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Passing 65

Age ain’t nothin’ but a number - Willie Nelson

The baby boomers are starting to pass age 65. Seniors can keep working or they can choose to retire.

If you will be retiring, the CRA will recommend that you read pamphlet 119 titled “When you retire”.
Remember, you will not automatically receive the Old Age Security Pension (OAS) or the Guaranteed Income Supplement. You will have to apply for them at your Canada Service Center. We suggest that you apply as soon as eligible. Call 1-800-277-9914 to determine your eligibility. As with any money you receive, OAS is taxable, and will be reported on a T-slip (T4AOAS).

Same goes for CPP. You need to apply through a Canada Service Center. As with any money you receive, CPP is taxable, and will be reported on a T-slip (T4AP).

After many years with a company, you may be entitled to a Retiring Allowance which is a large lump sum received when retiring. Some or all of this may be eligible to be transferred to your RRSP, and you should call us to discuss your options. Your T4A slip will show the amount of your retiring allowance. Box 26 of your T4A will show the amount eligible for transfer. Box 27 will show the amount not transferable.
You may have been contributing to a pension plan. Your company’s HR department will be your best source of information. From a tax standpoint, you will receive a T4A from the plan administrator, and tax is payable at your marginal rate.

You don’t have to do anything when you turn 65-keep on going if you want!
You will need to address matters when you turn 71
three basic options to choose from when it comes time to mature your RRSP:
Cash it in. If you simply withdraw all the money from your RRSP, the entire amount will be taxable in the year it is withdrawn.

Use your RRSP funds to purchase an annuity. This will provide you with specified monthly payments.
Convert your RRSP into a Registered Retirement Income Fund (RRIF). An RRIF is much like your RRSP, except that you can no longer contribute to it.

Tax Tips

Many Canadians are looking abroad when adopting a child but it can be an expensive process. However, there is now some tax relief for adopting parents. You may claim a non-refundable tax credit for expenses relating to the adoption of a child up to a maximum of $10,445. The credit can only be claimed in the year the adoption is finalized but may include eligible expenses from previous years.

Turning 65 doesnít mean you canít contribute into an RRSP. The rules do allow you to contribute to your own RRSP up until the end of the year in which you turn 71, or to your spouse or common-law partner's RRSP. But remember, you will need available contribution room.

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