If you left a company with a pension before retirement, chances are you had to move the money into a Locked in Retirement Account (LIRA). That’s because both the federal and provincial governments do not permit you to convert your pension into cash. LIRAs are designed for accumulation of money that originated from a pension… Continue Reading
Category Archives: Pension
Four differences between pension splitting and CPP splitting
In my travels, some people confuse the rules of pension splitting and CPP splitting so I thought I would share the 4 key differences between the two. Let’s introduce the differences with an example. Jackie has a $2600 per month pension and she also gets $600 per month from Canada Pension Plan (CPP). Her husband… Continue Reading
Three examples where pension splitting makes sense
There are three tax planning strategies – Deduct, defer and divide. Income splitting is a way of dividing income and pension splitting is a great strategy to help couples reduce taxes. Sometimes rules can be confusing so I thought I would share a few examples of real life people who were able to take advantage… Continue Reading
Understanding Pension Splitting Rules
New pension splitting rules were introduced in Canada in 2007 and in my opinion, it was one of the most significant tax breaks given to retired couples. Income splitting is a great strategy to reduce taxes if you can move income from a higher income earner to a lower income earner. An individual who makes… Continue Reading
The math of an Indexed Life Annuity
Not long ago, I wrote an article on the math of annuities suggesting that you can’t really make the decision to buy a life annuity without some numbers. The example I showed in that article was based on an example of Gerald who is 65 with $100,000 in his RRSPs. A life annuity would pay… Continue Reading
The math of life annuities
Recently, Rob Carrick released a video on The lowdown on annuities in his Let’s Talk Investing Series. Although the information in the video was good, it was missing one very important piece when it comes to determining if annuities are right for you. It was missing NUMBERS. Life Annuities are one area where theory is… Continue Reading