“Welcome to the PlanEasy blog! We make personal finance easy.

Thanks for visiting.”

– Owen

Don’t Get Surprised By OAS and CPP Survivor Benefits

Don’t Get Surprised By OAS and CPP Survivor Benefits

For many retirees, CPP and OAS make up a significant portion of their retirement income. A disruption to either of these income sources can be very stressful. Even more so because this disruption follows the unexpected death of a partner or spouse.

Many retirees may not realize, but OAS and CPP survivor benefits are significantly reduced, anywhere from a 40% reduction to a full 100% reduction!

For lower income households, pension benefits like CPP and OAS can provide 50%-75% of their retirement income. For very low income households, CPP and OAS, when combined with other low-income benefits like GIS, can easily make up 100% of retirement income for some couples. Losing these benefits can be a big change to their retirement plan.

Even for higher income households, who may have significant assets in either RRSPs or TFSAs, it’s not uncommon for CPP and OAS to make up 25%-30% of their retirement income.

A disruption to this income can be devastating for some retirement plans, and what many people may not realize is the extent to which some of these benefits can be reduced when a partner passes away.

Although difficult and unpleasant to even think about, the impact of a partner passing is an important consideration for many retirement plans. It’s important to understand what changes there might be to both retirement income and retirement spending if the unfortunate were to happen.

For some plans, those which have a large amount of investment assets, the risk is smaller. Investment assets inside RRSPs and TFSAs can be transferred through spousal rollovers with no tax consequences. So, the disruption to these plans may be smaller.

But for most plans, the risk and disruption of an unexpected death can be quite large, especially in certain circumstances. In the worst-case scenario, the loss of CPP and OAS combined can represent more than $20,000 per year in lost retirement income!

read more
What Is “Adjusted Cost Base”? And Why Every Investor Should Know

What Is “Adjusted Cost Base”? And Why Every Investor Should Know

For many investors adjusted cost based is something they may never need to worry about (but should still be aware of!) For most investors who are only using tax-sheltered accounts like the TFSA or RRSP, they never need to worry about adjusted cost base (or ACB for short).

This is because ACB is only required to calculate capital gains tax, and because most investors are investing inside a tax-sheltered account like a TFSA or RRSP, this is a non-issue.

But for anyone with investments outside of a tax-sheltered account, adjusted cost base is extremely important! And your ACB is something that you need to stay on top of.

Adjusted cost based is something every individual investor needs to track on their own. Yes, some mutual funds or robo-advisors or even brokerage accounts track adjusted cost based, but in the fine print they typically tell investors to track it themselves too. Why? Because they don’t want to be held accountable for a tax issue in the future.

Here’s why we need to worry about ACB and some tips on how to track it…

read more
The Best Parts Of A Financial Plan

The Best Parts Of A Financial Plan

Financial planning is a fascinating process. When building a financial plan there are equal parts of finance (math, numbers, money etc), and personal (values, goals, risk aversion etc). This makes every financial plan unique. No two financial plans are the same. Even when two people start with the exact same income, assets, debt and expenses, the fact is their plan will differ because they have different goals and personal values.

Even though the plan may differ, there are certain parts in a financial plan that never change. There are net worth projections, income projections, cash flow planning, income and expenses etc etc.

In this post, I’m going to highlight some of my favorite parts of a financial plan. These are what I would consider to be the best parts of a financial plan, the most interesting, the best of the best. But it doesn’t represent everything. There are many great parts of a financial plan and the “best” part can differ from plan to plan.

For example, we won’t talk about government benefits below, but for many households, especially those with children under the age of 17, government benefits play a big role in their financial plan. We recently did a plan for a young family where a few small changes allowed this family to reduce their income tax and increase their government benefits by $100,000+ over the course of their plan! That would definitely be the best part of that plan!

What we will cover in this post are net worth projections, debt payoff plans, planning around different income sources, and how we understand the “success rate” of a plan.

read more
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Owen Winkelmolen

Fee-for-service financial planner and founder of PlanEasy.ca

“Welcome to the PlanEasy blog! We make personal finance easy.

Thanks for visiting.”

– Owen

New blog posts weekly!

Tax planning, benefit optimization, budgeting, family planning, retirement planning and more...

Don’t Get Surprised By OAS and CPP Survivor Benefits

Don’t Get Surprised By OAS and CPP Survivor Benefits

For many retirees, CPP and OAS make up a significant portion of their retirement income. A disruption to either of these income sources can be very stressful. Even more so because this disruption follows the unexpected death of a partner or spouse.

Many retirees may not realize, but OAS and CPP survivor benefits are significantly reduced, anywhere from a 40% reduction to a full 100% reduction!

For lower income households, pension benefits like CPP and OAS can provide 50%-75% of their retirement income. For very low income households, CPP and OAS, when combined with other low-income benefits like GIS, can easily make up 100% of retirement income for some couples. Losing these benefits can be a big change to their retirement plan.

Even for higher income households, who may have significant assets in either RRSPs or TFSAs, it’s not uncommon for CPP and OAS to make up 25%-30% of their retirement income.

A disruption to this income can be devastating for some retirement plans, and what many people may not realize is the extent to which some of these benefits can be reduced when a partner passes away.

Although difficult and unpleasant to even think about, the impact of a partner passing is an important consideration for many retirement plans. It’s important to understand what changes there might be to both retirement income and retirement spending if the unfortunate were to happen.

For some plans, those which have a large amount of investment assets, the risk is smaller. Investment assets inside RRSPs and TFSAs can be transferred through spousal rollovers with no tax consequences. So, the disruption to these plans may be smaller.

But for most plans, the risk and disruption of an unexpected death can be quite large, especially in certain circumstances. In the worst-case scenario, the loss of CPP and OAS combined can represent more than $20,000 per year in lost retirement income!

read more
What Is “Adjusted Cost Base”? And Why Every Investor Should Know

What Is “Adjusted Cost Base”? And Why Every Investor Should Know

For many investors adjusted cost based is something they may never need to worry about (but should still be aware of!) For most investors who are only using tax-sheltered accounts like the TFSA or RRSP, they never need to worry about adjusted cost base (or ACB for short).

This is because ACB is only required to calculate capital gains tax, and because most investors are investing inside a tax-sheltered account like a TFSA or RRSP, this is a non-issue.

But for anyone with investments outside of a tax-sheltered account, adjusted cost base is extremely important! And your ACB is something that you need to stay on top of.

Adjusted cost based is something every individual investor needs to track on their own. Yes, some mutual funds or robo-advisors or even brokerage accounts track adjusted cost based, but in the fine print they typically tell investors to track it themselves too. Why? Because they don’t want to be held accountable for a tax issue in the future.

Here’s why we need to worry about ACB and some tips on how to track it…

read more
The Best Parts Of A Financial Plan

The Best Parts Of A Financial Plan

Financial planning is a fascinating process. When building a financial plan there are equal parts of finance (math, numbers, money etc), and personal (values, goals, risk aversion etc). This makes every financial plan unique. No two financial plans are the same. Even when two people start with the exact same income, assets, debt and expenses, the fact is their plan will differ because they have different goals and personal values.

Even though the plan may differ, there are certain parts in a financial plan that never change. There are net worth projections, income projections, cash flow planning, income and expenses etc etc.

In this post, I’m going to highlight some of my favorite parts of a financial plan. These are what I would consider to be the best parts of a financial plan, the most interesting, the best of the best. But it doesn’t represent everything. There are many great parts of a financial plan and the “best” part can differ from plan to plan.

For example, we won’t talk about government benefits below, but for many households, especially those with children under the age of 17, government benefits play a big role in their financial plan. We recently did a plan for a young family where a few small changes allowed this family to reduce their income tax and increase their government benefits by $100,000+ over the course of their plan! That would definitely be the best part of that plan!

What we will cover in this post are net worth projections, debt payoff plans, planning around different income sources, and how we understand the “success rate” of a plan.

read more
Page 4 of 44...23456...

New blog posts weekly!

Tax planning, benefit optimization, budgeting, family planning, retirement planning and more...

New blog posts weekly!

Tax planning, benefit optimization, budgeting, family planning, retirement planning and more...

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