What We Do

If you're retired, you know firsthand how difficult it can be to get a satisfying retirement income.

Traditional retirement Investments Like GICs and bonds continue to pay very low interest after taxes and inflation there can be very little left over.

What's more people are living longer so they need their retirement savings to last longer too.

So what can you do to maximize your after tax retirement income without taking on too much risk?

Here are a few ideas.

First, get the most out of your interest paying investments with a GIC or bond ladder.

For example, with a 5-year Bond ladder you invest equal amounts in a 1, 2, 3, 4 and 5 year bond.

Now as each bond matures you reinvest in a new five-year bond. At the end of five years you hold only five year bonds.

The advantage?

Longer-term bonds historically pay higher interest than shorter term bonds.

Second, look at other investments that pay higher income.

Some options include corporate bonds, insurance company guaranteed investments, and dividend paying stocks.

They all have higher risk than traditional GICs and government bonds, to varying degrees, but you can reduce the risk through diversification.

The key is to find the right balance between higher income and lower risk based on your individual situation.

Third, consider how different investments are taxed in your regular non-registered accounts.

For example, dividends from Canadian corporations enjoy tax advantages while interest from GICs and bonds are fully taxable.

Sticking with the tax theme, also consider income splitting with your spouse to enhance your combined after-tax income.

With this strategy you transfer income from the higher-income spouse to the lower-income spouse so your combined tax rate is lower.

You can split up to 50% of your eligible pension income like RIF income with your spouse.

You can also split income with a spousal RSP or a spousal loan strategy.

These are just a few ideas for enhancing your retirement income.

If you would like more ideas specific to your situation, I invite you to contact an RBC Wealth Management advisor.

These days it can seem like there's a tax on everything and with Canada's progressive tax system the more income you earn the higher your tax rate.

If you face a high tax burden, you'll be interested in how you can reduce it or at least manage it.

One way is with insurance.

Most people think of insurance for their home, their Auto and life.

But did you know that life insurance can help cover the taxes due when your estate is settled?

What's more there are Insurance based investment strategies that can provide tax free income during your retirement and tax-free benefits to the beneficiaries of your Estate.

Another way is with family income splitting.

Family income splitting involves transferring investment income that would otherwise be taxed at your higher tax rate to family members who are taxed at lower rates.

Here are two additional ways to split income with your family.

One, a family trust which enables you to provide funds for your children or grandchildren’s needs while reducing taxes.

Two, a spousal loan strategy which enables your lower income spouse to earn investment income at their lower tax rate.

Here's some other ways to reduce tax.

If you have an RRSP contribute as much as you can to maximize the tax deferred growth over time.

Also take advantage of the tax free savings account if you haven't done so already to earn tax-free investment income.

Next look at your non-registered savings and how the different types of investments are taxed.

Capital gains and dividends from Canadian corporations received preferential tax treatment while interest income from GICs or bonds is fully taxable at your marginal rate.

Here's a tip - put more of your interest-bearing investments in your registered accounts like your RRSP where they are sheltered from taxes, then put more of your taxed advantage dividend-paying investments into your non registered accounts.

And here's one more tip.

Always make sure you speak with a qualified professional tax advisor to get the right tax advice for you.