Is CPP and OAS all there is?
There are a few benefits that you should be aware of if you are soon thinking of retiring. First is the Pension Tax Credit.
If you are 65 or older you are entitled to a $2,000 tax credit on the first pension income you receive. Make sure to income split with your spouse if necessary, to ensure you both get this benefit. You are also entitled to an age tax credit of $7,637 (for 2020) when you file your personal income tax return once over 65. Most Canadians believe they are only entitled to CPP and OAS once they retire, but there is also the GIS benefit or Guaranteed Income Supplement. A GIS payment is received monthly like CPP and OAS however you must qualify for the benefit each year to ensure eligibility. If your monthly reported income is low, you mostly likely will be entitled to this government benefit. Even though you could be collecting up to $916/month, this does not mean that your net worth is low. On the contrary, you may have many financial assets and still qualify for this benefit. For example, if you own your own home, have money in a TFSA, or have a non-registered investment, these assets will have no impact on your eligibility for the federal income tested programs such as OAS and GIS. There are many Canadians that can continue to use the GIS benefit and supplement their monthly income from non-registered investments. When you retire, you want to ensure you can capture as many government benefits as possible, since you have been paying taxes and unrecoverable fees and expenses throughout your life. Don’t you think its now time for you to be getting something back? Ask your advisor to help you organize future withdrawals from your investment portfolio so that you can capture as many government advantages as possible.