DIGGING DEEPER

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DISCLAIMER!  As I look over at my Assistant's "dear-in-the-headlights" expression, I'm going to say to you...

YOUR FINANCIAL ADVISOR IS IMPORTANT!

In last week's email/blog I provided a list of the 13 BIGGEST INVESTMENT MISTAKES Retirees make.  As promised, here's some deeper detail about the first one.
  1. Getting the order of Income Sources wrong:
    • ​​At Retirement, you have multiple sources of income (compared to your work-life - when your paycheque is usually the only source of Income).  Here's an example of those incomes (at age 65)
      • CPP (Canada Pension Plan)
      • OAS (Old Age Supplement)
      • RRSP (Registered Retirement Savings Plan - must be transferred to RRIF no later than age 71)
      • RRIF (Registered Retirement Income Fund)
      • RIF (Registered Income Fund)
        • LIRA (Locked-In Retirement Account)
        • LIF (Locked-in Income Fund)
      • Pension Income (from Employer)
      • Non-Registered Investments
      • Divdents or Rental Income
      • TFSA (Tax-Free Savings Account)

​Here's the thing... while these are the most common sources of income - they are also TAXED DIFFERENTLY!  You want to access income from the least flexible income sources early.  In the list above, that would be the CPP and the OAS.

It's important to remember that each of these Income Sources are taxed (at source) as if they were the only Income Source...HOWEVER (and this is a BIG HOWEVER)

Revenue Canada taxes are "cumulative" - adding ALL SOURCES OF INCOME TOGETHER.

 

Here's an example:  NOTE: the first $13,229 of income = ZERO tax payable

 

 

KEY TAKE-AWAY

 

THE IMPORTANCE OF TAX PLANNING WITH A QUALIFIED FINANCIAL ADVISOR

CANNOT BE OVERSTATED!

LET'S TALK!  Click here for a call or an email.

 

Not ready to retire?  That OK - Let's get the plan started - NOW!  Click here