Clawback Strategies
In Canada, government benefits are often paid only to those with lower incomes and then “clawed back” based on your income. Clawbacks are really additional income tax.
Understanding clawbacks is a critical part of knowing whether to invest in RRSPs or TFSAs. The correct answer depends on your tax bracket while working compared to your tax bracket plus clawbacks after you retire.
I have seen no other articles that properly address this critical topic anywhere. It includes a table illustrating the full cost of income tax plus all the clawbacks of government benefits that affect seniors.
This article was written for The TaxLetter, a subscription newsletter for accountants and tax specialists.
Read more… TTL_Clawback Strategies_2012 09
Planning With Ed
Ed Rempel has helped thousands of Canadians become financially secure. He is a fee-for-service financial planner, tax accountant, expert in many tax & investment strategies, and a popular and passionate blogger.
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“I am just starting to learn about all of this. Thanks for your help!”
This is a really good tip particularly to those new to
the blogosphere. Brief but very precise info… Appreciate
your sharing this one. A must read article!