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.
YOUR CPP & OAS
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.
WHAT TO DO WITH YOUR RRSP?
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 If you simply withdraw all the money from your RRSP, the entire amount will be taxable in the year it is withdrawn.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.