While many people dream of the day when they’ll no longer have to work, making the transition into retirement can be difficult. Clearly, the transition to retirement can be a challenging journey, and many people approaching retirement can find themselves unprepared. There are several steps to take before retiring, to ensure that you’re ready and that the transition into retirement is a smooth one. Once you know how you want to transition into retirement, being fully prepared for it is essential. The more you organize what you plan to do when you quit work, the more you’ll limit the psychological effects of the transition to retirement. When you first start to consider transitioning into retirement, it’s helpful to be aware of the difficulties that you may come across.
Downsizing seems simple: sell a property, purchase a smaller one, and pocket the difference. The reality reveals hidden costs that diminish the expected gains: transaction and legal fees, taxes, moving expenses, renovations, monthly fees, and more. The practical factors of downsizing can also have a big impact. Deciding what to keep, sell, or donate is time-consuming and can be emotionally and physically exhausting. The emotional cost of leaving behind a family home, neighbours, local businesses, and community ties should not be underestimated. With advancements in home technology and the availability of in-home care services, aging in place has become more feasible. The decision to downsize or stay home is deeply personal. For Canadian seniors facing this choice it’s crucial to consider every aspect carefully.
Pension splitting in Canada can be an extremely effective way for couples to minimize their income tax and maximize their retirement income. In this article we’ll cover all you’ll need to know to reduce your taxes through pension income splitting. Pension splitting in Canada is a legal way for retired couples to considerably reduce their overall tax bill. It involves moving income from the highest-earning person to the lowest-earning person. Pension splitting in Canada allows you to split up to half of eligible retirement income with your spouse. Pension splitting in Canada can also help both spouses to benefit from the pension income tax credit. To qualify for this, you need to have eligible retirement income, which can be achieved when you split pension income.
A spousal RRSP is a type of RRSP that’s available in Canada to married couples and common-law partners. It allows spouses to accumulate retirement savings while potentially lowering the total amount of tax they pay – both now and in retirement. In this article, we explain how a spousal RRSP works, explore how it differs from a personal RRSP, discuss spousal RRSP contributions and withdrawals, and look at other ways to maximize retirement income. Spousal RRSPs work best when there are differences in income and savings levels between the spouses. With a spousal RRSP, the spouse making the contribution receives the tax deduction, while the lower-income spouse gets a boost to their retirement savings. This can help to reduce a couple’s combined taxes in two ways.
A Pooled Registered Pension Plan (PRPP) is a retirement savings plan option for Canadians including those who are self-employed. We take a deep dive into PRPP meaning, look at how employee PRPP contributions work (as well as employer PRPP contributions), how PRPP compares with RRSPs and RPPs, and answer the question, what does PRPP stand for? A PRPP is like a type of defined contribution plan, but rather than being managed by employers, it’s managed by one of five Canadian companies licensed to administer the plans. Pooled Registered Pension Plans are designed to provide income in retirement. While you’re working, you contribute to your PRPP, meaning that you’re not supposed to withdraw from it until you reach normal retirement age.
A National Institute of Ageing (NIA)/TELUS Health Survey discovered that 91 per cent of Canadians of all ages, and almost 100 per cent of Canadians 65 years of age and older, plan on supporting themselves to live safely and independently in their own homes as long as possible. Research has found that mobility issues are especially prevalent for older people. Installing stairlifts and home elevators are now quite common. We can now order groceries or meal packages to be delivered, join in social activities at a community centre or library through Facebook or a Zoom call and visit a physician remotely. But to effectively prepare to age in place takes time, money and energy and ideally should be done before it’s needed.
A Group Retirement Savings Plan (GRSP) is a collection of individual Registered Retirement Savings Plan (RRSP) accounts that an employer sponsors for its employees. It is typically administered by a plan provider, such as an investment or insurance company. Employers provide GRSPs to help employees save for retirement and take advantage of better management fees. Employers who sponsor the GRSP also have the option of contributing to individual employee plans. The main difference between a GRSP and an RRSP is that a Group plan is administered by an employer on behalf of employees, while an RRSP is solely the responsibility of the individual plan holder.
A Life Income Fund (LIF) is one way to convert your pension to income. In this article, we explain what a LIF is and how it works. We also discuss LIF withdrawal rules and other ways to supplement your retirement income, such as a reverse mortgage. A LIF is a registered account designed to provide you with an income throughout your life using funds from your locked-in pension. If you decide to convert your pension to a LIF, you’ll also have to choose the investments to hold in your LIF, which something that your financial advisor can help you with. You’ll also have to decide on the amounts you’ll need to withdraw each year from your LIF, based on government withdrawal rates
In this article, we explain what a pension plan is, discuss the main types of pension plans in Canada and explore other ways to supplement your retirement income, such as a reverse mortgage. There are three main different types of pension plans in Canada offered by employers: A defined contribution pension plan (DCPP), a defined benefit pension plan (DBPP) and a pooled registered pension plan (PRPP). Defined contribution pension plans are the most common type of pension. Defined benefit pension plans (DBPPs) are a type of pension that guarantees you’ll receive a specific – or defined – monthly income when you retire. A Pooled Registered Pension Plan (PRPP) is offered by financial institutions on behalf of employers (and their employees) and self-employed individuals.
