Your monthly
retirement
income will be
an accumulation
of benefits and
payments from
various sources…
DISPATCHES
p.7
Retirement income sources – know them all
…and to get the most
out of them, while paying
the least amount of tax, you
need to know what they are.
Source 1: Public Income Programs and Pensions – in other words, what
the government will pay
you in retirement
* Old Age Security (OAS)
provides a basic monthly
pension benefit at age 65.
Benefits are taxable, adjusted for inflation, and
‘clawed back’ in increasing
amounts as your individual
net income climbs above
a threshold amount. Individuals with lower incomes
may also qualify for the
Guaranteed Income Supplement (GIS).
* The Canada Pension
Plan/Québec Pension Plan
(CPP/QPP) pays a monthly
pension to people who have
been employed and contributed to CPP/QPP. Benefits are approximately 25 per
cent of your average annual
earnings during your working life up to certain limits.
Benefits are indexed to inflation, are taxable, and can
start at a reduced amount as
early as age 60, or as late as
age 70 with an increase.
Source 2: Employersponsored Pension Plans –
in other words, what your
employer provides
* Defined Benefit (DB)
pension plans provide a
specific pension amount
paid to you for your lifetime
after you retire. The amount
of a DB pension benefit is
set according to your age,
length of service, and salary. It may or may not be
indexed for inflation.
* Defined Contribution
(DC) pension plans are also
known as money purchase
plans and do not guarantee
the amount of your future
benefits. DC retirement income depends on accumulated contributions and the
investment returns earned
by these contributions.
Source 3: Individual
Retirement Plans – in other
words, what you will provide
When you retire, investments held in your Registered Retirement Savings
Plan (RRSP) can be converted to income in three ways:
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your assets, that they end
up losing their sibling (or
other) relationships. Family
harmony is extremely difficult to maintain without an
objective perspective;
- If you don’t want to burden family members/friends
with this job, or you simply
don’t feel that you have anyone appropriate to appoint,
and your Estate is of a certain value to warrant hiring
a Professional Trustee, then
a Professional Trustee is a
very good option for you.
Their experience and objectiveness is of huge value to
Estates. Each Professional
Trustee will have a fee struc-
ture that you should carefully review. Their fees may be
charged monthly, quarterly
or annually based upon the
value and type of the assets
they are managing in a Trust
or Estate. Some Professional
Trustees also charge hourly
fees or flat fees for certain
activities or situations. It is
very important to closely review the Professional Trustee’s fee schedule so that you
understand how and what
fees will be charged to your
Estate. If the assets in your
Estate do not warrant the
level of fees to be charged,
then obviously this is not a
good option for you.
All of the above should
* A Registered Retirement
Income Fund (RRIF) is like
an RRSP in reverse. Instead
of contributing to it, you
withdraw from it. A RRIF offers the flexibility of a wide
range of in ٕ