Just a word of warning about delaying OAS. My OAS payments were to start automatically at 65, as per Service Canada mail I received. I decided to postopne the payments, it was easy, just select that option in “my Service Canada” online account. However, to recieve the OAS payments at a lter date, you have to apply for OAS and the application is no joke to fill out. You will need original copies of marriage certificate, if married, proof of date when you became landed immigrant (if not born in Canada), etc. Plus, it can take up to 5 months to approve your application. Government doesn’t tell you this when you conveniently postpone your OAS with a couple mouse clicks!!!
Here we are in Mar '24 and thought I would revisit this video and, sure enough, picked up on the $2K idea that didn't matter as much 9 months ago. Now iit matters. You just saved me my marginal rate x $2K!
Another variable/aspect is your life expectancy e.g. a stroke 4 years ago and a pacemaker last December; enjoy life/retirement while you are still here/around eh! :)
D3 K2 B12 lipo somal vitamin C check with your pharmacist Make sure you aren't deficient. Ubiquinol bioavailable coenzyme Q10 .good vibes are being sent 🎉🎉🎉🎉
Another well well constructed and informative video, thanks Adam! A suggestion for future video could be a more detailed analysis showing why postponing OAS benefit isn't as advantageous as CPP postponement (or maybe why you should postpone OAS as well). I understand that there is the 0.1% difference, but in many of your videos (or at least the ones I've seen...and I've seen most of them...LOL) you always recommend taking OAS at 65 instead of waiting to get the 0.6%/month benefit (assuming fully retired to mitigate claw-back). Cheers.
Another informative video Adam Couple questions though. Assume a DB uses the pension income credit so RIF/LIF strategy is moot in those cases? Also, assuming no cpp disability, no child years, etc, if I look at my CPP amount at 65 and know I will retire at 60, is there an easy way to figure out what my real CPP amount will be from 65 - 70?
The $2000 RRIF withdrawal pension income tax credit part raises more questions than answers. Statement is made in video "withdraw $2000 every year tax free". No, RRIF withdrawals are fully taxable. Statement is made in video that the tax credit is applied at your marginal rate with example of 50% marginal rate getting $1000 deduction. No, the federal tax credit rate is 15%, so you won't get any more than $300 for the $2000 pension income. Am I missing something?
Thanks, Adam. if you want to take the 2K tax free from a RIF, all you need to do is transfer the 2K per year and no need to transfer a big chunk from the RRSP account.
I was told by a Services Canada rep that the CPP is going to develop a tier system for different income levels. The higher your income level, the higher your CPP deduction could possibly be, resulting in a higher payout when you begin to collect CPP. A rather smart strategy on the part of the CPP when the possibility exists that some contributors won’t live many years after turning 65. Interested in feedback.
Hi you say if i wait to collect CPP i get .7 percent more per month, i remember back in 2006 to 2016 everyone's CPP was reduced by 36% over a ten year period if you were not colleting it and in 2017 forward it would come back to you over a ten year period so this .7 percent i believe is part of the pay back ? and not a bonus for waiting longer !!. I do remember the 36% reduction ,do you have knowledge of this !
The $2000 only gets you a 15% refund though doesn't it? So kf you are in a 50% tax bracket you only get a $300 redund, not a $1000 refund right? Please confirm, that's awesome if I'm wrong, but i think it's just a 15% tax credit.
Here is Rules for RRIF withdrawals: You must start taking withdrawals the year following the year you opened your RRIF. You can choose your withdrawal amounts as long as you make the minimum annual withdrawal, which is a set percentage determined by the government. As you get older, this percentage increases. You cannot just take out $2K each yrs you must take out the minimum amount, and if you are in higher income like he said oodles of money that will put you in a higher tax bracket. But I agree you have to start taking it out sometime. And you must roll RRSP into RRIF by December of yr you turn 71. And start getting MA the next yr.
My wife got a letter last year from Service Canada (she turns 65 this year) stating that she will have to apply for OAS. Apparently they don’t have all the info needed to start her OAS automatically when she turns 65. Don’t know why that is as she has lived all her life in Canada and had T4 income all her life till she retired at age 56. Works for us as she will be deferring OAS so we can aggressively draw down our RRIF and avoid Clawback.
Just tell her to slap her money into something that produces no income like gold or silver bars. If y8u haven't parked money offshore yet this maybe your only option. You could also allot money to your heirs early since a gift tax is a real p[ossiblity in the future.
Hi, on OAS, I'm a naturalized Canadian citizen and will have lived in Canada for 10 years by age 65. I'm 61 now. I had also lived in the USA for 20~ years altogether and quite a few years in Taiwan after age 18. So when I receive the OAS letter at age 64, will Setvice Canada count those years and how do I let Setvice Canada know about those years? Thank you.🎉
Hello Adam I have RRSP I want to switch to RIPF I'm goin 65 yrs old this year month of July how much the limit widraw how can tke 65 yrs old thank Adam 😊
You recommend for people to update their CPP pension eligibility amount and reach out to Doug Runchey. Doug is a wonderful and very knowledgeable pension consultant, but of course he charges, and should charge money for his service. I would recommend one calls Service Canada, the CPP and OAS Call Centre to receive the same information for free. The only difference is that Doug might be able to recommend if one should take their CPP pension earlier or later and the SC officer will only provide the information and can calculate the break even point.
At 5:14 it's states that you have the option to go into consulting and not pay into CPP. As I understand it, when you are self employed you must pay double the CPP since you must also pay the employer portion. Please clarify this statement when you have the chance.
but you will pay CPP on self employed income (both the employee and employer portion) if you work as a consultant unless you pay to create a corporation and pay yourself dividends. Lots of other considerations would go into the decision to incorporate though....@@GT-tm1ft
I'm a little bit confused by your information about the "pension credit". Pension credit is a non-refundable tax credit and it's worth the same amount regardless which tax bracket a taxpayer is in. If one lives in BC, as I do the "pension credit" is worth 15% of 2,000 (federal credit) and 5.06% of 1,000 (BC credit) to a total of $350.6. Therefore nobody will save $1,000 if they withdraw $2,000 from their RRIF.
This was super wise to discuss this topic. I was actually wondering if I covered all that I need to consider in prep for 65. Adam, thank you for giving us all the heads up....keep topics like this on your radar if this topic needs to be covered for other age groups. Awesome! 👍💯🙏🇨🇦
@@ParallelWealth Hey, Adam, Prince Edward Island in the house....Spring is here and the clean up from hurricane continues after a welcomed quiet Winter....time to reve up our engines again and continue with restoration from Fiona hurricane. Keep up the great work you are doing in helping so many of us!💯👍☺🇨🇦
Hi Adam, So We are early 60s, we finally topped our tfsa, we have no other investments or rrsp etc. At our age, where should we throw our $$ at? I think we are, at second quarter 2023, about 10k$ sitting uselessly in our checking accounts. Where should we put that $$ to work for us??? rrsp seems dumb, I mean if we could we would retire now!
I have a request/question? The CPP bridge on a Db pension? The details please? I thought is was so you could wait and get CPP at 65 with no penalty. I am hearing different things about it though. Can you do a video about it please. Thanks! Great videos too. ;)
After my stroke in 2019 I applied to Revenue Canada Agency for 'disabled' designation so no income tax owed on my CPP Disability payments and subsequently CPP when I become 65 years old. I will then also withdraw some mony from my RRSP eh
Sorry to hear about your stroke! I hope you are okay!! CPP Disability is taxable (its a taxable benefit) but they don't take deductions for tax off your pay because its handled when you file your income tax return. Depending on your income level and tax bracket, there may or may not be tax owing ... just keep that in mind when you start to withdraw money from RRSP's.
@@ambitiousunorthodox I am grateful to be relatively OK thanks; yes RRSP withdrawls will be maybe $300-400 per month so unlikely to owe income tax due to my disability deduction
Good question Doug Lacoursiere! Your question caused me to wonder how an inheritance could affect people that are disabled collecting CPP disability and/or long-term disability. Even if inheritances are tax free (from CRA perspective), I wonder if CPPD or other services from public funds (like welfare) could be affected from an inheritance. Thank you for raising this question and something I definitely want to look into myself.
It all depends what kind of assets will you inherit. For example: if you inherit their RRSP/RRIF it will be taxed on their final tax return which could be a lot of tax. On the other hand it will not affect your benefits (GST Tax Credit, GIS, etc.) This subject is very complex.
@@alicjap3482 That's interesting and seems so wrong ... to tax the deceased upon their death when they chose to maintain the RRSP prior to their death. I think beneficiary(ies) should have the choice to maintain the RRSP (transfer to their own names) or cash it out.
@@mingfranks460 you are right. I can use it before 65 but it’s only 15% of $2000 so max $300 per year not based on your actual tax bracket like Adam said.
Some people have a difficult family/home life and feel a sense of relief to go to work and escape that for a small portion of their day, even if/when their Employer is a jerk. Just depends on circumstances. But if/when the Employer or employment situation is amazing, I can imagine that would be surreal.
Thank you for another helpful and informative video Adam. Assuming you are not at risk of OAS clawback from 65-70, at what age would the benefit of deferring OAS till 70 be realized?
Just a word of warning about delaying OAS. My OAS payments were to start automatically at 65, as per Service Canada mail I received. I decided to postopne the payments, it was easy, just select that option in “my Service Canada” online account. However, to recieve the OAS payments at a lter date, you have to apply for OAS and the application is no joke to fill out. You will need original copies of marriage certificate, if married, proof of date when you became landed immigrant (if not born in Canada), etc. Plus, it can take up to 5 months to approve your application. Government doesn’t tell you this when you conveniently postpone your OAS with a couple mouse clicks!!!
They need to make OAS and CPP tax free benefit.
Or at least get rid of the clawback on OAS.
I agree with you we payed our tax while working why do we need pay now I can’t understand that.
Here we are in Mar '24 and thought I would revisit this video and, sure enough, picked up on the $2K idea that didn't matter as much 9 months ago. Now iit matters. You just saved me my marginal rate x $2K!
I’m supposed to have a Financial Planner???? I knew I should’ve taken that left turn at Albuquerque!
Another variable/aspect is your life expectancy e.g. a stroke 4 years ago and a pacemaker last December; enjoy life/retirement while you are still here/around eh! :)
D3 K2 B12 lipo somal vitamin C check with your pharmacist
Make sure you aren't deficient.
Ubiquinol bioavailable coenzyme Q10 .good vibes are being sent 🎉🎉🎉🎉
$2000 pension credit only applies to one, either an rrif or lif and not both
Another well well constructed and informative video, thanks Adam! A suggestion for future video could be a more detailed analysis showing why postponing OAS benefit isn't as advantageous as CPP postponement (or maybe why you should postpone OAS as well). I understand that there is the 0.1% difference, but in many of your videos (or at least the ones I've seen...and I've seen most of them...LOL) you always recommend taking OAS at 65 instead of waiting to get the 0.6%/month benefit (assuming fully retired to mitigate claw-back). Cheers.
Another informative video Adam Couple questions though. Assume a DB uses the pension income credit so RIF/LIF strategy is moot in those cases? Also, assuming no cpp disability, no child years, etc, if I look at my CPP amount at 65 and know I will retire at 60, is there an easy way to figure out what my real CPP amount will be from 65 - 70?
The $2000 RRIF withdrawal pension income tax credit part raises more questions than answers. Statement is made in video "withdraw $2000 every year tax free". No, RRIF withdrawals are fully taxable. Statement is made in video that the tax credit is applied at your marginal rate with example of 50% marginal rate getting $1000 deduction. No, the federal tax credit rate is 15%, so you won't get any more than $300 for the $2000 pension income. Am I missing something?
Thanks, Adam. if you want to take the 2K tax free from a RIF, all you need to do is transfer the 2K per year and no need to transfer a big chunk from the RRSP account.
I was told by a Services Canada rep that the CPP is going to develop a tier system for different income levels. The higher your income level, the higher your CPP deduction could possibly be, resulting in a higher payout when you begin to collect CPP. A rather smart strategy on the part of the CPP when the possibility exists that some contributors won’t live many years after turning 65. Interested in feedback.
Hi you say if i wait to collect CPP i get .7 percent more per month, i remember back in 2006 to 2016 everyone's CPP was reduced by 36% over a ten year period if you were not colleting it and in 2017 forward it would come back to you over a ten year period so this .7 percent i believe is part of the pay back ? and not a bonus for waiting longer !!. I do remember the 36% reduction ,do you have knowledge of this !
The $2000 only gets you a 15% refund though doesn't it? So kf you are in a 50% tax bracket you only get a $300 redund, not a $1000 refund right? Please confirm, that's awesome if I'm wrong, but i think it's just a 15% tax credit.
It's at 1:31 when you mention it in the video
If you defer the OAS does mean the Ontario Drug Benefit is deferred as well? 🤔
Go on take the money and run🎶
Here is Rules for RRIF withdrawals: You must start taking withdrawals the year following the year you opened your RRIF. You can choose your withdrawal amounts as long as you make the minimum annual withdrawal, which is a set percentage determined by the government. As you get older, this percentage increases. You cannot just take out $2K each yrs you must take out the minimum amount, and if you are in higher income like he said oodles of money that will put you in a higher tax bracket. But I agree you have to start taking it out sometime. And you must roll RRSP into RRIF by December of yr you turn 71. And start getting MA the next yr.
My wife got a letter last year from Service Canada (she turns 65 this year) stating that she will have to apply for OAS. Apparently they don’t have all the info needed to start her OAS automatically when she turns 65. Don’t know why that is as she has lived all her life in Canada and had T4 income all her life till she retired at age 56. Works for us as she will be deferring OAS so we can aggressively draw down our RRIF and avoid Clawback.
Just tell her to slap her money into something that produces no income like gold or silver bars. If y8u haven't parked money offshore yet this maybe your only option. You could also allot money to your heirs early since a gift tax is a real p[ossiblity in the future.
First step is to make it to 65!
Lol well said Vic!
Second step is ensure you have a life/hobby plan for your retirement years.
Thanks, you made me laugh. It is the bare truth.
Hi, on OAS, I'm a naturalized Canadian citizen and will have lived in Canada for 10 years by age 65. I'm 61 now. I had also lived in the USA for 20~ years altogether and quite a few years in Taiwan after age 18. So when I receive the OAS letter at age 64, will Setvice Canada count those years and how do I let Setvice Canada know about those years? Thank you.🎉
You should call Service Canada and ask them.
Adam do you take on clients out of province (Edmonton)?
Yes, we have clients coast to coast.
Is the 2k tax free income only at 65, or every year?
If I am 65 and drawing from a RIF Account and 2 LIF Accounts’s, am I eligible to get the $2000 Pension Income tax Credit from each account ?
Is this RIF at 65 for Canadians or US citizens?
At age 65 you get a free eye exam in Canada.
Interesting , mine was 100.00
I need a financial advisor/planner.
www.parallelwealth.com/planning
Hello Adam I have RRSP I want to switch to RIPF I'm goin 65 yrs old this year month of July how much the limit widraw how can tke 65 yrs old thank Adam 😊
No limit, but there is a graph age 65 4.% ,66 4.17%...google Riff withdrawal rate. The money you withdraw is added to your early income
Do you have any videos with financial advice for people in their 70's?
Most of our videos would apply to this age group
Don't get scammed out of all your money. Preserve capital or you'll be panhandling on the streets like the poor downtrodden homeless boys and girls.
hi there, how does one hire your firm? thanks!!
Email us at info@parallelwealth.com or visit our website at www.parallelwealth.com/planning
@@ParallelWealth is it possible &/or OK if i could work with the guy in the video? thanks!!
If I can earn 9-9.5% investing CPP at age 60 and not withdrawing it until I’m 70 will I be better off than taking it out at age 65?
I’m putting the after tax CPP into a TFSA. If I take it out at 65 I’ll be taxed on the withdrawal at a higher amount.
You recommend for people to update their CPP pension eligibility amount and reach out to Doug Runchey. Doug is a wonderful and very knowledgeable pension consultant, but of course he charges, and should charge money for his service. I would recommend one calls Service Canada, the CPP and OAS Call Centre to receive the same information for free. The only difference is that Doug might be able to recommend if one should take their CPP pension earlier or later and the SC officer will only provide the information and can calculate the break even point.
At 5:14 it's states that you have the option to go into consulting and not pay into CPP. As I understand it, when you are self employed you must pay double the CPP since you must also pay the employer portion. Please clarify this statement when you have the chance.
Create a corp and pay yourself dividends.
@@ParallelWealth (and don’t complain when your CPP is so much smaller 😉). But yes, a viable strategy if the income bases are covered.
He meant after you have worked the maximum 40 years at full YMPE, there's no point in continuing to pay into CPP. Thus, the consulting suggestion.
but you will pay CPP on self employed income (both the employee and employer portion) if you work as a consultant unless you pay to create a corporation and pay yourself dividends. Lots of other considerations would go into the decision to incorporate though....@@GT-tm1ft
Good grief….. uh, what???? All I caught was, I’m supposed to call Doug..I think.
I'm a little bit confused by your information about the "pension credit". Pension credit is a non-refundable tax credit and it's worth the same amount regardless which tax bracket a taxpayer is in. If one lives in BC, as I do the "pension credit" is worth 15% of 2,000 (federal credit) and 5.06% of 1,000 (BC credit) to a total of $350.6. Therefore nobody will save $1,000 if they withdraw $2,000 from their RRIF.
Absolutely correct. Savings are overstated in the video for higher income earners. Pay tax at marginal tax rate to get tax credit at base rate.🤔
Thanks
Once you start your CCP/OAS can you change your mind and postpone it for some yrs.???
Up to 6 and 12 months respectively
This was super wise to discuss this topic. I was actually wondering if I covered all that I need to consider in prep for 65. Adam, thank you for giving us all the heads up....keep topics like this on your radar if this topic needs to be covered for other age groups. Awesome! 👍💯🙏🇨🇦
Anytime Meg. Hope you are doing well
@@ParallelWealth Hey, Adam, Prince Edward Island in the house....Spring is here and the clean up from hurricane continues after a welcomed quiet Winter....time to reve up our engines again and continue with restoration from Fiona hurricane. Keep up the great work you are doing in helping so many of us!💯👍☺🇨🇦
Dead at 80 ? Why wait ✋️ take it asap
Hi Adam,
So We are early 60s, we finally topped our tfsa, we have no other investments or rrsp etc.
At our age, where should we throw our $$ at?
I think we are, at second quarter 2023, about 10k$ sitting uselessly in our checking accounts.
Where should we put that $$ to work for us???
rrsp seems dumb, I mean if we could we would retire now!
Give him a call and pay him to prepare a plan for you.
I have a request/question? The CPP bridge on a Db pension? The details please? I thought is was so you could wait and get CPP at 65 with no penalty. I am hearing different things about it though. Can you do a video about it please. Thanks! Great videos too. ;)
After my stroke in 2019 I applied to Revenue Canada Agency for 'disabled' designation so no income tax owed on my CPP Disability payments and subsequently CPP when I become 65 years old. I will then also withdraw some mony from my RRSP eh
Sorry to hear about your stroke! I hope you are okay!! CPP Disability is taxable (its a taxable benefit) but they don't take deductions for tax off your pay because its handled when you file your income tax return. Depending on your income level and tax bracket, there may or may not be tax owing ... just keep that in mind when you start to withdraw money from RRSP's.
@@ambitiousunorthodox I am grateful to be relatively OK thanks; yes RRSP withdrawls will be maybe $300-400 per month so unlikely to owe income tax due to my disability deduction
How about a video on Inheritance on people that are retired and their parents pass away? Will that effect my benefits on the year of Inheritance, etc.
Will do one, but inheritances are tax free in Canada.
Good question Doug Lacoursiere! Your question caused me to wonder how an inheritance could affect people that are disabled collecting CPP disability and/or long-term disability. Even if inheritances are tax free (from CRA perspective), I wonder if CPPD or other services from public funds (like welfare) could be affected from an inheritance. Thank you for raising this question and something I definitely want to look into myself.
It all depends what kind of assets will you inherit. For example: if you inherit their RRSP/RRIF it will be taxed on their final tax return which could be a lot of tax. On the other hand it will not affect your benefits (GST Tax Credit, GIS, etc.) This subject is very complex.
@@alicjap3482 That's interesting and seems so wrong ... to tax the deceased upon their death when they chose to maintain the RRSP prior to their death. I think beneficiary(ies) should have the choice to maintain the RRSP (transfer to their own names) or cash it out.
And a year or so later have Rev Canada reassess CPP to be certain all contributions are taken into consideration.
Doug Runchey even has a service that he will conform your numbers are accurate.
If you are drawing CPP, OAS and a work pension will a RRIF still give you a $2000 tax deduction?
I have the same question. Hopefully he will respond.
The Pension Income Tax Credit applies to work pension income (any age) and RRIF/LIF income (age 65+). It does not apply to CPP and OAS income.
@@mingfranks460 you are right. I can use it before 65 but it’s only 15% of $2000 so max $300 per year not based on your actual tax bracket like Adam said.
Correct everyone, thanks for sharing.
If I have both rrif & lif, transfer 2000 from rrsp to rrif, also transfer 2000 from locked in rrsp to lif, is pension credit become $2000 or $4000?
Can you claim the pension income tax credit if you draw a defined benefit pension when you are 55?
yes
Yes, and if you split your pension income with your spouse, they also claim the pension income tax credit.
@@JeffFoss-vy1jt even if they are younger? We have a seven year gap, so one of us hasn't hit fifty yet. Thanks for chiming in! Appreciate it!
Yes. 2023 was my first year receiving my DB pension at 56. I received the tax credit when I did my taxes this month.
Do you still receive a tax credit if you’re under 65 on a defined benefit pension without opening a RIF account .
I can't imagine why, given a choice, anyone would retire a single day later than they have to
💯 agree. That said, some ppl have no hobbies and love work. Each their own I guess
@@ParallelWealth Yup, having a plan of how to live is so important in addition to knowing how you will pay for it.
Some people have a difficult family/home life and feel a sense of relief to go to work and escape that for a small portion of their day, even if/when their Employer is a jerk. Just depends on circumstances. But if/when the Employer or employment situation is amazing, I can imagine that would be surreal.
Work is a wonderful distraction from life at home, that said retirement is a full time gig, you can do things at a more relaxed pace.
If you plan to rush to retire the day that you are eligible to retire, you are in the wrong job.
Thank you for another helpful and informative video Adam. Assuming you are not at risk of OAS clawback from 65-70, at what age would the benefit of deferring OAS till 70 be realized?
Typically early 80s. But other factors at play. But ymi would say that's a conservative number