Our annual Tax Tips Guide is here to assist you in your tax planning, presenting some quick ideas and strategies for you to employ.
Pensioners, retirees and pre-retirees
1. Income splitting opportunity: Individuals receiving pension income that qualifies for the pension credit can allocate up to half of this income to their spouse or common- law partner. A determination of the optimal allocation should be considered in tandem with the couple’s continued ability to qualify for Old Age Security payments and certain personal tax credits.
2. An individual’s RRSP must be converted to a Registered Retirement Income Fund (RRIF) or be used to acquire a qualifying annuity by the end of the year in which the individual turns 71.
- An individual who turns 71 in 2019 can make RRSP contributions by the end of 2019, to the extent contribution room is available.
- An individual can continue to contribute to a spousal RRSP until the end of the year in which his or her spouse turns 71, to the extent contribution room is available.
- For 2015 and later years, the Government has introduced a reduction in the minimum amount that must be withdrawn from a RRIF for a holder who is over the age of 71. The new RRIF factors will permit holders to preserve more of their RRIF savings in order to provide income at older ages.