTS • Interest, taxed at marginal tax rate • Dividends, tax at a preferred tax rate • Mutual Funds, or Shares, could generate capital gains, which has probably one of the best rates of tax. • Flow-through shares also have a very good tax rates, but they have a bit higher risk
WAGES \ SELF-EMPLOYMENT Something to consider Part time wages, fully taxable, but will open up RRSP room. Self-employment, good write-offs, will open up RRSP room. Ask us about “Debt Freedom Canada” a good self-employment opportunity.
Thank you for your attention If you have any questions feel free to ask now. Also if you have any other questions at a later date don’t hesitate to contact us by: Phone : 519-971-7355 Fax : 519-971-0160 E-mail: • Pat@businesspartners.ca • Katie@businesspartners.ca Or in person at 125 Tecumseh Rd W.
