As the tax season begins, let’s review a recent case my team and I encountered and how it might help you.

Recently, John (widowed), who had always been relatively healthy, had a health issue and was worried about the eventual tax bill facing his estate if he were to pass away sooner than expected. He wanted to leave as much as possible to his two adult children and was aware of the eventual tax liability due to his registered investments.

John recently came to me for some advice about minimizing his taxes payable upon death. He was very aware that his registered retirement income fund (RRIF) would be considered income and be subject to taxation. This would have put John’s income in the highest tax bracket as he still had substantial capital remaining in his RRIF. John had always withdrawn the minimum required from his RRIF to avoid paying extra taxes. This is a strategy often seen with retirees, but is it always the best course of action?

After analyzing John’s financial situation and taking into consideration his goals for the future, my team and I came up with a strategy allowing John to deregister more than the required amount from his RRIF. This would take advantage of John’s lower tax rate today, compared to being taxed at the highest marginal tax bracket upon death. Finally we used John’s extra RRIF withdrawals to max out his Tax Free Savings Account, further continuing tax free growth. John’s lifestyle hasn’t changed whatsoever, but he can now sleep comfortably knowing more of his hard earned wealth will be going to his adult children.



Disclaimer: Information provided is for illustrative purposes only and should not be considered investment advice. In this case study all names have been changed to protect the partiesprivacy. The information provided is not a guarantee of future results. No reliance should be placed on any such information when making an investment decision. Nothing herein is intended as an endorsement by any person of Harbourfront Wealth Management Inc. nor should the information be construed as a statement of a typical client’s experience with Harbourfront Wealth Management Inc. No guarantee of investment performance is being provided and no inference to the contrary should be made. Harbourfront Wealth Management Inc. is a member of the Investment Industry Regulatory Organization of Canada “IIROC” and the Canadian Investor Protection Fund “CIPF”



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