Money The retirement reshuffle

16:45  03 august  2017
16:45  03 august  2017 Source:   MoneySense

What to expect when applying for CPP

  What to expect when applying for CPP Jon recounts his experience of being encouraged to apply for CPPEven before that column ran early in June, and seemingly quite independently of the OAS mailing, I received another Service Canada mailing, this one focused on the Canada Pension Plan or CPP. I found this curious since, unlike OAS, I could have applied for early CPP benefits five years ago but never received a pro-active mailing until now.

The retirement reshuffle . How to rearrange investment accounts in your golden years. I would appreciate your thoughts on diversification and winding down as we approach retirement .

A cabinet reshuffle or shuffle is an informal term for an event that occurs when a head of government rotates or changes the composition of ministers in their cabinet. They are more common in parliamentary systems

Q: I am married with a minor son. My wife and I have been successful saving and investing. Presently we have in excess of fifteen accounts. Mostly in equities and ETFs. These include RRSPs, TFSAs, RESPs, LIRAs, margin accounts, both USD and CAD.

I would appreciate your thoughts on diversification and winding down as we approach retirement.

—Jeff

A: Congratulations on your pending retirement, Jeff. Going to work and accumulating savings is the easy part. Figuring out what to do with a spare 40 hours per week and how to draw down on your nest egg is the hard part.

  • Would combining RRSP accounts save us money? »

First off, I would be inclined to do some consolidating. I’d like to hope you could reduce your fifteen accounts down to nine at most. I could see you each needing an RRSP, a TFSA and a LIRA, but you could get away with a single RESP and Canadian and U.S. dollar margin accounts. Perhaps you have group retirement accounts or Canadian and U.S. dollar registered accounts, but if it’s just a case of having two RRSPs in your name or multiple RESPs, for example, I’d start by combining like accounts.

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A: Congratulations on your pending retirement , Jeff. Going to work and accumulating savings is the easy part.

Reshuffle Your Retirement . Nickel December 29, 2005 • Saving & Investing•Taxes. As before, we will continue increasing the amount that we are putting toward retirement by 1% (or more) of my

Ask a Planner: Leave your question for Jason Heath »

Having as few accounts as possible at any time, particularly as you enter retirement, can make things easier, Jeff. It’s easier to manage your holdings and overall asset allocation, but it’s also easier when it comes to drawing down on your accounts.

If you are over the age of 55, you may be able to unlock some or all of your LIRA and transfer it to an RRSP. LIRAs come from pension plan transfers and pension unlocking is generally subject to provincial jurisdiction, since most pensions and therefore LIRAs are provincially regulated.

Ontario, for example, allows you to transfer your LIRA into your RRSP if you are over 55 and the value of your LIRA is less than 40% of the Year’s Maximum Pensionable Earnings (YMPE) for CPP contribution purposes – currently $55,300. So, a LIRA of less than $22,120 could be transferred into an RRSP so you have one less account.

Should you do a pension buyback?

  Should you do a pension buyback? It’s almost always a good ideaNow I have the opportunity to purchase that year of pension.

401(k) With No Match, Should You Contribute? What is the Retirement Savings Contribution Credit? 3 Responses to “ Reshuffle Your Retirement , Part Deux”.

The reshuffle comes at a time when Secretary Establishment Division Ismail Qureshi was close to his retirement and the most senior bureaucrat after him, Ghulam Dastagir

  • Unlocking the mystery of LIRAs »

Small balance unlocking for a federally regulated pension and LIRA is available for accounts valued at up to 50% of the YMPE.

If you and your wife have your own non-registered accounts in individual names, consider consolidating them too, Jeff. The benefit goes beyond simply having less accounts. It also helps with managing the accounts as you age, as you will both be able to handle your non-registered investments, as opposed to just one spouse on an individual account. It also simplifies estate planning, as the account will pass to the survivor with rights of survivorship. This assumes, of course, that you don’t have different plans in your will to have the account dealt with in some other way.

There may be tax implications from joining your non-registered accounts if your account values are unequal. You may need to report the investment income on a pro-rata basis as opposed to splitting the income equally on your tax returns. You may also need to attribute capital gains, to the extent they exist, back to the original spouse when realized.

Do we need spousal RRSPs if our salaries are the same?

  Do we need spousal RRSPs if our salaries are the same? How to decide if there’s an advantageConsidering our employment status and how our salary levels don’t differ too much, does it even make sense to have a spousal RRSP? Or should I just assume that pension income splitting will still be around by the time I retire?

An additional 25,000 police officers are also expected to be reshuffled in the 2015 reshuffle period, which will be reviewed in June. The mass retirement of police chiefs began April 16 following a

“With the pending retirement of our previous officials there will be a reshuffle of our people,” Padilla told newsmen.

The tax implications of consolidating joint accounts goes beyond the scope of this article, but generally, I would look for opportunities to reduce your accounts to as few as possible at any time and especially when you retire. And seek tax advice.

You mentioned you are primarily invested in equities and ETFs, Jeff. Depending on your cash flow needs and capital withdrawal requirements, consider how much equity exposure you should have in your portfolio by account.

  • What’s the best asset allocation for your age? »

It’s a reality that you may need to plan to sell stocks periodically if you are planning to dip into capital in certain accounts. In a situation like yours, you may well be withdrawing from your RRSPs, LIRAs or non-registered accounts in varying proportions, while simultaneously depositing to your TFSAs and RESP. Some accounts may require capital erosion and yet others may be growing with deposits.

Some people like to have fixed income maturities each year like bonds or GICs in order to replenish cash needs for the coming year. This wedge strategy ensures stocks are periodically sold and short-term cash needed is always readily available in the portfolio. Asset allocation is constantly adjusted in this way, as it should be in any portfolio.

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Inspector-General of Police Khalid Abu Bakar said this is especially with the retirement of several senior officers in the force. “The reshuffle was done to gear up for the next general election

The word retirement has been thrown around, probably because the break will be lengthy as he is There are many reasons to expect this year may be the biggest reshuffle yet as many of the old

When you have a lot of different accounts, I think it’s important to determine which investments to hold in which accounts, Jeff. I don’t like seeing the identical asset allocation across all your accounts. Fixed income, for example, may be better to hold in your RRSPs and LIRAs. Interest income is taxed most punitively in your taxable accounts, so why not hold interest-bearing investments in a tax shelter? Beyond that, why grow your registered accounts significantly with stocks when you can focus your stock exposure in your tax-free TFSA and your tax-efficient non-registered accounts?

You ask about diversification. I think diversification is always important, regardless of your proximity to retirement. You mention you use equities and ETFs to invest. If you’re a DIY investor, I think ETFs are that much better for non-Canadian exposure where it’s harder to choose individual stocks. And if you’re keen on using individual stocks, Jeff, the TSX is a poorly diversified, less efficient stock market and as a Canadian investor, your stock picking is probably best suited for the Canadian market.

Whether on your own or with the help of a professional, try to get a sense of your short and medium-term cash needs from your portfolio by account. This will help you to manage your asset allocation and plan your future withdrawals. It’s also important to prioritize the order and magnitude of withdrawals by account and determine a sustainable spending level and target portfolio return to stay on track in the long-run.

Toronto retirement home rents soar, putting some seniors in limbo

  Toronto retirement home rents soar, putting some seniors in limbo Before Patti Elizabeth’s aunt passed away, she was paying $5,200 a month for five years to live in a single room with a shared kitchenette in her old-age home in Whitby, Ont. Elizabeth, 58, fears she’ll never be able to afford to pay that much for a retirement home. She says her generation, the baby boomers, are lucky because some of them have pensions. But she worries their kids won’t. Her kids won’t be able to afford to pay for her to be in a home, either. “They don’t have the jobs; they don’t have that kind of money. I couldn’t possibly pay that, $5,000 is just an incredible amount of money,” she said. “Who has that?” That’s why she finally decided to welcome another of her elderly aunts into her home. She’ll soon move in. “I think that we need to be able to do that for everyone,” she said. “It just makes me crazy.” As housing prices across Greater Toronto rise and supply falls, the same is true for retirement residences, forcing seniors to deplete their savings, move in with family or move out of the city towards relative affordability. These homes — the all-inclusive kind you pay for, not the long-term care buildings you wait for if you’re extremely ill — can afford to name their price in a hot market. This year, vacancy rates in Ontario old-age homes reached their lowest point since 2001, dipping to 10.4 per cent, according to the Canada Mortgage and Housing Corporation’s latest seniors’ housing report. While the total supply of seniors’ housing grew by 2.

In the parliamentary system a cabinet reshuffle or shuffle is an informal term for an event that in addition to any changes resulting from the retirement or defeat of individuals ministers at the election.

The reshuffle was aimed at filling vacancies of additional and joint secretaries in the govt that had arisen due to retirements and vrs.

Ask a Planner: Leave your question for Jason Heath »

Jason Heath is a fee-only, advice-only Certified Financial Planner (CFP) at Objective Financial Partners Inc. in Toronto, Ontario. He does not sell any financial products whatsoever.

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MORE FROM A RETIREMENT EXPERT:

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  • Reasons to tap RRSPs before age 71
  • Collecting CPP while working in the U.S.
  • Lump sum vs. monthly pensions
  • Retiring to Mexico— for a lower tax rate
  • Using real estate vs. RRSPs to fund retirement
  • Using pension money to pay down debt
  • Retirement income jitters

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