Retirement Planning

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Most of us understand the benefits of sensible retirement planning. Still, it doesn’t feel relatively straightforward when it comes to creating your retirement strategy and putting it into effect. The reality is that, while there are lots of variables to consider, it isn’t as challenging to create an effective plan for retirement as you may think.

Firstly, let’s consider the merits of a retirement plan. Firstly, the plan will aid you in setting clear goals for your retirement, such as the age that you want to finish work and what you want your retirement to look like in terms of lifestyle. Secondly, it will help you establish how much you need to save to have a retirement that meets your objectives. Thirdly, a plan will allow you to choose your investment options wisely.

How you know how much you need to save is a common question. This depends on three factors:

  • Your age. It makes sense that starting to save for retirement when you are younger means that you need to save less money than starting later in life.

  • Benefits available to you. There is a range of federal government benefits that you might be eligible for, such as the Canada Pension Plan or Old Age Security.

  • Your plans for your retirement will inevitably affect how much you need to save to fund it.

If you haven’t started saving for your retirement yet or have less in your retirement savings plan than you would like, take a look at our top tips to accelerate your savings.

  • Make the most of RRSPs and TFSAs to minimize your tax bill and make your money grow faster.

  • Take advantage of any pensions or savings plans that your workplace offers, as your employer’s contributions can add extra value to your fund.

  • Look at your spending habits to identify opportunities to cut back outgoings and save more.

  • Think about putting spare money into your retirement fund.

Taking steps to create an effective retirement plan is a decision that will pay off as you approach later life, allowing you to have the savings for the retirement that you deserve.

Talk to us; we can help.

Essential tips and tricks for paying less tax and keeping more of your retirement income

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Essential tips and tricks for paying less tax and keeping more of your retirement income

Most of your retirement income sources are taxable; Canadian Pension Plan (CPP), your personal pension plan (if you have one) and income from your RRIFs. However, if you’ve set up a TFSA in addition to your RRSPs, then you’re in luck – money you take out of your TFSA isn’t taxable!

We have some tips on combining savvy withdrawal strategies with retirement-related tax deductions to keep more of your retirement income.

Make a Plan

Determine all the different sources of retirement income you’ll have – don’t forget about things like annuities, GICs or income from a rental property if you have one. Once you have a complete list, a professional financial advisor can give you tips on when it’s best to start collecting pension income as well as how much to withdraw from your taxable investments. A strong plan can help reduce the amount of tax you have to pay and extend the life of your retirement income!

Split your pension income

If you have reached the age of 65 and have a pension, you can split up to 50% of the pension income with your spouse. Splitting your pension with a lower-income spouse can add up to savings, as this will cut down on the amount of taxes you’ll have to pay overall.

While rewarding, the process to split your pension income can be complicated, so it’s best to get professional advice before starting this process.

Buy an annuity

Annuities are a financial product that will provide you with a guaranteed regular income – a good choice if you are worried about your retirement savings running out.

These are the most common types of annuities:

  • Life annuities provide you with a guaranteed lifetime income, with the option for the annuity to be paid to a beneficiary after you die.

  • Term-certain annuities provide guaranteed income payments for a fixed period. A beneficiary or your estate will receive regular payments if you die before the term ends.

  • Variable annuities will provide you with both a fixed income and a variable income. The variable income will be based on the return of the annuity provider on the performance of the investments your annuity provider invests your money in.

All types of annuities will spread out the income from your retirement savings to lessen the tax you pay each year.

Take advantage of tax breaks

Now that you’re retired, there are retirement-related tax breaks you need to know about. Here are some of the tax breaks or credits you may be eligible for:

  • The age amount

  • The home accessibility tax credit

  • The medical expense tax credit

  • The disability tax credit

  • The pension income tax credit

We can help!

We can put together a plan that helps you keep more of your retirement income – call us today!

Apply starting Friday for Canada Emergency Student Benefit! Help on the way for seniors.

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Students can apply for $1,250 through the Canada Emergency Student Benefit starting Friday

From canada.ca:

“The Canada Emergency Student Benefit (CESB) provides financial support to post-secondary students, and recent post-secondary and high school graduates who are unable to find work due to COVID-19.

This benefit is for students who do not qualify for the Canada Emergency Response Benefit (CERB) or Employment Insurance (EI).

From May to August 2020, the CESB provides a payment to eligible students of:

  • $1,250 for each 4-week period

  • $2,000 for each 4 -week period, if you have dependants or a disability”

Learn More and Apply for CESB

Seniors to receive up to $500 one-time payment

The Government of Canada will be providing help to vulnerable seniors by providing a one-time tax-free payment of $300 for seniors eligible for Old Age Security (OAS). For seniors eligible for the Guaranteed Income Supplement (GIS), they will receive an additional $200.

Learn More about Help for Seniors