Відео

Thank you!

Do you have any other income from RRSP/RRIF? Employment? Investment income?

@@adviice_ca no....was working part time until last March when I had a heart attack, then subsequent bypass surgery

Sorry to hear that, hope things are better now! Use this OAS/GIS calculator… estimateursv-oasestimator.service.canada.ca/en

@@adviice_ca Thanks....doing better, it's amazing how much better you feel with clean arteries......also thanks for the info

Yes, we have survivor scenarios that automatically explore shorter life expectancy. You can enable them by activating those AI Strategies. Every projection includes stress testing over 100+ years of historical stock returns, bond returns, and inflation rates.

Maybe, maybe not, but one thing is certain, for many people CPP is critical part of their retirement plan.

Your post is a scam

Correct, no contributions to CPP2 means no benefit. Only if you had some part-time employment income would it be a factor.

​@adviice_ca ok. I did a bit of part time/ full-time mix over the last 6 years.

You’ll get a small amount of CPP2 then from the “First Additional” benefit.

​@adviice_ca thank you for the replies

Great! Hope you like it!

Fantastic! Thanks for your patience as we finalized this new feature, it took a bit longer than expected but we’re looking forward to everyone’s feedback.

As much as it’s possible anyway :)

Even if you weren’t forced to withdraw there would still be tax planning issues, those withdrawals would still be taxable in the future.

@ Well i would rather withdraw money 20 years from now than now. I’d rather pay tax on something in the future than have nothing to pay tax on.

Good question, the CPP estimate from Service Canada assumes you keep working at your average rate of earnings right until the CPP benefit starts. It also doesn’t include future CPP enhancement. So if you’re retiring early, before age 65, if you plan to defer CPP, if you have more years before retirement and you’ll be contributing to CPP enhancement (CPP2) then your Service Canada estimate could be significantly higher or lower in reality. We’re talking about a few thousand per year in some cases, so it can have a big impact.

@@adviice_ca Thanks, so how do you get real numbers.

@@adviice_ca I should say I am 65

@@adviice_ca Thanks for the reply- So I just turned 65 two months ago. So is it what I would get when I log into service canada website? Or can it be less then they say?

For most people with a principal residence it’s less of a problem because there is a large asset to tap into and provide income in late retirement, for renters it’s a bit more of a concern, but even then, the Globe and Mail previously reported that the average stay in a long-term care home was only 18-months, some longer, some shorter, but it was mostly for end of life care.

Which “new money” are you referring to?

Yes absolutely! In this particular example there wasn’t an opportunity to draw out the Group-RRSP pre 64, and RRSP contributions weren’t required because CPP was delayed and TFSAs were used from 65-71, so no taxable income to clawback GIS.

Good question. Yes the new corporate module will let you do a corporate dividend meltdown automatically.

@@adviice_ca Thank you; is that module available now?

Not quite yet, but in early January, we didn’t want to deploy it right before the holidays.

Actually, starting CPP at 60 is often a good strategy when there is the possibility of GIS benefits in the future, every situation is different, so in the example we shared it was unique in that there was still a large RRSP at 65 but often it’s better to melt down the RRSP before age 64.

@@adviice_ca Thanks I will be sharing this info with him to talk with a planner to model it out as I still think it would be better to recognize the RRSP income over a shorter period and then re-invest into TFSA. Then at least after that point he would qualify for GIS... currently I believe his plan is living on about $2100/mth. $600 CPP, $727 OAS then about $750/mth RRIF. If he took income up to 53K or 57K his marginal tax rate would be 25.5-27.5% and his RRSP would be deregistered and a good chunk of it could be in TFSA in 3-5 years. At that point he would definitely qualify for GIS but just have to get him to do the work and have someone run the numbers. Very informative video and timely as I did suggest he look into GIS about a month ago after a discussion on income and withholding taxes.

Mmm, yes, definitely speak with an advice-only planner. Their current plan with $750/month in RRIF withdrawals is causing an extra $375/month in GIS clawbacks. They’re losing $4,500/year doing it that way.

Thanks for the comment! We’ll have more videos about low and moderate income retirement planning coming soon so make sure to subscribe. This is a fascinating area of retirement planning because the strategies for low and moderate income retirees are often the opposite of those for higher income retirees.

Good question! Aiming for a 100% success rate is very conservative, it means that in 100% of historical periods (even terrible ones like the Great Depression) the plan is successful, but it also means that 100% of the time there will be an estate left over, sometimes a very large estate. It’s all about balance, some people want to spend more now rather than leave a large estate. They’re comfortable aiming for 80% success rate because it means they can spend more now. They’re comfortable decreasing spending if they happen to end up in the Great Depression again. In the video example they downsize to a $600,000ish house from a $900,000ish house. Yes we can do some single videos, any particular scenario in mind.

@adviice_ca Thanks for taking the time to explain the success rate meaning on your platform. It's definitely different from other financial planning platforms where the goal is to get close to 100% as much as possible. How do you determine the success rate for each person then? And if someone is comfortable with their plans failing 20% of the time, how should they prepare for that? As you know being single means that you can't benefit from income and pension splitting that couples have. That also means in most cases having to retire with more money. I haven't watched all your videos yet but I just noticed you mainly do scenarios for couples when more people are retiring as single people now. I think it'll be good to do a video showcasing a single person retiring and maybe compare that to a couple retiring and wanting the same level of income. Just suggestions ☺️

So when those other platforms show retirement being “100% funded” it actually means the plan has a 50% success rate. They typically just do a straight line drawdown without any investment variability or inflation rate variability. So in reality those plans will fail half the time. A few bad investment years in early retirement will have a big impact on a retirement plan but those other platforms don’t take that into account (or it’s in a separate analysis that they don’t showcase). Yes we can definitely showcase some single retirement plans in the future.

@@adviice_ca they actually use the term success rate, not funded. Maybe they are not referring to the same thing still. Thanks for clarifying. Looking forward to the scenarios for singles ☺️

Ah, it’s never quite so simple with GIS, every situation is unique. There are often other income sources like RRSP/RRIF withdrawals, employment income (which has exemptions and partial exemptions), non-reg income like interest, dividends, capital gains. CPP is typically not the maximum (rarely is, even for high income earners). Lots of factors impact GIS planning.

That’s a good question, the platform doesn’t “back into” a savings rate, instead it is driven by spending, so you would lower your pre-retirement spending, giving the platform more cash flow to invest during the accumulation phase. You would probably choose to carry that spending reduction forward into retirement (if your core spending is lower pre-retirement it’s probably safe to assume that core lifestyle continues after retirement). If you did that then the platform wouldn’t need to draw as much after retirement. It’s easy to do once everything is set up, you can just add a spending reduction to all years in the Planning > Projection table.

Thanks for the quick response. So I guess it’s just a matter of trial and error and playing with the spending amounts pre retirement to increase savings rates and determine success rates from there. Does that make sense? Also does the platform automatically take excess cash flow and invest the difference? Does it recommend for you what accounts you should be investing the funds in such as RRSP, TFSA, non reg, and possibly CCPC once that roles out?

Yes there are “Accumulation Order” AI Strategies that automatically test Registered vs TFSA vs Non-Registered accumulation order.

Lots of lower cost investment options, it’s not necessary to pay 2%+. If you have $250,000+ then there are options in the 1.25% range or lower, if you have $1,000,000+ then you have many options around 1.00% or less. Speak with an Advice-Only Financial planner, they don’t sell products or manage investments, they are completely unbiased, ask them to help review your situation.

Every situation is different, the 80% success rate means that in 20% of the worst historical periods there would be a spending reduction required to avoid running out of money, but in 80% of historical periods there will be a surplus at the end of retirement. We like the idea of spending guardrails, with this 80% success rate being a good lower spending guardrail. Then additional spending can be added to model an upper spending guardrail. This webinar includes retirement spending guardrail examples… ua-cam.com/video/lJYdM_EesS0/v-deo.html

Good eye! You got it, the RRSP Meltdown takes priority and fills up the 1st tax bracket, then the drawdown order comes in and fills out the rest of the required after tax spending, first from Non-Reg then TFSA. This helps take full advantage of the lowest tax bracket, but lets the platform automatically draw from other income sources after.

@@adviice_ca Thank you, these video are super helpful in understanding the application and becoming more proficient in developing a solid decumulation plan via the application. I love applying various strategies against base copies to test things like income/expenditure bumps, death of one or the other spouses at different ages and ability to deal with unexpected expenses. The app really helps develop a very high confidence and comfort level with the overall plan and our ability to deal with life curve balls which may come our way throughout retirement. This application, because of a deeper understanding of the numbers (knowing what is included and excluded) along with applying different scenarios is very beneficial and supports more meaningful drawdown conversations with my advisor.

Good question! DCPP is a type of pension but it’s different than a defined benefit pension. If you already have an Adviice account, go to the Community link in the left nav, post an anonymous question to the group and the team will help. You can also use the Help Resources linked in the left nav.

No unfortunately it would not.

they take the minimum out so you have the funds in pocket to live. you can fill out a tax form and hand to your employer to have more taken off, doing so every year after tax season, to have more taxes taken off but if you don't then it's the minimum off.

Good question! The AI Strategies are scenario specific. So you can test different decumulation options, survivor scenarios, RRSP Meltdown etc and compare them in one scenario vs the other.

@@adviice_ca Thank you for quick response - appreciate it.

You may be automatically enrolled in GIS but it’s best to speak with Service Canada about your GIS benefit and if you qualify.

True, people are very adaptable when they need to be. But it is difficult to change spending habits, so the question is, can THEY retire without severely reducing their spending or lifestyle.

Glad you enjoyed it!

Thank you!

Thank you!

We do not have a specific QPP calculation yet. But you can override the platform if you have a detailed QPP estimate.

OAS clawback is a Tax on success. If you were successful in life and made a good living you paid a lot of tax on that money. Instead of a clawback maybe you should get a tax break. If everyone gets OAS it should be a flat payment for everyone. If it's not, it's not fair. If that's the case, get rid of OAS entirely..no one gets it.

Yes. Much easier to hit the OAS clawback as an individual. For a couple, with income splitting, it requires a significant amount of retirement income.

It seems a lot of people ignore the SECURITY in OAS. If you don’t need it ……. But, I do agree, couples have more opportunity to avoid it

​@James_48 the SECURITY of OAS???

@@garth217 _IN_ OAS, as in the function of OAS is to improve the security of people in their later years. It's a social program for those that _need_ assistance. I don't have a problem with strategizing to avoid OAS clawback - but it's not a tax on success. I won't begrudge OAS clawback - I expect programs like OAS to direct the funds where they are needed the most. In fact, I would be in favour of broadening GIS and funding it with an increased rate of clawbacks.

Thanks so much!

Thank you! We love to hear that!

Yes, OAS clawbacks aren’t extremely common. The typical situation we see when working 1:1 with clients is when someone started in private sector but switched to public sector in their 30’s. They might have 30-years of service with their pension, plus RRSP contributions from their 20’s that have grown for 30 years. Pair that with a partner who also has a good income or good Defined Contribution Pension Plan and it can result in a lot of registered/pension income. Still though, hitting OAS clawbacks as a couple is rare, much more common for an individual or a surviving partner to hit OAS clawbacks.

​@@adviice_ca I pension split with my wife so that certainly helps. I'm still not sure that in your comment above that folks in their 20s then switch to public sector.. I started saving for retirement at 28. I don't really know many 20 year Olds who started investing in their 20s..some may have bought a house but it's not realistic to be doing both

@@adviice_ca There are 100's of thousands of Canadians who would have all of their OAS clawed back. I know of a cohort of 10's of thousands myself (based on my career network). It would not be uncommon at all, but on a percentage basis of the retired population, the overall % figure is obviously not that large relative to those that don't.

Did you pay into CPP?