Are you on track to achieve your
retirement goals?

Unlike during their working years when many rely on their salary for income, retirees can expect to draw an income from multiple sources. These may include any combination of the Canada/Quebec Pension Plan, Old Age Security, your Registered Retirement Savings Plan (RRSP)/Registered Retirement Income Fund (RRIF), your Tax-Free Savings Account (TFSA), non-registered investment accounts, proceeds from a real estate sale, money in a savings account, an annuity or workplace pension income, and other savings.

Most retirees will receive some form of guaranteed income, whether from CPP/QPP, OAS, an employer pension or an annuity. These will typically form a base to meet some of the retirement income needs. Retirement savings can then be used to supplement these sources and fill any gaps. How you draw from your various saving vehicles will depend on many factors, including the amount in each vehicle, your current and future projected tax brackets, the accrued gains on your non-registered investments and your desire to leave certain assets to your heirs. Ask your IG Consultant for help in designing a customized withdrawal plan for you.

While you may have just a few years to go until retirement, it’s not too late to take action. First, you’ll need to work with your IG Consultant to create a comprehensive financial plan to determine whether or not you’re on track to meet your retirement goals. If you are, then just continue executing the plan. If not, then you’ll need to assess your options. If possible, you could start saving more per paycheque or adjust your spending to shore up some cash, which can then be put into an investment account. If additional savings are not possible, then you may have to look at options such as delaying your retirement date or reducing what you hope to spend in retirement. Your IG Consultant can help.

If certain conditions are satisfied, a sale of the shares of a Canadian controlled private corporation may allow the individual seller to claim what is known as the lifetime capital gains exemption. This exemption allows the seller to not pay any tax on some or all of the capital gains realized on the sale of the shares, subject to a lifetime dollar limit. Your IG Consultant explain the conditions that apply to benefit from this exemption so you can work with your tax professionals on maximizing the after-tax value of the sale proceeds.

If you sold the shares of your incorporated business, you would have the after-tax proceeds to invest either in registered (to the extent you have room available in your RRSP or TFSA) or non-registered investments. These would form part of your available assets to fund your retirement needs. If your corporation sold its assets and you now have shares of the corporation that owns passive investments, there are a number of strategies that allow you to pull funds from the corporation to help fund your retirement needs. Talk to your IG Consultant about how best to draw from the combination of your personal and corporate assets to achieve the best after-tax results.

Your IG Consultant would begin by helping you do an insurance needs analysis to help determine if you have a need for life insurance. If a need is identified, then a decision must be made as to whether the insurance should be help personally or inside the corporation. Typically, for tax reasons the payment of the insurance premiums by the corporation provides the best result. Where to hold the insurance would be assessed by your IG Consultant, who can also access our in-house insurance specialists if needed.

Not at all. Having chosen to leave the corporate profits to be invested in the company may have been the best option long-term. The question may be more related to how to monetize the value of the business to help provide a retirement income source. The first thing to do is to create a financial plan that looks at a combination of your personal and business assets. The plan should project what your income needs would be once retired while looking at where to best draw funds to meet those needs. Your IG Consultant can work with you to build this plan.