oaktree & associates
retirees
You’ve made it to retirement and that can be an exciting transition into a new segment of your life, it's important to ensure that your financial position allows you the freedom to spend time pursuing and enjoying your life's vision, dreams and goals.
At Oaktree & Associates, all of our wealth planning services for retirees are custom tailored to each client's specific vision, wants and needs as we understand that your situation is unique to you. Regardless of what plans you have for the future, our professional wealth management team can provide you with a plan that will allow you the certainty to pursue your goals you’ve worked hard to achieve.
Income Tax Reduction
Just withdrawing your assets in a certain order can help you keep more of your income for yourself.
While the tax implications for each type of withdrawal will vary depending on your individual situation, the general rule of thumb is to use your least flexible sources of income first—like a Registered Retirement Income Fund (RRIF) or Life Income Fund (LIF), which have minimum annual withdrawal requirements. Next, it’s smart to follow with those assets that aren’t as heavily taxed, such as your TFSA (withdrawals aren’t taxed at all) or any non-registered investments (these are only partially taxed).
Expect to be in a higher tax bracket than your spouse or common-law partner in retirement? If you receive pension income, you can reduce your total tax bill by allocating up to 50% of that income to your spouse. The amount of tax savings can vary widely, and it depends on a number of factors—like the difference in your marginal tax rates—but the savings can be significant.
You can also save on taxes by sharing your Canada Pension Plan (CPP) with your lower-income spouse or common-law partner. This strategy is especially helpful if one spouse or partner doesn’t have much work history (and has limited contributions to CPP/QPP).
The Pension Income Tax credit is available to you if you are 55 years of age or older. Basically, it enables you to deduct, from taxes payable, a tax credit equal to the lesser of your pension income or $2,000.00. Depending on which province you live in, this equates to $440-$720 in actual tax savings each year.
The pension income tax credit is non-refundable and may not be carried forward each year. In other words, you need to use it or lose it.