David Field, a certified financial planner who runs Papyrus Planning, discusses two CPP strategies when factoring in Old Age Security benefits and the Guaranteed Income Supplement
. Get exclusive investment industry news and insights, the week’s top headlines, and what you and your clients need to know. For more from Globe Advisor, visit our, in which Globe Advisor explores the decisions behind when to take CPP benefits and reviews different aspects of the beloved and often-debated government-sponsored pension plan.
I had savings and a registered retirement savings plan , so I was on the fence about delaying my CPP. I ended up taking my OAS benefits at 65 and delayed my CPP until January 2023, a month after I turned 66. Being born in December meant my income in 2022, when I was 65, was minimal, with no RRSP withdrawals and minimal stock sales, so I had low capital gains. I started getting GIS in May 2023 automatically following the completion of my 2022 tax return.
The first strategy is usually for people who have earned a lower income most of their lives or haven’t been able to save much for retirement. That will allow them to maximize their GIS and OAS income. Usually, any savings in an RRSP will be minimal. Any money withdrawn could then be saved in a tax-free savings account , as withdrawals from TFSAs will not reduce GIS income.
For those with large savings in their RRSP or LIRAs, it may be more advantageous to withdraw from those savings – even if the income is not needed – as it provides more time to withdraw fully taxable income at lower tax rates. That’s especially true if you have a pension or RRIF income to split with a spouse. Also, spending money when you’re younger is usually more enjoyable than when you are older. If you don’t need the money, saving it in a TFSA works well to ensure tax-free growth.
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Your CPP questions answered: Should I take my CPP benefits early and invest them?Readers ask about taking CPP at 60 and investing it - and what returns are needed to do better than waiting until 65
Read more »
How to avoid OAS clawbacks and other tax traps in retirementOld Age Security (OAS) clawbacks are usually the last thing younger retirement investors think about, but according to Statistics Canada, more than 500,000 seniors or 8.3 per cent of total OAS recipients have been touched by the claw from Ottawa.
Read more »
How ‘drop-out’ years affect Canadians’ CPP retirement benefitsThe CPP has three main drop-out provisions - general, child-rearing and disability - that remove low-earning years from the calculations and boost benefits
Read more »
CPP to invest up to US$2.2 billion in Telecom Italia’s networkCanada Pension Plan Investment Board has agreed to acquire a minority stake in Telecom Italia SpA’s landline network.
Read more »
CPP Investments invests $300M on Indian road infrastructureCanada's construction news
Read more »
Why the ‘break-even age’ analysis can be misleading when determining your CPP start dateThe break-even age analysis considers whether Canadians expect to live long enough to make up for the payments they would forgo by delaying their pension. Experts say it’s too ambiguous to be relied on
Read more »