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%
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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
Marginal Tax Rates in Ontario
Additional Health Tax
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 NonRefundable 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
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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:
• [email protected]
• [email protected]
Or in person at 125 Tecumseh Rd W.