We will show you why you should never have paid into an RRSP. It is was the worst investment you could have made!
YOUR RRSP And THE TAXMAN “It’s better to plan for taxes than have the government tax your plan”
What will you do with your RRSPs and RRIFs?
Are you counting on your RRSPs to supplement your pension?
Will your RRSPs help you buy a new car or motor home?
Renovate your home?
Take a cruise?
Help the kids?
Maybe you haven’t even thought about what to do with your RRSP or RRIF.
Use the following quiz to see if you’re planning for taxes or if the government will be taxing your plan.
Have your retirement years been better financially than you had planned? Y/N
Do pensions and other income cover your day to day expenses? Y/N
Are your RRSPs meant for the ‘little extras’ rather than day to day living? Y/N
If you answered yes to these questions, you could be in for a big surprise when you start withdrawing money from your RRSPs or RRIFs.
The Canada Revenue Agency is the surprise.
High income taxes, lost benefits and claw backs all await the unwary retiree.
When you withdraw money from a RRSP or RRIF, you could lose up to 50% to the Canada Revenue Agency!
In a report called “Poverty Traps” the CD Howe Institute highlights the plight of low income retirees where the combination of taxes and lost benefits will cost them as much as 75 cents of every dollar they withdraw.
You can get the FREE report by Clicking Here
Now tell us if that isn’t the least bit frustrating!
The Frustrations of Retiring after Working Hard and Saving Carefully.
It is a sad reality for many people when they discover that the money they saved so carefully in their RRSPs is not all theirs.
The money in your RRSPs includes a lot of unpaid taxes, and the Canada Revenue Agency is waiting impatiently to get its share.
That’s pretty frustrating after all that talk of “tax-free’ RRSP savings.
It’s only tax-free until you try to use it; then the taxes can be punishing.
What use are your savings to you if you can’t use them?
Once you turn 71, those registered savings can become a source of considerable frustration…
DON’T LET THE TAXMAN TAKE HALF YOUR RRSPs!
The Problems of Retirement Savings.
Problem #1: Withdrawing money from your RRSP or RRIF may put you in a higher tax bracket and not all the money you withdraw is yours!
The taxes you deferred while your RRSP investments grew come due when you start withdrawing that money; however, when you withdraw funds from your RRSPs that money is added to your other income from that same year.
Your taxes are based on all your income including government programs such as Canada Pension Plan (CPP) and Old Age Security (OAS).
By withdrawing money from your RRSPs you might put yourself into a higher tax bracket. Then what happens?
The following April when income taxes are due where does the money come from to pay those extra taxes?
Some of you may have to make another withdrawal from your RRSP or RRIF to pay the taxes.
That money is then included as income in that year and you’ll pay taxes on it the following year.
The year after, where does the money to pay the higher income taxes come from?
From your RRSP or RRIF. It’s a vicious circle.
Now you can see that some of the money in your RRSP and RRIF is yours, but the rest is the taxman’s.
The RRSPs were supposed to ‘help’ you with the little extras.
Instead, they are being used to pay the taxes in the higher income bracket you were put in when you withdrew money from your RRSPs for the ‘little extras’.
Problem #2: When you withdraw money from your RRSP or RRIF, you could lose your government retirement benefits.
Most government seniors’ programs are tied to how much money you earn.
The government treats your pensions as earnings, so even though you are retired you are still paying income tax.
Each year, the government determines your eligibility for seniors’ programs.
They look at your earnings.
If you earn too much, you lose all or part of your benefits…
So, how much is too much?
• Your Guaranteed Income Supplement (GIS) is clawed back based on every dollar of earnings you have; your pensions are considered earnings. When you reach $14,904 you no longer qualify for GIS.
• Your Age Exemption starts to be taken away when your income reaches $32,470. It is gone by the time your income reaches $64,043.
• Your Old Age Security (OAS) is clawed back when your income reaches $63,511. And when your income is over $102,685 you no longer receive any OAS!
• If you are a lower income renter, you could lose the Shelter Aid for Elderly Renters (SAFER) grant from the provincial government.
The frustrating reality is that after years of prudently savings for your retirement you may lose all or part of your GIS or OAS for the following year when you withdraw funds from your RRSP or RRIF.
What’s worse is that to make up for the lower GIS and OAS payments you may have to take out even more RRSP/RRIF monies to survive.
And that can put you in a higher tax bracket.
It’s a vicious cycle in which no senior should be trapped.
If you earn less than $14,000 from your pensions (including CPP) and withdraw money from your RRSP or RRIF you could be ‘paying’ the government 75% ‘tax’ on your withdrawal.
What can you do to stop the government from taking your savings?
“It’s better to plan for taxes than have the government tax your plan”
Our focus is to help Canadians reduce their taxes by taking advantage of the very same strategies that the very wealthy use to stay very wealthy!
While most financial planners, banks and financial institutions continue to tout the benefits of RRSPs for those under 65, our group has the vision to look ahead, and see what is happening to retirees and their RRSPs and RRIFs.
Many accountants and financial planners are unaware of the tax planning strategies needed to help retirees keep as much of their RRSP money in their own pockets, not in the government’s pocket.
Regular tax strategies aren’t enough once you reach 65 years.
Our group combines a variety of financial products from different companies to implement advanced tax strategies on behalf of our clients.
Don’t you deserve to keep your wealth?
Even if your RRSP is currently less than $50,000 but you don’t want to fall into the RRSP trap
Contact us for your complimentary review.
1. Fill out the form below and fax it to our secure fax at 1-923-9133
2. There is no cost or obligation to you. It’s your choice. You can continue to pay taxes up to 50 cents or more of every dollar you withdraw from your RRSP or RRIF, or you can take a few minutes to find out how we can help you keep YOUR fair share of YOUR money. Your next step Click Here for How Your RRSPs May Devastate Your Retirement Plan! – Worksheet
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