Pensions
Making the decision to retire is sometimes a difficult one, complicated by the income options available for your pension. Most pensions offer joint and survivor income options to provide financial protection for you and your spouse. Other pensions may allow to you self manage a portion of your accrued benefits in a Locked-in Retirement Account.
Deciding on the best course of action depends on your personal situation as well as many other important considerations. This is a decision that should not be rushed. We can help point out the benefits and drawbacks to each available option, so you can be confident in your final decision.
Severances
At some point during your working career, you may suddenly find your self let go by your employer, or you may be offered an early retirement package. When this happens, you may receive a retiring allowance.
What is a retiring allowance?
A retiring allowance is an amount received on or after the retirement of an employee in recognition of long service or as compensation for loss of employment. It is generally considered termination pay that is provided either voluntarily on involuntarily (as a requirement of law or court settlement) by your employer. A retiring allowance is taxable, so careful planning should be taken to minimize the impact of taxation.
The advantage of having a payment classified as a retiring allowance is that it may be eligible to be transferred to an RRSP without affecting your contribution room enabling you to defer the income tax to a later date. There are specific rules for determining how much of the retiring allowance can be transferred to an RRSP or Registered Pension Plan.
We will help you determine the eligible portions of such payments, and will also offer an overall strategy to help minimize your taxes.
To learn more, please contact us.
