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Winter ’18 Should I give my registered retirement income fund (RRIF) to my children while I’m still living?

Dave's Investment Insights Newsletter – Winter 2018

Written by Dave Lee
January 18, 2018

You may be asking “why should my children have to wait until I die to benefit from their inheritance?” Perhaps you see your adult children or grandchildren struggling in today’s economy to afford a down payment on a home or to pay down a burdensome debt. You want to help them out now when they really need it and have the satisfaction of seeing them reap the rewards.

Some people prefer to wait until they die to leave their money. But if you favour a living inheritance, and can afford it, then gifting your children with your RRIF may be an option. Before you decide to do this, however, you need to understand the tax implications, as any amount withdrawn from your RRIF will be taxable.

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Autumn ’17 Tax in Retirement: The Good News

Dave's Investment Insights Newsletter – Autumn 2017

Written by Dave Lee
October 15, 2017

The tax burden in retirement is lighter than during the working years in some important ways. As a result, less total income is required during retirement to maintain a comfortable lifestyle than many people expect. Here are some key factors that can impact expenses and taxes in favour of retirees.

Expenses often decline

  • Payroll deductions, such as contributions to Employment Insurance (EI), Canada Pension Plan (CPP) and union dues end when employment ends. CPP and Old Age Security (OAS) then become net benefits, although both are taxable, and OAS is subject to a claw back above incomes of approximately $75,000.
  • Pre-retirement budgets often include mortgage payments that come to an end, either through making the final monthly payment, or through a downsizing that pays off the mortgage.
  • The financial cost of children generally subsides as they become adults, but not in all cases.

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