AVOID TENSION-PENSION

Collins BarroW AVOID PENSION-TENSION RELAX MORE, PAY LESS OAS RECOVERY TAX Planning for retirement? Take control of your financial future. MOST CANADIANS OVER 65 ARE ELIGIBLE to receive an Old Age Security (OAS) pension. But there's a catch. The OAS recovery tax may "clawback" some or all of that pension. Check out our expert tips for keeping more money in your pocket. YOU'VE EARNED IT A BREAKDOWN OF OAS BENEFITS WHO? MOST CANADIANS 65+ WHAT? $563.74 ON AVERAGE OWHEN? EVERY MONTH 2014 AVERAGE ANNUAL OAS $6676.59 WHAT'S THE CLAWBACK? OAS RECOVERY TAX RATES 24 = 15% IF YOU EARN $72,809+ TAX RATE ON YOUR OAS AND THE RESULT IS .... .... ... YOUR MARGINAL TAX RATE HAS GONE UP TO 50% OR MORE WHAT'S A MARCINAL TAX RATE? THE TAX RATE APPLIED TO YOUR LAST DOLLAR OF INCOME EARNED IF YOU EARN $117,909 YOU LOSE ALL YOUR OAS LET'S DE-CLAW 5 WAYS TO TRIM THE RECOVERY-TAX SKIM 01- DEFER OAS Bonus: Every month you delay OAS, your pension amount goes UP BY 0.6% (up to 36%) ..... ...... ...... ...... ..... ...... 02- BETTER INVESTMENTS Tax-efficient investments reduce clawback BY EARNING CAPITAL GAINS/RETURN OF CAPITAL Example: corporate class mutual funds 03- TAKE OUT YOUR RRSPS Withdraw RRSPS BEFORE TURNING 65 so you have less income when you start claiming OAS ..... .... .. 04- INCORPORATE NON-REGISTERED INVESTMENTS Investments will be taxed AT THE CORPORATE LEVEL so you reduce your personal income ..... ...... ..... ..... ... 05- SHARE THE WEALTH Family income splitting LOWERS YOUR TAXABLE PERSONAL INCOME Example: a prescribed interest loan %24 Personalized financial planning can help keep your pension money where it belongs - in your bank account. CONTACT YOUR COLLINS BARROW ADVISER TO LEARN MORE ABOUT THE OAS RECOVERY TAX AND WHAT YOUR ANTI-“CLAWBACK" OPTIONS ARE. While this Infographic provides general planning parameters, Collins Barrow recommends seeking professional advice before taking specific tax planning steps. An independent member of Clarity Defined. collinsbarrow.com BAKER TILLY Collins Barrow INTERNATIONAL