Bil Ioannidis Financial Insights Weekly - Business &Amp; Personal

Making the most of what you’ve got -- retirement tax planning strategies You’ve worked hard, planned carefully, saved and built your wealth – now it’s time to retire and enjoy the life you’ve dreamed about. But to be certain your retirement dreams aren’t pierced by the reality of an eroding income, you need to make the most of what you’ve got by taking advantage of all the retirement tax planning strategies available to you. Here are some basic strategies to help you keep more of what you’ve earned.  Tax credits Retirees can take advantage of a number of federal tax credits (some with equivalent provincial credits) that can reduce the amount of tax you pay. o Pension income credit – Available on your first $2,000 of pension income. Canada Pension Plan/Québec Pension Plan (CPP/QPP) or Old Age Security (OAS) benefits do not qualify for this credit. o Age credit – You may qualify for this credit if you are 65 and your net income is below a pre-determined threshold. o Medical expenses credit – Pooling expenses on the return of the spouse with the lower income can generate a larger credit. o Disability credit – Available to those suffering from a severe and prolonged physical or mental impairment. o Charitable donations credit – Combine spousal donations to earn a higher credit.  Keep your taxable income to a minimum. Lower your taxes and take full advantage of the Age Credit while preserving your OAS benefit. o Split pension income and/or CPP/QPP benefits with your spouse. o Live off capital rather than income. o Withdraw only the minimum from your Registered Retirement Income Fund (RRIF). o Select non-registered investments that offer preferential tax treatment. o Take full advantage of the tax sheltering benefits of your Registered Retirement Savings Plans (RRSPs) by making your maximum contribution for as long as possible – up to the end of the year you turn 71. o Contribute to a spousal RRSP until your spouse turns 71. The benefits of some of these strategies – such as income-splitting – depend on your personal situation and can have unexpected tax implications. There are also many other good strategies for maximizing your retirement income. Your professional advisor can help you decide which strategies will work best for you. This column, written and published by Investors Group Financial Services Inc. (in Québec – a Financial Services Firm), presents general information only and is not a solicitation to buy or sell any investments. Contact a financial advisor for specific advice about your circumstances. For more information on this topic please contact your Investors Group Consultant.