You will have a lot more tax saving opportunities after you retire than before.

If you get a salary, you may have limited tax deductions or tax saving strategies. When you retire, it is completely different.

You can essentially determine the amount of income you will be taxed on once you retire. You can decide:

These 6 best strategies will give you an idea of the flexibility you have to minimize your tax with effective tax planning.

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10 Comments

  1. Pat Armstrong on April 12, 2018 at 1:21 pm

    I realize that when you withdraw funds from an RSP, the money is 100% taxable. However, do I pay more tax when withdrawing from dividend funds compared to equity funds. In other words, does the ‘dividend gross-up’ also apply to registered funds?



  2. Ed Rempel on April 12, 2018 at 2:26 pm

    Hi Pat,

    No, don’t worry. The dividend gross-up does not apply to registered funds. Only if you hold them non-registered.

    Whether they are a good investment or suitable for you is another question. Dividend stocks, in general, are more conservative and tend to have lower long-term returns than the broad markets.

    Ed



  3. Ed Rempel on April 12, 2018 at 2:40 pm

    Hi Gail,

    Your figures are correct.

    However, there may be opportunities for you if you have tax deductions. The GIS clawback tax is based on family net income, which is after tax deductions.

    For example, here is an easy way for you to make a 30% profit. You and your husband could each contribute $12,150 every year to an RRSP (if you have room) to offset the CPP. That would give each of you the maximum GIS. When you are 72 and withdrawing from your RRIFs, you would be in the lowest tax bracket.

    This is worth doing for you, even if you have to borrow the money for the RRSP contributions. You get 50% of the contributions back (possibly plus a bit of income tax you might pay), but then you only pay 20% tax on regular withdrawals on it after age 71.

    If you and your husband have $100,000 in unused RRSP room together, you gain $30,000 from this strategy.

    Ed



  4. Pat Armstrong on April 12, 2018 at 4:31 pm

    Ed, what were Gail’s figures/comments/question(s)?



  5. Ed Rempel on April 12, 2018 at 4:40 pm

    Hi Pat,

    Gail’s question was on a post about the “8-Year GIS Strategy”. You can see it here if you scroll down to the comments and look for Gail: https://edrempel.com/make-your-retirement-comfortable-with-the-8-year-gis-strategy/ .

    Ed



  6. Fashion Fantasy on July 25, 2018 at 2:50 pm

    I emailed this post to all my contacts. If I like to read it, my friends will too.



  7. Maria James on November 29, 2018 at 2:02 pm

    Minimizing taxes on your retirement income always need a special care and attention at your end. You need to withdraw less from your retirement savings plans and also delay in taking your benefits before retirement. Thanks for sharing these wonderful strategies..



  8. Ed Rempel on December 4, 2018 at 10:30 pm

    Thanks for the kind words, Maria. Yes, it takes care and planning to minimize tax on your retirement income.

    Ed



  9. ROM on January 21, 2019 at 1:44 am

    Appreciating the dedication you put into your website and detailed
    information you present. It’s nice to come across a blog every once in a
    while that isn’t the same out of date rehashed
    information. Excellent read! I’ve saved your site.



  10. […] you want to learn more about these strategies, check out the following article and video from Rempel’s […]



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