Retirement planning for executives & business owners 50+. Helping you retire with confidence & reduce your tax bill. Book a call ⬇️
Toronto
Joined May 2011
- Tweets3.9K
- Following217
- Followers819
- Likes7.9K
Pinned Tweet
The Canada Pension Plan (CPP) is one of your most valuable assets in retirement
But most people aren't optimizing CPP to its full potential
This can mean hundreds of thousands of dollars in lost benefits
Here is a breakdown of how to get the most out of CPP:
Once your savings reach a certain size, a new kind of pitch starts showing up.
It comes from investment firms that focus on wealthy clients.
They'll try and sell you on their amazing investment managers and strategies.
They'll tell you this is how sophisticated investors do it
Before you say yes, here's what you're really buying:
Say the market is up 10% one year.
Broad index funds hold the market as it is, so before costs they make that 10%.
Everyone trying to beat the market has to collectively average 10% as well.
Then their fees and trading costs come out of that 10%.
So after costs, their average dollar falls behind a low-cost index fund
Leaving the cottage to your kids comes with a tax bill
When you die, it's treated as sold at its value that day, and the gain since you bought it is taxed on the final return. But nobody actually sold it, so there's no sale money to pay the bill
Permanent life insurance gets misold to a lot of people.
But this is where it can be really valuable: it can guarantee your kids the cash for the tax, so the cottage can stay in the family.
Business owners: paying yourself only in dividends doesn't necessarily save you tax
And you give up two key retirement tools. Dividends don't create RRSP room, and you don't build CPP benefits
If your spouse is younger, your RRIF minimum can be based on their age instead of yours.
A younger age means a lower forced minimum. If you don't need the full amount to live on, that's less taxable income every year, and more left growing tax-sheltered.
Many people pick funds the same way
Look at past performance numbers and buy whatever's been on top
Here’s why it doesn’t work:
One number on the list did line up with results: the fee.
In the same Dimensional study:
- Cheapest quarter: about 20% survived and beat their benchmark
- Most expensive quarter: about 5%
High fees are a major reason funds underperform.
A fund has to clear its fee every year.
Over 20 years, that bar gets too high for most funds to clear. The higher the fee, the higher the bar.
Adding your adult children as joint owners to avoid probate will almost certainly create way more headaches than it's worth.
In Ontario, probate is 1.5%
Not that big of a deal in the grand scheme of things
Melting down your RRSP isn't always the smart move
Take money out early that you don't spend, and once your TFSA is full it lands in a taxable account, where its growth is no longer sheltered from tax.
Die at 78, and it might save you some tax. Live to 94, and the lost growth can outgrow any tax you saved.
Most people think tax planning means having an accountant prepare their tax return.
That's tax filing. It records what has already happened.
Tax planning means looking forward and planning strategies that can save you taxes for the rest of your life
William Barreca, CFP® retweeted
Canadian Corporate Tax Explained: How Integration Works
If you own a Canadian corporation and nobody has ever walked you through how Canadian corporate tax actually works, start here. This is the foundation for everything else on corporate tax planning.
youtu.be/ZfS2johugHY?si=jOsh…
