#RetirementPlanning #TaxStrategies #SavingsWithdrawal
Hey everyone! 👋 Planning for retirement can be overwhelming, especially when considering the best order to withdraw funds and savings to minimize taxes. If you’re in a situation with high unrealized non-registered account capital gains, here are some thoughts:
– Start by withdrawing from your non-registered accounts, as these will likely incur the highest tax implications due to the capital gains.
– Consider withdrawing from your RRSP next, as these withdrawals are taxed as income.
– Leave your TFSA for last as withdrawals are tax-free and can be passed on to your family tax-free in the event of your passing.
As for your professional corporation, seeking advice from a tax professional on potential strategies to minimize taxes upon transferring shares to your children could be beneficial.
What are your thoughts? Do you have any suggestions or strategies to share? Let’s help each other navigate the complexities of retirement planning! 💡💰#FinancialFreedom #EstatePlanning #TaxEfficiency
General principle is to reduce as much of your future tax burden as possible, especially if you have any no/low income years. I’d suggest you delay CPP & OAS and use those years to start to bleed down taxable accounts. If you are planning on retiring early, you can consider taking a gap year / sabbatical to do the same. For something like non reg it might just mean selling then rebuying again just to realize the gains.
In my conversations with a CFP/CIM, it’s generally best to first draw down taxable accounts, and fill with RRSPs up to the tax bracket. Having at least some income (dividend, interest) as opposed to purely capital gains is also advisable as to avoid the alternative minimum tax (AMT).
If you have enough money to retire at 31 then you have enough money to pay a professional to run the numbers for you. They have special programs that deal.with the complicated calculations and can make a report for you outlining when to withdraw and from which account etc. They cost a few thousand but can save you hundreds of thousands over your life time.
talk to an actual CFP and/or CPA. there is a way to setup holding company and crslystalize your corporate asset and pass on continuing revenue/profit to your shareholders. also utilize the 60k corporate dividend to yourself every year to max out your personal investment accounts.
TFSA and RRSP can be used as vehicles to pass on inheritance to your kids. these should be withdrawn last.
also consult your CPA on how to borrow equity from your non registered investment account on margin, then use dividend to pay off interest to write off dividend income with the margin interest expenses. at this point, your portfolio should be geared towards income generation. this way, you can avoid paying cap gain tax until you pass away.
long story short, you need to pay for a competent CFP and/or CPA
You should engagewith a fee only Certified Financial Planner to help you develop a plan that minimizes taxes.
Yes, generally TFSA is always last to pull from.
And you put no numbers so work with a CFP to have a plan.
There is a good YouTube channel called Parallel Wealth. Adam gives out a lot of information about this topic. Check it out.
For the corp, look into setting up an estate freeze and a trust fund. That’s the most tax efficient way to pass down the wealth. Draw down your non – corp accounts first, non-registered, then RRSP, then TFSA.
Not an actual advice of course, you need to meet with a good accountant / wealth advisor.