The current rules are livable, but a blueprint in a Canadian Tax Journal article shows they could better reflect the financial reality of today’s seniors
OAS benefits are clawed back at a rate of 15 cents for every $1 in taxable income greater than $90,997 for 2024. If your income is at that level or higher, it’s appropriate for the government to start reclaiming some of your benefits. It would not be surprising to see a more aggressive clawback some time in the future to contain the growing cost of OAS .income fund withdrawals, they are sometimes presented as an unwarranted intrusion in the life of seniors trying to conserve their savings.
While focusing on RRIF rules, Prof. Mawani’s paper documents the fragility of retirement savings in many households and the divide between the minority with well-stuffed RRIFs and everyone else. Less than 25 per cent of eligible tax filers contribute to RRSPs on a regular basis, and the median amount contributed in 2021 was just $3,890.
But calling for the complete elimination of RRIF withdrawals serves the interest of the 7.7 per cent of RRIF holders with more $200,000 in assets. “They’re the wealthy who have so much money that they would like to use it for estate planning and not for retirement,” Prof. Mawani said. “Retaining wealth in tax-sheltered accounts while claiming OAS because of low reported income can jeopardize the sustainability of the OAS program,” he writes in the paper.
As for what to do with unneeded RRIF withdrawals, Prof. Mawani said one option is to make an in-kind withdrawal of a stock or fund and add it to a non-registered account. From there, capital gains and dividends would be taxed at a preferential rate.
People Rrif Income Withdrawals Government Oas Savings York University OAS Amin Mawani
Canada Latest News, Canada Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Changes to RRIF rules are necessary for the financial health of Canadian seniorsThousands of Canadians are worried about outliving their RRIFs and rules that require withdrawals starting in the year they reach 72
Read more »
Federal tax on vacant homes has failed to raise any meaningful revenueAlmost 98% of underused housing tax returns assessed have no tax owing
Read more »
Federal tax on vacant homes has failed to raise any meaningful revenueAlmost 98% of underused housing tax returns assessed have no tax owing
Read more »
Federal tax on vacant homes has failed to raise any meaningful revenueAlmost 98% of underused housing tax returns assessed have no tax owing
Read more »
Canadian Army says new military sleeping bags not suitable for 'typical Canadian winter'Canadian Army soldiers from 3rd Battalion, Royal 22e Régiment, prepare to move out from a landing area after disembarking from a CH-147 Chinook helicopter in the training area of Fort Greely, Alaska, United States, during training at the Joint Pacific Multinational Readiness Center on March 16, 2022.
Read more »
Federal tax on vacant homes has failed to raise any meaningful revenueAlmost 98% of underused housing tax returns assessed have no tax owing
Read more »