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Ontario Budget: Tax Planning is Critical for High Earners

Retroactive tax hikes hurt family financial plans and make it difficult for them to responsibly plan for their financial futures.

Yet, that’s exactly what’s at stake with Ontario’s significant tax hikes on high earners and small business, reintroduced in its budget this week. To preserve wealth in 2014 and offset higher taxation on income, planning to minimize personal tax during work life and at retirement must begin immediately for business owners, employees with higher incomes and, in particular, with executors who will preside over a significant untaxed estate.

Consider the changes to the high income tax brackets. It had been slated to start at just over $514,000. For 2014, however, two new brackets will grab more tax from those whose income exceeds $150,000 and $220,000. This is of particular concern when someone dies with untaxed balances in RRSPs or RRIFs  because your estate will now pay more if you die with untaxed income over $150,000 and don’t have a spouse to roll the balances over to. Also, bracket creep will extract more from accumulated savings before they are passed along to heirs because these income thresholds will not be adjusted for inflation in the future.

For owners of Canadian Small Business Corporations that claim the small business deduction, the increases in taxation for their other-than-eligible dividends puts a significant new tax on retirement income from these sources. This is in addition to the new Ontario Retirement Pension Plan costs that will increase payroll tax costs of these corporations.

Consider the following table for a comparison of 2013 and 2014 rates for dividends. There is a 2.58% increase in marginal tax rate charged on incomes up to $40,120 and a 4.09% increase when taxable income is between $87,908 and $136,270. In fact, at the top that bracket – taxable income over $509,000 – the increase is only 3.66%.

Federal and Ontario Marginal Tax Rates for Dividend Income in 2014 and 2013

2014

2013 Equivalent Rate

Taxable Income*

Small Bus. Corp. Div.

Eligible Div.

Small Bus. Corp. Div.

Eligible Div.

Up to $40,120

5.35%

-6.86%

2.77%

-1.89%

$40,120 to $43,953

10.19%

-1.20%

7.90%

3.77%

$43,954 to $70,651

18.45%

8.46%

16.65%

13.43%

$70,652 to $80,242

20.61%

10.99%

17.81%

14.19%

$80,243 to $83,237

23.45%

14.31%

20.82%

17.52%

$83,238 to $87,907

28.19%

19.86%

23.82%

19.88%

$87,908 to $136,270

32.91%

25.38%

28.82%

25.40%

$136,271 to $150,000

36.45%

29.52%

32.57%

29.54%

$150,001 to $220,000

38.29%

31.67%

32.57%

29.54%

$220,001 to $509,000

40.13%

33.82%

32.57%

29.54%

Over $509,000

40.13%

33.82%

36.47%

33.85%

* income ranges slightly lower for 2013    © Knowledge Bureau, Inc.

For small business owners, important planning options include a review of business profitability factors to take into account the increased taxation shareholders now face in their after-tax incomes. What business expense line items must be reduced to take this into account? How much more revenue must be earned at the top line and how will this affect pricing strategies for goods and services?

From a personal tax point of view, deferring income into the future may be wise if this is a year of unusually high income. Year-end planning could also involve a smaller bonus, paying lower income earners in the family more salary if they work in the business, or giving more to charity before year end. Taking the biggest possible registered pension plan and RRSP deductions is a current year strategy, but this must be weighed against future taxation liabilities.

Planning for retirement income will also involve maximizing TFSA contribution room to help to reduce future taxable income levels; so will planning to average in taxable RRSP and RPP withdrawals over a longer time horizon in retirement. A longer withdrawal period will often help to minimize taxation over the entire period by avoiding the high income surtax thresholds.

Portfolio performance, too, is under more pressure. The markets must return several percentage points more to account for these tax changes. Now is a good time to review untaxed accrued gains in non-registered accounts and investments in which return of capital has created a tax liability.

It’s Your Money, Your Life. Because taxes are going up significantly for high earners and potentially the taxes paid on the final returns of deceased taxpayers, it’s best to do some tax planning well in advance of the end of this year to preserve your tax return. Take the time to see an MFA-Retirement Income Specialist to help you preserve income-producing capital in the future.

Evelyn Jacks is president of Knowledge Bureau and author of 51 books on tax and personal wealth management. She is also the founder and director of the Distinguished Advisor Conference (DAC). The theme of the 2014 three day think tank in Horseshoe Bay, Texas Nov 9-12 will be “Think BIG: Find the Sweet Spots in Wealth Management”  Follow Evelyn on Twitter at @EvelynJacks.


Business Owners Face CRA Scrutiny

CRA is acting to shore up compliance for small business owners – both tax practitioners and their clients will be engaged in a “Get it Right the First Time” initiative which includes office visits by CRA.

Today there are millions of small businesses in Canada. They are led by small business owners of every type: retail store owners, consultants, professionals, commission salespersons, farmers, fishermen, and bed and breakfast owners, all of whom are working hard to make money for their families, employees and communities and build equity. Thanks largely to improvements in communications technology, all generations can now make lifestyle decisions to work from home in a self-employment capacity.

Entrepreneurship, in fact, is on an upward trend in Canada. Up to 150,000 new business are expected to emerge in the next ten years[1]. Canada also has the lowest insolvency costs in the G20, and we have recently recruited thousands of new immigrant entrepreneurs as well.

Business owners are distinct from other types of taxpayers. They are people who invest their time and money first, to reap the rewards of both profit and equity in their enterprises later. There is lots of risk involved, too.

The Canadian tax system takes this into account. Business owners can write off business losses against other income of the year; they can also split income by hiring family members to work in their enterprises. When they sell their qualifying Canadian Controlled Private Corporations, each shareholder may also qualify for an $800,000 capital gains exemption for 2014; an increase over the $750,000 amount available in years 2007 to 2013.

But many of these potentially successful ventures of the future will face potential failure because they have not prepared themselves for their relationship with the CRA. They have to, by law, keep proper books and records; they have to collect sales and payroll taxes for various levels of government and remit them properly and on time. And they have to pay personal and corporate income taxes.

Recently, two Winnipeg men, faced the consequences of non-compliance:

On May 16, 2014 the Manitoba Provincial Court fined Ken D. Blackmore, of Winnipeg a total of $12,000 after pleading guilty to charges of failing to file his tax returns from 2007-2012. The Court gave Mr. Blackmore sixty days to file the missing returns. If he does not comply, he could face jail time.

Mitchell Rygiel, a photographer, was fined $48,719 on March 13, 2014 for evading taxes. The fine represents 75% of the total federal and excise taxes that were evaded. Both Blackmore and Rygiel were given 12 months to pay their fines.

It’s Your Money. Your Life. Keeping proper records and filing correct tax returns is a prerequisite to successful business development. Make a great decision: see a Tax and/or Bookkeeping Services Specialist for help as a first line of defence. Working with a qualified professional can help you focus on what you need to do well – making income and building equity – rather than non-compliance with CRA, which can erode both.

Evelyn Jacks is president of Knowledge Bureau and author of 51 books on tax and personal wealth management. She is also the founder and director of the Distinguished Advisor Conference (DAC). The theme of the 2014 three day think tank in Horseshoe Bay, Texas Nov 9-12 will be “Think BIG: Find the Sweet Spots in Wealth Management”  Follow Evelyn on Twitter at @EvelynJacks.

 


[1] Ernst & Young G20 Entrepreneurship Barometer 2013.

 


Warm Holiday Counts as Reasonable Medical Expenses?

Should taxpayers be able to deduct travel expenses to warmer climates as medical expense tax credits (METCs) to alleviate pain and suffering?

Unknown ObjectOur legal researcher, Greer Jacks, found an interesting case, Tallon v. The Queen, which considered just that and in the process allowed the taxpayer a lucrative winter holiday bonus. Here’s what happened:

The taxpayer suffered from chronic pain and was prescribed by her doctor to live in a warmer climate than Canada can offer in the winter. After an appeal to the Court, the appellant was successful in claiming expenses in her 2008 taxation year, but her claim of $17,494.50 as METCs in her 2009 taxation year for her and her spouse to travel to Thailand and Indonesia was denied by the Canada Revenue Agency.

At trial, the Crown alleged that the appellant’s doctor’s certificate was insufficient, a complaint that was not made in 2008. In order to successfully claim METCs under subsections 118.2(2)(g) and (h) of the Income Tax Act, the medical services must not be available in the local community, the route taken must be a direct route, and it must be reasonable for the taxpayer to travel to that place to obtain the services. The claim can include the expenses for another if there is a medical certificate stating that the patient cannot travel alone.

The Honourable Justice Judith Woods was concerned that she was not provided with the reasons for judgment (given orally) in the appellant’s 2008 decision, but was only given cases by Crown counsel that sought to distinguish that decision. When Crown counsel offered to arrange for a transcript of the oral reasons subsequent to the hearing, Justice Woods stated that in this particular case the additional time and cost were not justified (it was a hearing under the informal procedure that was heard in Toronto rather than Thunder Bay for the purposes of an expedited decision).

Although finding in the appellant’s favour, Justice Woods shared a little skepticism about the claim in her concluding remarks. At paragraph 27 she said:

 “Before concluding, I would mention that I am troubled about the number and location of countries that Ms. Tallon and her spouse have visited over the years, which are mentioned above. This leaves me with the impression that these locations were not chosen only for medical reasons. I leave this issue for another day because the Crown did not argue that the reasonableness requirement in s. 118.2(2)(v) was not satisfied.”

What do you think? Should these expenses have been allowed? Or was this an $18,000 vacation on the taxpayers dime. Post your thoughts on our Facebook page.

Evelyn Jacks is president of Knowledge Bureau and author of 51 books on tax and personal wealth management. She is also the founder and director of the Distinguished Advisor Conference (DAC). The theme of the 2014 three day think tank in Horseshoe Bay, Texas Nov 9-12 will be “Think BIG: Find the Sweet Spots in Wealth Management”  Follow Evelyn on Twitter at @EvelynJacks.


Illness is Expensive; Tax Savings Can Help

One of the most common yet most missed provisions on the personal tax return is medical expenses, and in an aging demographic, they are more prevalent.

This means there is a greater chance that professional counselling is required on this topic to ensure taxpayers claim all the expenses they are entitled to.

The allowable list is lengthy. . .so is the list of ineligible expenses. The first rule for the best claim is to group medical expenses into the best 12 month period ending in the tax year; then make the claim on the return of the spouse with the lower taxable income. That’s because medical expenses are reduced by 3% of net income on line 236. Lower earners generally get a better claim.

So what’s deductible? The list of expenditures prescribed by qualified medical practitioners includes:

  • Air conditioners
  • Attendant care expenses
  • Bathroom aids and incontinence products
  • Cancer treatments and travel to receive them if not available in your home town
  • The incremental costs of gluten free products
  • Hearing aids and their batteries
  • Insulin and its monitoring devices
  • Whirlpool bath treatments

And what’s not deductible? Notably for the elderly:

  • Personal response systems such as Lifeline and Health Line Services
  • Athletic or fitness club fees
  • Blood pressure monitors
  • Cosmetic surgery
  • Organic food and over-the-counter vitamins and supplements

In some cases, medical expense claims fall into a “gray area.”

It’s Your Money. Your Life. Now’s a good time to go over your tax return to see if you claimed everything to your advantage this past tax filing season. If not, contact a tax specialist to adjust your return.

NEXT WEEK: A surprising case on warm climate retreats.

Evelyn Jacks is president of Knowledge Bureau and author of 51 books on tax and personal wealth management. She is also the founder and director of the Distinguished Advisor Conference (DAC). The theme of the 2014 three day think tank in Horseshoe Bay, Texas Nov 9-12 will be “Think BIG: Find the Sweet Spots in Wealth Management”  Follow Evelyn on Twitter at @EvelynJacks.


Ostriches Aren’t Smart; Tax Penalties Are Expensive

Well it’s that time of the year again. . .tax audit season. The ostrich approach is one way to cope, but not the smartest.

Rather, getting your head out of the sand and taking one more look at the validity of the claims on the tax returns you prepared – for yourself and your clients – is really important before submission to the glorious cottage season. The alternative approach, in fact, could ruin many sunsets to come.

The onus of proof is on the taxpayer to show that all the information on a tax return is properly reported – all the income is reported from all sources, including barter transactions; all the deductions are matched to income-earning potential; documentation is available to back up those numbers and all tax credits – refundable and non-refundable alike – are properly claimed (no hiding that common-law relationships, for example).

However, when there is potential fraud, in addition to late filing and gross negligence penalties, criminal prosecution can be pursued by CRA. The onus of proof Is on CRA to show your willful intent, but both taxpayers and their professional advisors can also be found guilty and charged. . .and the consequences are expensive, as shown in the chart below.

 

Offence Punishment
Failure to make or file a return as required. A fine of not less than $1,000 and not more than $25,000 or both fine and imprisonment for a term not exceeding 12 months.
Tax evasion, including making of false, deceptive statements in a return, certificate, statement or answer, destroying, altering, mutilating, books or records, or otherwise willfully evading tax or fraudulently claiming refunds or credits. A fine of not less than 50% and not more than 200% of the amount of tax sought to be evaded or both the fine and imprisonment of not more than two years.
Prosecution on indictment: any person charged tax evasion may be prosecuted at the election of the Attorney General of Canada to a further penalty—in addition to any other penalty. A fine of not less than 100% and not more than 200% of the amount of tax sought to be evaded or credits sought to be obtained.
Communication of confidential information by government official. A fine of not more than $5,000 or imprisonment of up to 12 months or both.
Communication of taxpayer’s SIN. A fine of not more than $5,000 or imprisonment of up to 12 months or both.

 

It’s Your Money. Your Life. Filing accurate tax returns on time is one sure-fire way to preserve wealth in the family. And, in contrast to the economic and political black swans we cannot do much about, avoiding tax penalties is completely within our control.

Evelyn Jacks is president of Knowledge Bureau and author of 51 books on tax and personal wealth management. She is also the founder and director of the Distinguished Advisor Conference (DAC). The theme of the 2014 three day think tank in Horseshoe Bay, Texas Nov 9-12 will be “Think BIG: Find the Sweet Spots in Wealth Management”  Follow Evelyn on Twitter at @EvelynJacks.


Affluence Is About Managing Cash Flow

What is wealth? Many people don’t think that “wealthy” describes them or their lifestyle, but to the outside world they may seem quite affluent. Wealth really is more about a state of mind than an actual number.

I like to think of it as that time in your lifecycle where you can say with absolute certainty, “we have enough. . .for today and the future too.”

To get there, it’s important to understand how much you are worth today. Do a personal and a family net worth statement. You’d be amazed how few families actually take the time to do this, but it’s really important from a tax point of view in order to minimize the risk of tax erosion should something happen to you.

Take the time now to value of all your assets and how much insurance you’ll need to pay the taxes on any unexpected tax liabilities. Do a will, health care plan and power-of-attorney review at the same time.

The truly wealthy achieve more for themselves and all the stakeholders around them because they take the time to know the numbers: their net worth, cash flow (before and after tax), and future needs. Three things to remember in planning:

  1. Include a Tax Filter. Measuring wealth “before tax” can over-exaggerate the true amount of financial capability when we need it. Talk to your tax professional about planning your after-tax income now.
  2. Measure Active and Passive Income Often. If one of the primary purposes of wealth is to have enough financial resources to replace your actively earned income in the future, then we must plan to build passive income sources by acquiring “income producing capital”. Is your portfolio of investments designed to do that? An astute investment advisor can help structure a portfolio design that will.
  3. Plan for Liquidity and Purchasing Power. Is money available in the future when needed? What will it be worth – after tax – when you need it? Plan sustainability of income by including both a tax and investment lens in your planning.

It’s Your Money. Your Life.  Leverage all your resources – time and money – to get the peace of mind you deserve in the future. That requires a deliberate process and, quite often, the help of tax and financial advisors. Secure your happiness and peace of mind working with the right people on the right plan.

Evelyn Jacks is president of Knowledge Bureau and author of 51 books on tax and personal wealth management. She is also the founder and director of the Distinguished Advisor Conference (DAC). The theme of the 2014 three day think tank in Horseshoe Bay, Texas Nov 9-12 will be “Think BIG: Find the Sweet Spots in Wealth Management”  Follow Evelyn on Twitter at @EvelynJacks.


Rich-Poor Gap? Blame Educated Women

Income inequality is a noted problem in society, and one covered in this blog recently. But it’s one that is complex and requires a closer analysis.

Lawrence Solomon, research director of the Consumer Policy Institute, has well noted this complexity in his article, Female drivers of income inequality, in the National Post last week.

The pull out was attention-grabbing: “One route to greater income equality would be to restrict education for women and arrange marriages for them.”  Really? I was compelled to read on.

Several points were made by Mr. Solomon: today higher education pays more than ever, and contributes significantly to the fact that marriage dynamics have completely changed in Canada, to our economic benefit, especially since 2005. Doctors, lawyers, and other professionals are as likely to be women as men, and so when couples with post-secondary degrees marry, they pull in twice the median income or almost three times the extra amount their counterparts in the 1960s earned, when women were more likely to “marry up” to partners in different socio-economic classes.

Interesting. He goes on to say that at the other end of the education scale, men and women without a high school education who marry earn 59% less than the median income today…much less than what occurred in 1960. In the author’s words: “…the best educated households now have income more than five times that of the least educated groups, a more than doubling in the gap since the 1960s.”

He concludes that the trend to more education, especially for women, has been the key factor that has promoted the rich-poor gap so many find unconscionable. One route to greater income equality, therefore, would be to restrict education for women and arrange marriages for them! Given that alternative, income inequality – and that fact that educated women can now choose to marry their equals – may not be so bad for society after all.

It’s Your Money. Your Life. Last week, I suggested we aim for a high bell curve when it comes to income equality and household wealth. A sure fire way to earn higher incomes – and the resulting increase in disposable earnings for savings come to the rich – begins with an investment in post-secondary education…and it’s never too late to start.

Evelyn Jacks is president of Knowledge Bureau and author of 51 books on tax and personal wealth management. She is also the founder and director of the Distinguished Advisor Conference (DAC). The theme of the 2014 three day think tank in Horseshoe Bay, Texas Nov 9-12 will be “Think BIG: Find the Sweet Spots in Wealth Management”  Follow Evelyn on Twitter at @EvelynJacks.


Wealth Planning: Canada a Sweet Spot for a Higher Bell Curve

Lots of great material has been released lately about global and Canadian wealth trends. Three works come to mind as must-reads…

The OECD has released its study,  FOCUS on Top Incomes and Taxation in OECD Countries: Was the crisis a game changer? and Stats Canada released its wealth of Canadians report Survey of Financial Security, 2012, as well as a report entitled Mortality Projections for Social Security Programs in Canada.

What’s interesting about these reports is the taxation potential that indebted governments see in the recovering incomes and increased net worth of high earners. Since the top 10% of Canadians pay 76% of all taxes, while the bottom 50% pay only 4% of all taxes, prohibitive taxation on one taxpayer group may be a mistake if not well thought through.

Looking at the characteristics of the top earners who are younger, we find post-secondary education is a big key to wealth; so is the acquisition of a principal residence, which accounts for about 30% of wealth. Pension assets are equally important, accounting for another 30% – a bi-product of landing good jobs.

Older also means richer. Based on the mortality study, life expectancies at age 65 are projected to increase from 21 to 24 years for men and from 23 to 26 years for women by 2075. This means that Canadians are expected to live beyond age 90 on average in the future, and they will comprise a much more important part of our taxation base. Over time this means that a greater percentage of income and wealth will come from the capital a large, retired demographic owns.

This is where taxation policy requires caution. Both human capital and capital used for investment purposes is mobile, and both tend to move to friendlier jurisdictions when taxation is prohibitive.

It occurs to me that the optimal goal is to aim for a high bell curve when it comes to the creation of household net worth in Canada; that is, from a policy point of view, to aim for fewer households appearing at the top and bottom of the wealth scale, with the great majority earning a significant enough income to establish a sound capital base that will grow over time. That begins with the ability to acquire and maintain a tax exempt principal residence.

The good news is that over 60% of households in Canada do appear to own their own home, according to these recent studies; a fact that has certainly contributed to the wealth of our society. While income and capital inequality continues to be an issue, particularly for the single households, Canadians are wealthier than ever, and within an aging demographic have more time to experience compounding growth in their capital investments to supplement human capital.

There is likely room for more tax on the top 10%. But, what if governments gave equal attention to stimulating innovation, productivity, and investment in the Canadian economy, thereby creating greater income and investment opportunities across all demographic lines? Both incomes and tax on incomes could grow in the short term.

It’s Your Money. Your Life. It takes a village to grow a world class economy. In Canada so much of the required framework for that kind of success can be found: substantive home ownership, great educational opportunities to grow top earnings, and access to tax-efficient retirement savings. Sharpening the focus to include all Canadians in a higher bell curve of net wealth is a real, achievable opportunity. Do you agree?

Evelyn Jacks is president of Knowledge Bureau and author of 51 books on tax and personal wealth management. She will be speaking on the national Distinguished Advisor Workshop tour May 21-June 3. Follow Evelyn on Twitter at @EvelynJacks.


Should Top Incomes Be Subject To Higher Taxes?

As provinces in Canada attempt to add surtaxes to top earners in Canada, the most recent being Ontario in its defeated May 1 budget, a debate on whether top incomes should be subject to more tax continues.

This month, the OECD jumped in with a study on the subject entitled “Focus on Top Incomes and Taxation in OECD Countries: Was the crisis a game changer?” 

The issue is that the total pre-tax income of the richest 1% has increased in most OECD countries over the last three decades, and while the financial crisis interrupted the rise, top incomes quickly recovered. In that time, top rates of personal taxes decreased in almost all the OECD countries. Not surprising, it was found that while most of these people had high wages, salaries, bonuses and stock options, they also had more disposable income for capital and business investment. These investments generated more income the richer people got. In Canada, for example, the richest of the rich receive about 20% of their income from capital; in France, that figure is almost 60%.

Interestingly, reducing top rates of income taxes also reduces the incentive to engage in tax planning to avoid or evade taxes, the study found, leading to more income being declared for tax purposes.

As governments struggle with tight budgets, the study suggests several options are available for increasing average tax rates paid by the rich without necessarily raising marginal tax rates. They include:

  1. Abolishing or scaling back tax deductions, credits and exemptions that benefit the rich disproportionately.
  2. Taxing all remuneration from employment, including fringe benefits and stock options as ordinary income (subject to full income inclusion)
  3. Shifting tax mixes to rely more on recurrent property taxes
  4. Reviewing new forms of wealth taxes, such as inheritance taxes
  5. Improving transparency and tax compliance, particularly internationally
  6. Broadening the base for income tax to reduce avoidance opportunities.

It’s Your Money. Your Life. It’s quite possible we are currently within one of the lowest taxed periods for income, capital and transitioning wealth in this century. Professional advisors will want to take this into account in family transition planning sooner rather than later, because many options exist to preserve wealth, tax efficiently. This is the subject of our national think tanks starting in Winnipeg May 21 and then moving to Calgary, Vancouver, Toronto and Halifax. Please join us by reserving your spot by May 15.

Evelyn Jacks is president of Knowledge Bureau and author of 51 books on tax and personal wealth management. She will be speaking on the national Distinguished Advisor Workshop tour May 21-June 3. Follow Evelyn on Twitter at @EvelynJacks.


Will Addition of Mandatory Provincial Pension Plans Help?

Details for a new Ontario Retirement Pension Plan (ORPP) were included in the May 1 Ontario budget and have become an election issue there. Some disagree that the plan is necessary; others are concerned about the immediate economic costs.

The goal of the proposed ORPP is to replace 15% of pre-retirement income. Examples in the budget documents indicate an actual rate of 14.24% of the insurable earnings if contributions are made for 40 years. Structurally, the plan would mirror the federal Canada Pension Plan in that it would be mandatory for all employers and their employees in Ontario, except for those who currently belong to company pension plan deemed to be adequate. The budget proposed that the contributory rate be 1.9% of contributory earnings from the employee and a matching 1.9% from the employer, based on maximum contributory earnings of $90,000 annually. These thresholds would increase annually consistent with CPP increases. It is unclear what the level of any low income exemption might be.

Jack Mintz, head of the School of Public Policy at the University of Calgary and who has twice been a guest speaker at the Distinguished Advisor Conference, prefers the Pooled Retirement Pension Plan regime over the Ontario Retirement Pension Plan (the Ontario government also announced its’ intention to introduce legislation in the fall of 2014 for Pooled Retirement Pension Plans largely consistent with the framework introduced federally and previously adopted by various provinces, but with the following features), and questions whether the ORPP is the right strategy for the times.1

Dr. Mintz notes “Studies by McKinsey and Statistics Canada, which are the best done, show that about 80% of Canadians have more than adequate retirement income. In fact recent Statistics Canada work suggests over-saving, which some behavioural economists have attributed to excess of precaution over risk. . . For about 80% of the population, the mandatory plan will not increase saving but reduce investment in other assets. With higher employer contributions, the plan will certainly have an impact on labour markets.”   Opposition parties agree that this is not the right time to introduce this new “tax” burden on business, which could dampen employment or worse cause some layoffs.2

This commentary is interesting because it speaks to both to the positive preparedness of a majority of today’s pre-retirees and required precaution in planning for high risk groups, including singles and the under-employed,  and perhaps most important, the business community which is expected to propel Canada’s economic growth. 

It’s Your Money. Your Life. Retirement income planning can bring peace of mind for all stakeholders involved. It’s been our experience in teaching the subject over the last decade that the most effective retirement income planning can be significantly enhanced with tax planning. If you are unclear about your own preparedness, or that of your clients, post-tax season is a good time to review the strategy. We look forward to discussing these issues in depth at the upcoming one-day Distinguished Advisor Workshops to be held May 21–June 3 in Winnipeg, Calgary, Vancouver and Toronto, and Halifax.

Evelyn Jacks is president of Knowledge Bureau and author of 51 books on tax and personal wealth management. She is also the founder and director of the Distinguished Advisor Conference (DAC). The theme of the 2014 three day think tank in Horseshoe Bay, Texas Nov 9-12 will be “Think BIG: Find the Sweet Spots in Wealth Management”  Follow Evelyn on Twitter at @EvelynJacks.

——-

1 Financial Post: Jack Mintz: Ontario pension unnecessary and expensive. Published May 1, 2014
2 CBC.ca: Ontario’s Retirement Pension Plan: how would it work? Posted May 6, 2014.