Tax tips for
fewer retirement surprises:
Create your
retirement plan - Getting a
sense of your retirement goals and what they will cost you is the first step to
building a tax-efficient retirement plan. Your retirement plan is
personal to your goals and income needs, so speak to an advisor to help
you build the plan that's right for you.
Maximize
tax-advantaged savings as you near retirement –
Now is the time to accelerate your savings by maximizing your RRSP and
TFSA contributions. Not only will your savings grow without tax within these
plans, when you withdraw funds in retirement you'll likely do so at a lower
income so you'll pay fewer taxes (with an RRSP) or no tax at all (with a TFSA).
Withdraw RRSP
funds strategically – and re-invest in a TFSA – Although funds can remain in your RRSP
until age 71, consider how early withdrawals may help to reduce your overall
tax bill in retirement. Use the Retirement Calculators to understand
how all of your income sources (benefits, pensions, savings) work together, and
identify where you may be able to top up income at lower marginal rates. For
added savings, consider re-contributing after-tax RRSP withdrawals to your
TFSA, to continue tax-sheltered growth.
Retiring early?
Time your withdrawals to maximize your benefits: If you're retiring early or entering
semi-retirement, speak to an advisor about the benefits of using your savings
or delaying your CPP/QPP benefits to fit your income needs for retirement.
Key poll
findings:
Retired Canadians who faced surprises
upon retirement say they were most surprised by higher spending and unexpected
costs (30 per cent) including repairs and renovations, financial support
for children/grandchildren/parents and costs of long-term care; health issues (24
per cent); and, a higher tax bill (15 per cent).
Compounding the issue, nearly half of
retired Canadians (48 per cent) stopped working earlier than expected.
Reasons they retired earlier include:
33
per cent due to an unexpected health
issue
22
per cent were asked to retire by their
employer
In hindsight, retired Canadians with
retirement regrets say they wish they'd started planning sooner (38 per cent),
saved more outside of their RRSP (38 per cent), and would've retired
later (22 per cent).
KEY POLL FINDINGS:
Canadians aged 50+ who faced surprises
upon retirement:
I experienced unexpected health
issues
|
24%
|
I had to pay more taxes than I had
anticipated
|
15%
|
I had to carry debt or mortgage into
retirement
|
11%
|
*Unexpected home repairs or
renovations forced me to use some of my savings
|
9%
|
*I spent more money than I thought I
would
|
7%
|
I wasn't financially prepared for a
change in my life circumstances
|
6%
|
*Travelling cost me more than I had
anticipated
|
5%
|
*I didn't anticipate providing
financial support for my children/grandchildren
|
5%
|
*I didn't realize the costs of
long-term care for myself or my spouse
|
2%
|
*I wasn't prepared for the costs or
loss of income due to caring for my aging parents
|
2%
|
Other
|
8%
|
* Total of 30% for
"Unexpected Expenses"
Top three things Canadian retirees
aged 50+ who would go back and change anything pre-retirement:
I would've saved more outside RRSPs (e.g. TFSA, savings)
|
38%
|
I would've started my retirement
planning sooner
|
38%
|
I would've retired later
|
22%
|
Time of retirement for Canadians 50+:
1-2 years earlier
|
16%
|
3-5 years earlier
|
32%
|
On-time
|
39%
|
1-2 years later
|
6%
|
3-5 years later
|
7%
|
Canadian retirees top reasons for
retiring earlier than planned, by percentage:
I retired earlier due to an
unexpected health issue
|
33%
|
I was asked/incented to take early
retirement by my employer
|
22%
|
I had enough savings to retire
earlier than planned
|
17%
|
CIBC Retirement Surprises Poll Disclaimer:
From February 6 to 9, 2017 an online survey was conducted among 662 retired Canadians over the age of 50 who are Angus Reid Forum panellists. The sample outgo was balanced on age, gender and region to Census Canada. For comparison purposes, a probability sample of this size has a margin of error of +/- 3.8%, 19 times out of 20.
From February 6 to 9, 2017 an online survey was conducted among 662 retired Canadians over the age of 50 who are Angus Reid Forum panellists. The sample outgo was balanced on age, gender and region to Census Canada. For comparison purposes, a probability sample of this size has a margin of error of +/- 3.8%, 19 times out of 20.
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