![]() ![]() He has several mutual funds constructed to harvest dividend income and a portfolio of U.S. George’s portfolio has an Achilles’ heel, that is, a concentration on stocks that could plummet in hard times. George’s retirement income will exceed his probable spending, even with the additional costs of a shared family life. Moran says.ĭrawing income from his $610,000 of non-registered investments and $37,000 TFSA is not important for the time being. However, given that her income is nearly as much as his earnings, taking a survivor option is not essential, Mr. She will pay most of the costs of raising them and paying for their educations, but she might outlive him and collect his pension benefits for decades. George has to weigh the cost of giving up 100% of his pension, taking 70% to 80% of that amount instead to provide for his wife-to-be. Manitoba currently provides persons over 65 a cash refund of $235 a year, on top of as much as $1,100 a year in property tax credits already available to seniors.īy marrying, he is taking on family obligations, which include the cost of helping raise the two young children. He will then be entitled to share provincial homeowner tax refunds. If George does buy a house with his fiancee, as they intend, then he should be sure to put his name on the title. The minimum distribution rate will climb over time, but her age will provide a discount for decades. He is effectively cutting the initial payout by about half, keeping what is not paid out in the RRIF still growing, paying tax on about half the money he would have had to take without the spouse, and extending the life of his RRIF, Mr. ![]() If he had no spouse, his distribution rate would be 7.48% of RRIF assets. When both are retired, the children will be over 18 and the tax break will vanish.Įntering into a union with his spouse-to-be, who is 13 years younger, offers a significant tax advantage, because he can set the minimum distributions from his Registered Retirement Income Fund on her age rather than his. He would pay more tax, she would pay less. Her earned income of about $100,000 a year will exceed his income but not by much. George could split income when he retires with his new wife to take advantage of the new family tax credit, though the tax savings for these parents of children under 18 will be modest. He started at a much lower income, but the plan is designed to encourage and reward long service, Mr. That’s the result of the common retirement plan, which multiplies 2% of final income, about $120,000 now, by years of service. On retirement, George will have a company pension of about $70,000 a year. This advertisement has not loaded yet, but your article continues below. ![]()
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