HOW CAN I REDUCE THE AMOUNT OF TAX I PAY?

1. Make RRSP contributions to optimize your tax situation

2. Couples should aim for their retirement incomes to be roughly equal, through the use of various investment strategies such as spousal RRSP contributions

3. Utilize any tax free transfers that are available to your RRSP i.e. if you receive a retiring allowance

4. Work to develop a portfolio that optimizes different investments but is tax efficient

5. Become aware of certain investments that may offer tax advantages - segregated funds, Labour Sponsored Funds, Mutual Fund Trusts

AT RETIRMENT

1. Purchase insurance to cover potential capital gain taxes on vacation properties and investments so that when it is time to transfer the assets you or your heirs will not face a huge tax bill

2. Determine if a prescribed annuity may fit your situation, since this type of investment vehicle provides a regular income and spreads the tax evenly over the term of the annuity

3. Minimize probate fees by naming a beneficiary on your insurance policies and investment policies

HOW ARE DIFFERENT TYPES OF INCOME TAXED?

1) DIVIDENDS: from taxable Canadian corporations eligible for dividend gross up and federal and provincial tax credits
2) INTEREST INCOME & OTHER DIVIDENDS: fully taxed at investor's marginal tax rate
3) CAPITAL GAINS: taxable capital gain is a set % of the capital gain

This material is for information purposes only and should not be construed as legal or tax advice. Every effort has been made to ensure its accuracy, but errors and omissions are possible. Individual circumstances may vary and specific legal and tax advice is recommended. Future tax changes and market conditions may affect this information.

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