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Financial Planning Checklist for Seniors

Thirteen Factors To Consider in 2015

Preserving and growing your wealth means taking advantage of tax, investment and estate planning strategies. While some strategies are available throughout your lifetime, others are available only after the age of 65. This checklist looks at financial planning considerations for seniors, and offers an overview of commonly used tactics. All references to a spouse in this article include a common-law partner.

Pension Income Splitting: If your spouse has a lower marginal tax rate, consider splitting eligible pension income with your spouse to reduce your family’s overall tax bill. Examples of eligible pension income when you are 65 years of age or older include withdrawals from RRIF and LIF accounts. Using this strategy may allow you to have up to 50% of your eligible pension income taxed at your spouse’s lower marginal tax rate.

Forgotten RRSP Contribution: If you are turning 71 years of age this year and are still earning RRSP contribution room, consider making a final RRSP contribution (based on your earned income for 2015) by Dec. 31, 2015, before converting to a RRIF. Although you will be subject to a 1% over-contribution penalty for the month of Dec., it is likely that the taxes saved by deducting the contribution on your 2016 (or subsequent) tax return will far outweigh the one month penalty.

Spousal RRSP Contribution: If you are older than 71 years of age, have remaining RRSP contribution room and have a spouse who is 71 years of age or younger, consider making  a contribution to a spousal RRSP to obtain a deduction on your tax return and to maximize your family’s retirement savings.

Using Your Spouse’s Age for RRIF Minimum Payments: By the end of the calendar year in which you turn 71 years of age, you are required to convert your RRSP into a RRIF. If you have a younger spouse and you do not need the mandatory annual minimum RRIF payments, consider using your spouse’s age  to minimize your withdrawals.

Tax-Free Savings Account (TFSA) Contribution: Consider contributing the annual maximum ($10,000 in 2015) to your TFSA. All TFSA investment growth, income and withdrawals are tax-free. The TFSA can also be used to shelter money that you may not currently need. If you have never contributed to a TFSA before, your contribution room could be as high as $41,000 in 2015.

Old Age Security (OAS): OAS benefits are available to anyone 65 years of age or older who meets the eligibility requirements. You can postpone receiving your OAS payments for up to five years. If you postpone taking your OAS, you will receive a higher OAS monthly payment. The maximum benefit for January to March, 2015 is $563.74 per month. This income-tested benefit is clawed back at a rate of $0.15 for every $1 of net income over $72,809 and is fully clawed back once net income reaches $117,909.

Canada Pension Plan (CPP): If you have ever worked in Canada, you may be eligible to receive CPP payments. The CPP payments are not subject to clawback based on your income level. To split income with your spouse and possibly reduce your family’s overall tax bill, consider sharing this government pension with your spouse. You are also able to delay receiving your CPP pension. If you delay receiving your pension, your monthly payment amount will increase for each month you delay receiving it up to age 70.

Pension Income Tax Credit: You may be entitled to receive a federal non-refundable pension tax credit on the first $2,000 of eligible pension income you receive in the year. Eligible pension income includes payments from your company’s pension plan or Retirement Compensation Arrangement (RCA) as well as payments from your RRIF and LIF. OAS payments as well as CPP payments do not qualify as eligible pension income. You may also be eligible to claim a corresponding provincial or territorial credit.

Gifting Assets: Gifting assets to your children or grandchildren during your lifetime is a simple strategy which avoids probate and achieves income splitting. For tax purposes, you are deemed to have disposed of the assets you gift and you may be subject to taxes on any capital gains realized on the transfer. Also, if you make gifts to minors, beware of the attribution rules which could result in all dividend and interest income being attributed back to you and taxed in your hands.

In-Kind Gift of Publicly Traded Securities: If you have philanthropic intentions, consider gifting your publicly traded securities directly to a qualified registered charity. Any capital gains in these securities should be exempt from tax. You will also receive a donation tax credit equivalent to the fair market value of your in-kind security donation, which will reduce your overall tax bill.

Age Amount Tax Credit: If you are 65 years of age or older you may be able to claim the age amount on your tax return. The age amount is a federal non-refundable tax credit of $1,055 (15% of $7,033 for 2015). The credit is reduced by $0.15 for every $1 of net income above $35,466, and is completely eliminated when your net income is $82,353 or higher.

Insured Annuity: Consider purchasing an insured annuity as a tax-efficient method to increase your retirement income.


Estate Planning: Ensure that your Will, Power of Attorney for Property and Power of Attorney for Personal Care documents are valid, up-to-date and still reflect your wishes.


This article outlines several strategies. The information is not intended to provide legal or tax advice. To ensure that your own circumstances have been properly considered and that action is taken based on the latest information available, you should obtain professional advice from a qualified tax and/or legal advisor before acting on any of the information in this article.