God bless the PPP/C and its President.

https://www.facebook.com/10000...eos/3463827803869002

https://www.youtube.com/watch?v=cKU1e46UzoQ

https://www.youtube.com/watch?v=ALLonwYB9Lg

When a spouse loses their partner, benefits are available to them through the government, such as the CPP Survivor’s Pension.

What is the CPP Survivor’s Pension?

Thanks for your email, Kevin. Losing a spouse or common-law partner is one of the most challenging experiences we can face in our lifetimes. The Canadian government does offer a benefit payment program under the Canada Pension Plan (CPP) program for surviving spouses that could be payable to you if you qualify. It is called the CPP Survivor’s Pension, and it is a monthly payment paid to the survivor that helps to cover the pension payment the deceased would have received while still alive.

Who can qualify for survivor benefits?

The CPP Survivor’s Pension benefit is only payable to select Canadians. To qualify, the applicant must be legally recognized as the common-law partner to or married to the deceased. For married people, both people’s names are on the marriage license. And to be deemed common-law, partners must be two people in a conjugal relationship for at least one year. The Statutory Declaration of Common-law Union form needs to be completed to declare a common-law relationship.

How much is the CPP Survivor’s Pension?

The amount varies from couple to couple, as the survivor’s benefit payment is based on a calculation of a variety of factors, Kevin. Here’s what you need to calculate how much you may receive from a survivor benefit:

1. The CPP benefit amount that the deceased received before they passed away or would have received by age 65.
2. The surviving spouse’s age. If they are older than 65, then they will receive 60% of the CPP pension listed in step 1. If they are younger than 65, they will receive a flat-rate portion and 37.5% of the CPP pension from step 1.
3. This final step depends on whether the surviving spouse already receives other CPP benefits. For example, if they already receive a disability pension or the CPP retirement pension, they cannot accept the full survivor benefit. The payment is combined with other benefit payments. How much is paid depends on the type of pension and the maximum benefits. The Government of Canada has published a table that outlines the different benefits and can be found on their services and benefits page.

How to apply for a survivor’s pension?

Kevin, to apply for the CPP Survivor’s Plan, you have a couple of options available to you. However, regardless of which one you choose, you can expect to receive payments approximately six to 12 weeks after Service Canada receives your application.

Online

You can apply for the benefit by logging into your My Service Canada account and completing the application form. From there, you can drop off the requested additional information and documents to a Service Canada office closest to you. Remember that when dropping off paper documents, you should write both your and your spouse’s social insurance number (SIN) on every page, so the forms can be tracked to you.

By mail

You can print the application form found on Canada.ca, the federal government’s website. Fill it out and put it in an envelope along with all the required documents listed, and drop off or mail the package at the provincial or territorial Service Canada office closest to where you live. Don’t forget to include both SINs for you and your spouse on every page. And like with anything involving money, be sure to send it via registered mail if you’re not able to hand deliver it.

If more than 12 weeks have passed since you applied and you have no word from Service Canada, contact the Canada Pension Plan (1-800-277-9914). As of the date of this publication, the hold times were averaging about an hour. So, if you do call, I recommend settling in with a snack when you’re in the mood for elevator music.

Should you apply for the survivor benefit?

Kevin, the good news is that the CPP Survivor’s Pension is available to those who have lost their spouse or partner, and it can help with the loss of household income. With a little bit of homework filling out forms, you should see your payment come to you after approximately six to 12 weeks.

https://www.moneysense.ca/colu...p-survivors-pension/

What tax returns should be completed when someone passes away? Why do these returns need to be filed?

Benjamin Franklin once wrote that “nothing is certain, except death and taxes.” Death is inevitable; however, how much tax we pay is unique to each Canadian. Not everyone “pays tax,” as it depends on income level. So, for the sake of this column, let’s tweak it to read: “Nothing is certain, except death and tax returns!”

Also, taxes are not just for the living. When a person passes away, there are several tax returns to know about. And tax returns can be a complicated process on the best of days. For example, when someone passes away, navigating their taxes becomes an even more perplexing process as the taxpayer essentially files their taxes two times—more on that later. But first, four things to know when filing a tax return for someone who has passed away in the previous year.

4 changes for filing tax returns when someone passes away

There are items to be mindful of when preparing the final return for someone. To keep things simple, I will cover a few of the points most will encounter. If you find you’re dealing with a more complex tax return, consider working with an accountant.

1. The type of tax return used when someone dies
   The tax return prepared for the year someone passes away is called a “Final T1 General Tax Return,” and it is commonly referenced by accountants as the “Terminal Return.” It works like a regular annual return but with a few differences you should be aware of.

2. The deadline for a final tax return
   Every Canadian is required to file a tax return for income earned in the preceding year by April 30. This year, that date falls on a Sunday, so May 1, 2023, is when the T1 General Tax Return for 2022 is due (unless you or your spouse are a business owner, then the deadline is June 15, 2023). The same is true when someone passes away, except the ending period of the tax return would be the date of death instead of December 31. And the deadline to file and pay taxes for someone who has died, if they passed between November 1 and December 31, 2022, is six months after the date of death. Otherwise, the May 1, 2023, deadline is still to be followed.

3. The name of the deceased as it appears on the return
   Typically, your tax return lists your legal name, like Jane Doe. However, on the final return for a deceased person, the naming convention would be: The Estate of Jane Doe.

4. The disposition of assets
   The last main difference—and quite possibly the most intricate—would be the disposition of assets and property. Canadians hold different types of assets throughout our lifetimes that we do not have to report on an annual tax return. That is until these are sold or disposed of, and we claim a capital gain or loss. Claiming a loss is trickier (see in this video), but capital gains tax is applied to 50% of the income earned, based on your tax bracket.
   For example, if you bought a stock for $10,000 and then sold it 10 years later for $25,000, you have a capital gain of $15,000, and you would include a $7,500 taxable capital gain (50%) on your tax return.
   The same holds true in the year of death. However, we cannot take our assets and possessions with us upon death, which means that death is a large tax event as everything we own is deemed to be disposed of and reported on this final tax return based on the market value on the date of death.

5. Next, what is an estate tax return? Does your estate report income after your death?

   Remember how I mentioned earlier that when someone dies, taxes are filed twice? On the final return, as noted above, income up to death is reported. However, the tax filing process does not stop there, as income may continue to accrue on assets after the date of death. This is when an estate is created, and it carries on until the executor wraps everything up. Therefore, starting the taxes for the “second time,” the estate (not the executor) assumes the responsibility of claiming any income earned from the date of death onwards.

   It is no secret that wrapping up an estate is a lengthy and time-consuming process. This is because many steps are taken to finalize the paperwork for someone’s death. Common delays include identifying assets that the deceased owned, all their debt, applying for probate, selling off assets like property and investments, and ensuring the estate is liquidated if applicable.

   Since all these tasks take time, it is pretty typical for assets to earn income while held in their original date of death form. Dividends and interest may continue to be deposited to an investment account after the account holder dies. Their rental properties will still earn monthly income. And other assets may continue to rise or fall in value after death until these are sold.

   All these extra earnings are reported on the estate’s tax return, also known as a T3 Trust Income Tax and Information Return. There are also less common optional returns like a Return for Rights or Things or a Return for Partner or Proprietor that may be filed to report income earned but not paid as of the date of death.

   The trust return is filed for each year that the estate is active until all distributions are made to the beneficiaries, and the estate no longer holds anything and can be closed.

   Also, an estate can report the Canada Pension Plan (CPP) death benefit payment—which can be up to $2,500—on the T3 return.

6. The deadline for a T3 return depends on the tax year-end for the estate, which is based on when the estate is created. A prudent executor should hire a tax professional to ensure that all tax points are covered and any tax elections that can be explicitly made based on the estate’s situation are appropriately done. Income taxes can be more complicated upon the death of a taxpayer. However, with planning and professional guidance, executors can take it one step at a time, one tax return at a time.

7. Planning for the unplannable

   While taxes are predictable, someone’s passing isn’t always something we can be ready for. By working with a Certified Financial Planner and a tax accountant, you can do some tax prep, learn about the optional tax returns available for your specific situation and, perhaps, save some tax along the way. And figuring out your estate planning, you are reducing the tax burden for our estate and our loved ones.

8. https://www.moneysense.ca/save...gets-done-in-canada/

https://www.moneysense.ca/colu...-changes-in-ontario/

Virtual signing and remote witnessing are now permanent options for clients and lawyers creating wills and powers of attorney in Ontario. Here’s how these and other changes might affect your estate plans.

Ontario will see a few notable estate planning changes, now that Bill 245 has received royal assent.

WATCHING movies in the theatre has been a popular pastime for Guyanese since time immemorial, and once the local cinemas install a special filter to help constrict the spread of the virus, COVID-19, cinemas will finally be allowed to reopen.

This was highlighted by Minister of Health, Dr Frank Anthony on Wednesday during his daily COVID-19 Update. Then, the minister highlighted that an assessment of the cinemas geared at determining how they can be safely reopened was conducted. That assessment yielded the suggestion that cinemas can use Hepa filters.

The Mayo Clinic in the United States explained that High-efficiency Particulate Air (HEPA) filters are a type of air filter that removes small particles and contaminants from the air. They can be attached to ventilation and air conditioning systems.

“A HEPA filter does not kill the COVID-19 virus, but the elements that can transport the virus attach to the filter so they cannot circulate in your living area,” the clinic said.

And, Dr Anthony related that these filters have been suggested for cinemas so that even if a patron who is asymptomatic (infected with COVID-19 but not displaying any symptoms) occupies that space, the filter would be able to clear the air of the viral particles which can be transmitted from that person.

“Since those recommendations were made, I am not aware if any of the cinemas would have installed such filters and, therefore, we will have to get another engagement with them to see whether or not they would be installing these,” Dr Anthony said.

He also highlighted that if cinemas are to be reopened, there would be restrictions on the consumption of snacks and drinks, since this would require persons to take off their masks to consume, thereby providing some leeway for the transmission of infection.

Though cinemas have not yet been given the ‘greenlight’ to reopen, President of the Tourism and Hospitality Association of Guyana (THAG), Mitra Ramkumar, highlighted that these businesses have felt the brunt of the restrictions due to the pandemic. And this was confirmed by General Manager of MovieTowne Guyana, Rochelle Parsram, who lamented that the mall’s cinemas – arguably its biggest attraction – have been closed since March last year.

EASE UP THE RESTRICTIONS

Other cinemas have been lobbying for an ‘ease up’ on the restrictions to their operations as they have been forced to temporarily lay off their workers, and they would have not been able to generate any revenues since last year. Meanwhile, Netflix or Putlocker has been the go-to for numerous individuals while their favoured pastime has been restricted.

Should these cinemas opt to secure and implement these HEPA filters, there could be a limited amount of ‘movie time’ once more. Consideration, however, would have to be placed on cleaning these filters regularly and on ensuring that other COVID-19 measures, such as adequate sanitisation services, are in place. Updated COVID-19 guidelines have permitted places of religious worship to operate at 40 percent capacity. Meanwhile, indoor dining at bars and restaurants are also permitted at that 40 per cent capacity too.

In addition to ensuring that gatherings at these places of worship do not exceed 40 per cent, a well-placed source highlighted that these religious spaces would be tasked with ensuring that the place of worship is cleaned and sanitised immediately before and after all gatherings or services. Dining will only be permitted between the hours of 04:00 hrs and 21:30 hrs. Tables must be spaced six feet apart and no more than four persons are to be seated at one table, and each person must be three feet apart.

Sanitisation or handwashing stations should also be provided for persons to use at these spaces; persons should maintain a physical distance of six feet, once they are not from the same household; all persons must wear a face mask to cover the nose, mouth and chin; and, handshakes, hugs or other forms of physical contact should be avoided. The indoor dining at bars and restaurants is being monitored by the Guyana Tourism Authority (GTA); the national curfew remains at 22:30 hrs to 04:00 hrs daily.

— 325 jobs to be created, investors’ confidence in Guyana ‘sky high’

PRESIDENT Dr Irfaan Ali, on Wednesday, turned the sod for the construction of a spanking $1 billion state-of-the-art mall at Leonora, West Coast Demerara.
Speaking before the turning of the sod for the US$5 million shopping centre, the President said the investment is among the wave of development sweeping through the country that will see the creation of a number of economic hubs.
”It is investments like these that are integrated in those hubs, that will act in a catalytic manner in bringing on investments in other sectors and this adds to the value chain in the creation of jobs and the expansion of the economy,” he said.
The new mall is being built by businessman and developer, Hemraj Albert. It is a private sector investment and the President reiterated his government’s support for the private sector in advancing growth and development of the country.
“To the Albert family, I want to assure you that the government is not only aware of the environment you are investing in, but we are supportive of the investment by the private sector. We are supportive of the private sector becoming the leading implementer of growth and development whilst the government provides that facilitation role. And this is the role of government, to create the facilitating role so that wealth can be created, jobs can be generated and the private sector play a key and critical role in this,” the President said.

The mall, to come on stream, he said, will complement the massive development projects slated for the region.
”Region Three has a growing population. Not only do we have a growing population, but we will have massive expansion of housing in this region. As a result of that, facilities like these become critical for the service of the region and the service of communities,” he said.
And collectively, he noted, all Guyanese must look pass ”selfish” and narrow political interest and focus on building a better Guyana.
”We have a responsibility as Guyanese to promote the development of Guyana. I am not asking anyone to promote the development of a government or political party. We have responsibilities as patriots, as Guyanese, to positively position our country for every opportunity. We have the chance to do so. We have Guyanese sacrificing and making life- changing investments to create jobs, to create better communities, but yet, some in the society would seek to even be critical of that,” he told the gathering that included the family of Albert and other special invitees.

NEWS DEVELOPMENTS
The President also used the opportunity to announce several new developments in the region, including the expansion of banking facilities, the expansion of the housing sector and investments in agro-processing and in the hospitality sector.
”So, we are talking about diversification in oil and gas, industrial development manufacturing, base and logistics facilities. And then we also have interests in investment in the hospitality sector here in Region Three and all of this is private interests. In addition to this, one of our largest, local housing developers will soon commence work on the development of a massive medium to upper scale housing community—again private investment.”
Babita Sukhraj, Albert’s daughter, who also spoke at the sod-turning, related that following consultation with family and stakeholders, the name “West Central Mall” was chosen. The mall will include a gym, shopping stalls, business centres, movie theatre, conference facility, fine dining restaurant, supermarket, bars, arcade, food court and adequate parking facility.

It is expected to create some 325 direct and indirect jobs when fully operational.
“The management of West Central Mall will take pride in their social responsibility to the community, stakeholders and the residents of Region Three. All members of society will benefit from the giveaways, holiday hampers and celebrations. West Central Mall will be the apple of Region Three with the support and involvement of all stakeholders,” Sukhraj said.
President of the Region Three Chamber of Commerce, Halim Khan, said the US multimillion-dollar investment will stimulate growth in the region. Businessman and investor, Hemraj Albert, who has been in business since 1984, said he had a vision for the construction of the mall for a long time in his head and he is happy to see the commencement of its materialisation.
“The hard work and dedication to my business has led me in achieving this vision, the West Central Mall. I am looking forward for the support from the region and government agencies and, most importantly, the residents of Region Three. I am sure the mall will bring comfort and joy to the consumers as we are going to ensure the highest quality of service,” the businessman said.

https://www.moneysense.ca/save...-savings-to-draw-on/

Financial planning advice is often catered to wealthier Canadians. What can retirement look like for those without healthy RRSPs or other savings?

Despite their best intentions some Canadians, facing a variety of financial challenges throughout their working lives, may not be able to save much towards retirement. Yet it’s difficult to know how to manage in those circumstances, as so much of the financial planning advice that’s shared widely is catered to wealthier people. 

Retiring with little to no savings can be difficult, but it is not impossible.

Canada Pension Plan (CPP)

For a retiree who has worked most of their life, the Canada Pension Plan (CPP) will replace a portion of their historical earnings. The CPP retirement pension is meant to replace 25% of what you earned, on average, over your career, up to a certain limit. A CPP enhancement began in 2019 that will gradually increase that replacement rate to 33% over time.

In 2020, the maximum CPP retirement pension payment at age 65 is $1,176 per month—that’s $14,112 per year. However, not all retirees have made enough CPP contributions during their careers to receive the maximum. A CPP Statement of Contributions can be obtained from Service Canada to help estimate a future CPP pension.

However, the average CPP retirement pension recipient currently receives $697 per month, or $8,359 per year. That’s only about 59% of the maximum. 

CPP payments can start as early as age 60 or as late as age 70, and the later you start your pension, the higher the benefit you will receive. There can be a lot of factors to consider related to timing your CPP pension, and payments are adjusted annually to account for increases in inflation and the cost of living.  

Old Age Security (OAS) and the Guaranteed Income Supplement (GIS)

Beyond CPP, retirees can also expect to receive an Old Age Security (OAS) pension. OAS is not based on work or contribution history, as it is a non-contributory pension. It is based on residency. A lifetime or long-time Canadian resident may receive up to $614 per month at age 65 as of the third quarter of 2020, which is $7,362 annualized. OAS is adjusted quarterly based on inflation. 

There’s a window in which recipients can apply to receive lower or higher OAC payments for starting earlier or later. OAS can begin as early as age 65 or as late as age 70. 

A low-income retiree with little to no retirement savings may be well advised to start OAS at 65, especially if they are no longer working. The ideal timing of a CPP retirement pension is a little more variable, but the main reason to consider applying for OAS at 65 is a related benefit called the Guaranteed Income Supplement (GIS). 

BTW I did use the calculator and it did give me a fairly accurate calculation.

https://www.thestar.com/busine...how-to-find-out.html

One of the most frustrating practical challenges in planning for retirement when it’s still many years in the future is trying to get an accurate estimate of your Canada Pension Plan (CPP) benefits.

If you are ready to collect, Services Canada will accurately calculate your CPP benefits. It can also provide a reasonably accurate advance estimate of your basic benefits if you’re within a year or two of starting them (online at My Service Canada Account). But farther out than that presents a real challenge.

Until now.

For the first time, there is a free online calculator (at CPPcalculator.com) that can help you calculate in advance what precise CPP benefits to expect when you retire.

The calculator was created by Doug Runchey, a well-regarded CPP calculations expert, and David Field, a certified financial planner — with a knack for programming — at Mississauga-based Papyrus Planning.

The launch of a new calculator isn’t normally a big deal in this online age, but the mind-boggling complexity of CPP calculation makes this one surprisingly notable. There are other spreadsheets and online tools that give ballpark CPP projections, but this is the first that I know of that can credibly claim precise accuracy for basic calculations. (That said, it doesn’t yet cover certain special situations such as raising young children, having a severe disability or combining and splitting CPP benefits.)

The unequalled credibility of this calculator owes much to the testing and endorsement of Runchey, a 66-year-old retired federal civil servant. He mastered the intricacies of CPP computations during a 32-year career with predecessors of Service Canada, the federal government’s point of public contact for many of its services. He was once manager of outreach for CPP and Old Age Security for B.C. and the Yukon.

Since 2013, Runchey has made a modest second career producing CPP estimates by hand for a small fee. He works from home in the Comox Valley on Vancouver Island. As far as I am aware, Runchey — and now the Runchey-Field calculator — are the only publicly available sources of reliably accurate estimates of future CPP benefits.

If you’re trying to plan for what your CPP benefits might be many years ahead, the Service Canada estimates can be way off. That’s because your future payout depends in part on the amount and pattern of your CPP contributions and earnings in the interim. The Service Canada estimates assume simplistically that you continue making the same average level of contributions as you have in the past.

These misleading government estimates can distort important decisions about when to start CPP. It often comes into play for people who retire early, and then must decide whether to then start CPP payouts at age 60 or defer the start of their benefits until age 65 or later. In that case, the government estimates typically assume you continue to contribute to CPP at the same relatively high average level that you did through your working years, whereas in reality, you’ve stopped working and contributing.

How those zero-contribution years factor into the complex calculations varies. In some cases it has no impact. But in other situations it results in the Service Canada estimates being too high by up to two per cent a year, estimates Runchey. In that case, if you fully retire and stop contributing at age 60, but delay collecting your pension until age 65, Service Canada could be overestimating your CPP pension payout by up to about 10 per cent.

Of course, your monthly CPP payout is still going to be higher over-all if you start it later (to compensate you for taking fewer payouts over your shorter remaining lifetime). It just might not be as high as Service Canada lead you to expect.

I have tried the Runchey-Field CPP calculator and found it easy to use. You follow the simple instructions at CPPcalculator.com. You will be sent a link to upload your past contribution and pensionable earnings data from your Service Canada account directly into the calculator. Type in your projected pensionable earnings for future years and hit “calculate.” The calculator tells you what your basic CPP pension payout would be (in today’s dollars) if started at each age from 60 to 70.

The calculator’s major limitation is that, for now, it doesn’t include special situations where your basic CPP benefits need to be adjusted. These include where you have: low-income years raising children under the age of seven; low-income years due to severe disability; the combination of a regular CPP pension and a CPP survivor’s pension; or the need to split your CPP benefits due to divorce or separation. Of course, the Service Canada future estimates don’t cover those special cases, either. For now, if you want accurate future projections in those special cases, you probably need to engage Runchey (drpensions.ca) to get a manual calculation. As an example, he will estimate your CPP benefits including the child-rearing adjustment with two optional start dates (e.g. ages 60 and 65) for $50. Getting those calculations for every age from 60 to 70 will cost $125.

Meanwhile, Runchey and Field are hoping to extend their calculator to cover the child-rearing adjustment and possibly other special situations. At some point they will likely charge a small fee to use the calculator, at least for enhanced features.

That prompts the question of why Service Canada doesn’t provide better help with CPP estimates.

“The government has made the CPP calculations so complex, but they don’t provide the proper tools to help you with it,” says Field.

If the government can’t produce accurate future CPP estimates on its own, I think it should hire Runchey and Field as consultants to help develop proper software to do it.

In the meantime, getting accurate CPP projections remains utterly dependent on how Runchey chooses to spend his golden years.

“If Doug decides to fully retire and this goes away as a service, then we’re really sunk,” says Field.

The COVID-19 outbreak has dealt a shock to our economy, shuttering entire industries and leaving many more businesses in limbo, forcing layoffs and loss of income on many people. Fortunately, the Canadian government and several other institutions are offering financial relief for Canadians during the COVID-19 pandemic. If you have lost your job, have decreased income, need to stay home to take care of someone else, need to isolate or are sick yourself, the following emergency measures can help cushion the blow. 

Canada Emergency Response Benefit (CERB)

This is a COVID-19 emergency aid measure set up by the federal government to help get financial relief to Canadians quickly and efficiently. It is a taxable benefit that pays $2,000 per month for up to four months, retroactive to March 15.

Who qualifies for CERB?

• Workers who have lost their jobs or cannot work because of the COVID-19 outbreak
• Workers who are sick, quarantined, or caring for someone else who is sick
• Working parents who can’t work because schools and daycares are closed
• Workers who have still have jobs but, due to required workplace shutdowns and layoffs, are not working right now
• Independent contractors and self-employed workers who don’t usually qualify for Employment Insurance (EI)

How is CERB different from EI?

The CERB is specifically designed to fill in the gaps that surround the current EI system. It will be easier to apply for, benefits will arrive sooner and more people will qualify. If you are already receiving EI or sickness benefits, then do not apply for the CERB.

If you have already applied for EI and your application is still being processed, you do not have to reapply. If you are still unemployed after the four-month period, people who qualify for EI can still access the standard EI benefits. 

How to apply for CERB

Online applications will be available in early April and benefits will be paid out within 10 days of applying. Check here for more details and updates as they become available. 

Canada Emergency Wage Subsidy

This is a brand new federal subsidy that is designed to help small businesses retain employees on their payroll (or to rehire them) during this outbreak. The federal government will pay qualifying businesses 75% of the first $58,700 of an employee’s payroll salaries for up to three months, retroactive to March 15, 2020. All businesses and non-profits whose revenues have decreased by at least 30% because of COVID-19 should qualify. More details on eligibility and how to apply will be shared here in the days following the March 30 announcement.

Indigenous Community Support Fund

The federal government has also started a new Indigenous Community Support Fund that will provide assistance for the immediate needs of the First Nations, Inuit and Metis Nation communities. The funds will be administered by community leaders where they are most needed.

Employment Insurance (EI)

EI is a federal program available for Canadian workers who have been laid off, and have been paying into EI benefits, and have worked between 420 and 700 hours in the past year (depending on where you live). It pays 55% of your average weekly earnings, to a maximum of $573. Benefits will continue to be paid for a period of between 14 and 45 weeks, depending on how many insurable hours you have worked.

How to apply

You can apply online within four weeks of losing your job with the appropriate documents (which are listed online). There is typically a two-week waiting period before receiving your first payment. 

Note that, right now, it is better to apply for the federal government’s new CERB support. The applications should be processed faster, with fewer obstacles, and you will still be able to receive EI benefits later, if you should need them.

Provincial employment relief

Some provinces are offering a one-time payment of around $1,000 for people who have lost their jobs due to the COVID-19 outbreak.

British Columbia and New Brunswick will make a payment to anyone who has lost income, even if they qualify for federal support. 

Alberta and Saskatchewan offer payments for anyone who is unable to receive federal aid.

Quebec has a province-run temporary aid program for those who are affected by this outbreak and don’t otherwise qualify for federal or employer-provided unemployment assistance.

In addition to these employment measures, most provinces, territories, Indigenous communities and municipalities are increasing the availability and the amount of aid that is offered by programs that were already in place before COVID-19. Visit the websites of your municipal government and local organizations, to see if there might be other extras you can count on during this time. Here is a link to the economic support provided by the city of Toronto, for example, including information on property tax payment grace periods; this link offers information provided by the Northwest Territories, including a full list of subsidies and programs that are available during the COVID-19 crisis.

Extensions on income tax filing and payments

The federal government has extended the deadline for filing personal income tax to June 1, 2020. As well, the payments of any outstanding tax balance can be deferred until August 31, 2020, without incurring any interest charges or penalties. More details can be found here. Quebec is the only province that collects personal income taxes separately, and it has also extended the tax deadlines for this year.

Increased federal benefits

The federal government is automatically raising the amount of Canada child benefit (CBC) that is paid to every family by $300 per child per month. The payment increases will begin in May. The government will also make a one-time payment for families with modest incomes through the GST/HST credit. Individuals can expect close to $400, and couples can expect around $600 in mid-May.

Student loan extensions

As of March 30, the repayment of Canada Student Loans and Canada Apprentice Loans has been automatically suspended for six months, until September 30, 2020, and no interest will accrue. Quebec, Alberta, British Columbia, Saskatchewan, Nova Scotia, Prince Edward Island and Ontario are also providing similar payment freezes on their student loan programs.

Registered Retirement Income Funds (RRIFs)

The minimum withdrawal for RRIFs has been reduced by 25% for 2020, reducing the total amount of taxable income that retirees will have to claim and, thus, reducing how much tax they will owe.

Utility bill deferrals

Many provinces and municipalities are mandating that utility payments can be deferred for 90 days. Please check with your local service providers to see what options are available to you. BC Hydro is also offering grants of up to $600 for people who have lost income due to the COVID-19 outbreak. 

Mortgage and other debt repayment deferrals

Canada’s largest banks and many credit unions are offering mortgage deferrals of up to six months for people who are struggling to make ends meet during this crisis.

They are also offering payment deferrals on other debt, such as lines of credit and credit cards. It’s important to understand that this is not mortgage or debt forgiveness, and that you should assume interest will continue to accrue on the outstanding balance (talk to your lender about the specifics that apply to your mortgage, line of credit or loan). Since it will take you longer to pay off your mortgage and interest will continue to accumulate, it is possible that deferring payments now might end up costing you more in the long run—so only defer payments if you truly need to. You may also want to consider other measures, such as increasing your amortization so your repayments are smaller, and spread out over a longer period. 

So, should I defer my payments?

Maybe. If you are worried about having enough money to survive in the short term, then not having to meet a mortgage payment or two will certainly help. Melissa Leong, author of the finance guide Happy Go Money, says that if you do defer, it’s smart to find out how you can repay any extra money back into your mortgage. “Say you’re getting a mortgage deferral to put the money [you would have used for repayments] in an emergency fund. If you don’t end up spending the money on basic necessities, put it back into your mortgage. Look into what your payment options are, whether that be lump-sum payments or top-ups,” says Leong.

In general, if you are worried about making ends meet during this outbreak, look carefully at ways to decrease your expenses. Leong suggests doing a line-by-line examination of your financial statements and cutting out as much as you can. “Negotiate with your telecommunications company, your insurance company, to reduce your fees. Meal plan to stretch your grocery bill,” she says. If you have to borrow money to get by, be smart about it. Leong says, “Access cheap debt if you can— through a line of credit, for example. Use as little of it as possible, and create a plan to pay it back when things normalize.”

https://www.moneysense.ca/save...19-financial-relief/

our best defence against a recession is to structure your financial life according to some basic principles: save up for a rainy day, don’t put all your eggs in one basket and sharpen your resume. 

The last recession scarred me. I was just about to graduate from university when it hit in 2008: the fallout from the subprime mortgage crisis created a deluge of fear, anxiety and pure panic from all corners.  The S&P 500 plunged by 57%, U.S. GDP declined by 3.8% and employment dropped by 6%.  Similarly, in the EU, GDP sank by 4.4% in 2009 and they lost about 6.7 million jobs from 2008 to 2013. 

Never mind that Canada barely suffered compared to the United States and Europe (Canada’s GDP fell by 3.6% for only three quarters across 2008 and 2009 before recovering,  while employment dipped by just 1.8% in the same time frame); mass uncertainty still swept the air. Homeownership and retirement plans washed away and headlines screamed that there were no more jobs to be had. The only sensible course of action was to hide out and let it all rumble over. I enrolled in graduate school. 

Eventually, the global economy did recover. But it never forgot. 

Since then, the U.S. has been in its greatest-ever period of economic expansion. The stock market hit record highs in both Canada and the U.S., while unemployment figures are at near-historic lows around the world. 

Ironically, those positive data sets just appear to be fuelling widespread disquiet that a recession is just around the corner. After all, what expands must contract and we’re well overdue for a recession, which traditionally hits every eight to 10 years. 

Sometimes it felt like we’re all on a plane clutching the armrests of our seats, just waiting for turbulence.

And then it happened—the fire-starter that we’ve all been waiting for. A new virus emerged in December and spread outward from China, stoking fears of a global pandemic. The stock market reacted spastically in response to potential quarantines, supply chain disruptions and travel restrictions. The DOW tumbled more than 3,500 points the last week of February, only to quickly recover by Monday of the following week, only to again plunge 1,1000 points on March 5. Both the Federal Reserve and Bank of Canada slashed interest rates by half a percentage point. 

Now the question on everyone’s mind is: is a recession just around the corner?

What is a recession?

Technically, a recession is two quarters of negative GDP growth.  And since it has to last for six months to even qualify, you may not even notice you’re in the midst of a recession until it’s almost over. Most recessions aren’t as serious as the last one we had; they usually last for just under a year.

But part of the reason we’re all so on edge now is because of what’s often thought to be a harbinger of recession: the yield curve inverted last year, for the first time since 2007.

What is an inverted yield curve?

An inverted yield curve simply means that interest rates on long-term bonds become lower than the interest rates on short-term bonds.

Typically, the opposite is true: you get a higher interest rate on long-term bonds because you’re taking on a greater risk; interest rates could rise over time while you’re locked into a lower rate. Conversely, there’s less risk in lending out your money at a fixed rate for a shorter term of a year or two; rates usually change incrementally and don’t swing erratically. 

So, it’s really strange when interest rates for short-term bonds are higher than rates for long-term bonds—it’s like saying the near future will be riskier than the long-term. And an impending recession is one of the only reasons why that would be the case.

Indeed, the media clamour would have you believe an inversion of the yield curve is a portent equal to three bloody crows standing on a spire. But while the phenomenon has been somewhat predictive of a recession in the United States, it’s been less prophetical in Canada, says David Macdonald, an economist with the Canadian Centre for Policy Alternatives.

In other words: no one can see the future in a crystal ball. The yield curve doesn’t foretell anything. When a recession will hit, why it will hit, and how deeply it will affect you are all questions that no one—not economists, not analysts and certainly not your brother-in-law—can predict with the remotest bit of accuracy. (If they could, we wouldn’t have been so caught off guard in 2008.)

What will a recession look like in Canada?

We’ve had nine recessions since the last World War, says Craig Alexander, chief economist at Deloitte. Three were light, three were moderate and three were severe. 

The cause of a downturn is what determines its magnitude. A single over-leveraged market—think early-aughts tech sector, for example—will lead to a milder recession than would a massive imbalance in the economy, as was the case in 2008 when subprime mortgage loans were packaged and sold around the world.

So, it’s impossible to say what the next recession will look like or how it will affect you. Each downturn is caused by a different issue in the economy, and your proximity to that issue influences the ramifications.

One thing is certain—some sectors will be hit far harder than others. Since Canada’s economy is primarily export-driven, any downturns that our trade partners experience will likely reverberate throughout our own country, especially in natural resources, commodities and manufacturing.

If the next recession is due to a shock in energy prices, the Prairies will probably suffer. If it’s due to a decline in housing values, Vancouver and Toronto will likely take a hit, as will related businesses such as construction and mortgage companies.

Across the board, we’re likely to see rising unemployment, especially among young and part-time workers. While mass firings are unlikely, says Macdonald,  employers may put a freeze on new hires and reduce staffing through natural attrition. We may also see a dip in the stock market. 

What will cause the next recession?

If the next recession is due to the COVID-19 virus, it would likely result from the need to shut down big cities to control its spread, as is already happening in China, Italy and South Korea, Macdonald says. If people stopped going to work, or going shopping, then we’re likely to see slow or negative economic growth.

Alexander and Macdonald, however,  both identified the huge run-up of corporate, government and household debt as the biggest risk factors for the next recession. 

U.S. corporate debt now equals half the nation’s GDP, or almost $10 trillion. Global government debt has almost doubled since the last recession to around US$66 trillion, or almost 80 percent of global GDP. Here in Canada, household debt is mostly in the form of mortgages and stands at $2.2 trillion, which actually exceeds our country’s GDP.  Because the Bank of Canada recently slashed interest rates by half a percentage point, household debt is only likely to increase in 2020, as mortgages become cheaper.

But if, how and when that debt will spark an economic decline? Nobody knows.

Don’t be afraid of a recession

Fear of a recession can easily affect you more than an actual recession. So, whatever you do, don’t panic. 

In December 2018, for example, the North American stock market was getting hammered, with Nasdaq, S&P 500 and the DOW sinking to 15-month lows. But in fact, the stock market returned around 20% just a month or two later.  

“It was a very volatile risky year and the economic conditions weakened,” Alexander says. “If you sold in 2018 and didn’t invest in 2019 because you were scared a recession was going to happen, then you missed one of the best years in the stock market.”

How can you prepare for a recession?

The best way to prepare for a recession is to structure your financial life according to some basic, defensive principles (all conveniently summed up in popular sayings): save up for a rainy day, don’t put all your eggs in one basket and sharpen your resume. 

“People need to be mindful that recessions do occur,” says Alexander. “The question is—if a recession hits, can you get through the 16 to 18 months that it will last? A recession is a valley and what you really need to do is get to the other side of the valley.”

Here are a few strategies to insulate yourself from the effects of the next recession.

Build an emergency fund

Aim to save three to six months of living expenses. While many Canadians are currently using their line of credit in lieu of a cash fund, be aware this may leave you in a precarious situation since credit may not be so easily available during a recession.

Make sure you have a diversified portfolio

That means across asset classes (i.e., stocks, bonds, real estate, commodities) and across securities and sectors (banks, energy, consumer goods, technology, etc.).  Blue-chip, large-cap stocks in mature industries tend to weather economic storms better than smaller companies in newer industries—think healthcare and utilities over cannabis and blockchain.

https://www.moneysense.ca/save...are-for-a-recession/

I personally have been using UFile for many years and have had no problems.

https://maplemoney.com/ufile-tax-software-review/

Now that it’s tax time, you are probably thinking about how you will prepare your taxes. While some Canadians with especially complex situations are better off with a professional accountant, most of us do just fine with the help of tax software.

As much as I have recommended TurboTax for preparing taxes in the past, I think it’s important to know about other options that might serve you better. There is another well known program that has been gaining momentum. UFile is a serious contender in the Canadian tax preparation market, and it’s one that I recommend as the #1 tax prep software.

I like that UFile automatically gets you the tax credits you should have coming to you, without the need to fill out a lot of extra forms or answer a lot of questions. UFile is updated regularly so that it includes the most up to date information from the CRA, so you don’t have to worry about missing out on what you’re entitled to.

If you are trying to find a viable alternative to TurboTax, here is what you need to know:

What to Expect from UFile

The interview process in UFile works well, although it is not quite as comfortable to use as the TurboTax interviewer. UFile also includes the MaxBack Refund Analyzer, which looks at the whole family to best suggest deductions, credits, and pension splitting. This is a great feature that can help you figure out how to file your taxes in tandem with your partner so that you get the best possible tax refund. The process works well, and you can save information for later, if you need to.

UFile is secure and safe, and has been around for more than 15 years. You can also use information from last year’s return in this year’s return to speed up the process and make it a little bit easier. UFile also supports the import of desktop versions of H&R Block and TurboTax, so if you are switching tax software, it’s possible to enter your information quickly, without the need to add it manually. UFile also offers customer support and options for contacting professionals who can help you answer questions if you get stuck.

It’s also worth noting that UFile is certified for NETFILE, so you can submit your tax return electronically, increasing the speed at which you receive your refund. This is something that is increasingly important as more Canadians go paperless, and as our society looks for more in terms of quick results.

What Does UFile Cost?

UFile’s biggest strength is in the pricing. While there are free tax programs like StudioTax and SimpleTax, you may be willing to pay for a more polished and user friendly product. UFile is valued only $19.99 for four tax returns, while TurboTax Standard charges $34.99 (although you do get eight returns). UFile’s cost effectiveness becomes even more apparent when compared to higher versions of TurboTax, many of which add features that are in the one version of UFile.

The fair pricing for UFile is based on the online version, which starts at $17.95 for individuals. You can add a spouse for only $10, which makes it relatively inexpensive for you to file your return online. TurboTax Standard online starts at $19.99 per return. You can see that, already, you have the potential to save more money with UFile.

One of the nice things about UFile is the fact that it is pretty straightforward, with fewer versions and pricing options. There is a UFileT2, designed for corporations that need to file a T2, for $129.95. If you don’t need to file a T2, the online or desktop versions of UFile can help you report self-employed and investment income on your T1. You can also access UFile PRO, which is designed as professional tax software, starting at $129.99. This is ideal if you need to file more returns, and save money.

There is also the UFile Free offer, which is free if you have a simple return or are a new filer, a student, or have an income of less than $20,000. If you add dependents that fit these requirements, you can add them for free as well. This is a nice touch, since some tax preparation software programs will nickel and dime you for every little form or dependent. If you have a simple tax return, consider using this program from UFile to save money on your filing costs. You get the benefit of help preparing your tax return without having to pay anything. This is useful for new filers as well, since they won’t have to pay. It’s a good way to test out the program and decide if you like it.

UFile is my #1 recommended Canadian tax prep software. If you have especially complicated taxes, you might want to consider hiring a professional instead of using tax software at all. Many consumers find that UFile is a great choice because of its easy product offerings and low prices. Even though I think TurboTax is a solid program, UFile is my favorite Canadian tax prep software, and I highly recommend it.

https://www.greaterfool.ca/

Made your RRSP contribution yet?

Wait, keep reading. This isn’t another tedious piece on tax-free compounding, using a retirement plan to split family income, making a contribution without having any money, how to remove funds without being taxed nor how the entire system is dramatically skewed to benefit high income-earners, medical professionals, lawyers and the self-employed. You already know that stuff.

Instead, let’s revisit a fav topic: how pooched everyone else is.

How much do you need to retire? That depends on when you hang ’em up and how much you spend, of course. Plus if you have kids or wish to leave an estate for others to squander on stuff you’d never buy. There is no static answer. Some people say 30x your annual working income is the right number. Investment giant Schwab suggests $1.7 million is a reasonable goal. Fidelity says you need enough saved/invested to replace 80% of your work salary. Anyway, the Internet teems with financial calculators you can use to come up with your own target.

Then compare your readiness with this dismal set of facts:

• As mentioned before, people retiring without a defined corporate pension have an average of $3,000 saved. Yeah, they probably have a house, too. But you can’t eat that.
• About a third (32%) between 45 and 64 have saved… nothing. Seriously.
• Roughly a fifth (19%) have less than fifty grand. But the average amount Canadians have saved/invested for the future is $184,000. That tells us a small slice of folks have saved a boodle. A giant slice of people are heading for a future of KD and CPP.

Now on that point, we all need to understand clearly the public pension system in Canada will not save you. Not with the recent enhancements, either. If you’re a Millennial, the higher benefits (a max of just over $20,000 a year) don’t click in until the average moister is 76.

Today the max someone can collect in CPP is $1,175 a month, but very few qualify. So the average received is $672, or eight grand a year. Grocery money. Old Age Security goes to everyone at age 65 (for now), and that adds $613. So the total in government pogey the average person receives is $15,420. If that were your only income, then the GIS (Guaranteed Income Supplement) kicks in at a max of $876 per month, bringing  the grand total of public assistance to $25,932 – or about two thousand a month.

Married people get less GIS, but it’s still possible for an average household of two to receive a total of about $45,000 annually. Maybe all the people with little or nothing think this is enough to get by on, which is why they don’t save or invest. Given that the median household income in Canada is north of $90,000, this translates into a 50% drop in retirement. So ask yourself, could you suddenly live on half the money you’re getting from employment?

Let’s compare with the deplorables in Trumpland (which some people think may soon be the home of Bernie’s Sandersnistas).

The average monthly Social Security payment in the US is $1,471, or about $1,900 in moose money. Therefore it’s three times more than CPP pays (on average). By the way, the max SS payment of $2,210 at age 62 is about twice as generous as CPP – and it grows from there: $2,900 a month if you wait until 66 and $3,770 monthly ($45,300 US) at 70. So a couple of wrinklie old pensioners who worked all their lives could actually see up to ninety grand a year.

But what about household savings?

A new survey by TD Ameritrade says 50% of Americans have more than $100,000 – way better than us. Most of this is in the hands of people over the age of 40 (no surprise there), yet Millennials in the US are the ones most often stuffing their Roth IRAs (the American equivalent of our TFSA).

Hmm. The average American has saved more money for retirement, and the US system is far more generous with public pensions. So how did we get so smarmy and snooty, believing the States is a land of dumpster-divers, people who spend everything on Glocks and trailer park rednecks where financial illiteracy reigns supreme and society is divided between billionaires and losers?

Beats me. The CBC maybe. Or our political elite. Maybe it’s the whole real estate-government complex.

After all, the US rate of home ownership is lower than in Canada by almost 10%. American households carry far less debt, and actually reduced borrowing a ton after the housing market blew up. Plus the median cost of an American house is just $228,000. The average paid by first-time buyers is $219,000. There are porta-potties in Vancouver worth more.

Thus, when it comes to the financial state of Canadians, this pathetic blog’s thesis stands. It’s suicide by house.

The regulations outline specific conditions that entitle travellers to compensation, and even a full refund of their airfare

https://www.moneysense.ca/spen...nger-bill-of-rights/

Passenger rights in Canada have been a sore spot for travellers for many years. Historically, if you were delayed for reasons within the airline’s control, you weren’t entitled to any compensation. As you can imagine, this was frustrating for many passengers who had their travel plans interrupted.

That all changed in May of 2019, when the Canadian Transportation Agency’s Air Passenger Protection Regulations came into play. These new regulations are meant to provide Canadians with compensation when there are airline delays, as well as some basic rights to make their journeys slightly more comfortable. Airlines are required to follow these new rules—but, for your own protection, you should also know what you’re entitled to.

Compensation if you are denied boarding

Under the new passenger bill of rights, if you have a valid ticket, yet are denied boarding due to reasons within the airline’s control (for example, overbooking) but not required for safety, then you’ll be entitled to compensation. How much you’ll get depends on the length of the delay when you reach your final destination:

The compensation must be paid as soon as you’re informed, or within 48 hours if it’s not possible to issue right away. For those not in a rush, you could benefit from these new rules by volunteering to give up your seat in exchange for vouchers you can apply to future travel, and other benefits. The airlines will also have to rebook you onto another flight at no extra charge.

Delays on the tarmac

If you’ve ever been stuck on the tarmac, then you know the frustration is real. Under the new rules, you must be allowed access to the washrooms, proper ventilation, food and drink, and the ability to talk to people outside of the plane. In other words, they can’t force you to stay in your seat and have your phones in airplane mode during tarmac delays. If the delay lasts three hours at a Canadian airport, then the airline must return to the gate so passengers can disembark. There is an additional 45-minute grace period for airlines if the plane will likely take off during that time period.

Lost or damaged luggage

If your luggage is lost or damaged on domestic flights within Canada, you are now be entitled to up to $2,100 in compensation. The important thing to know is that if your luggage is damaged, you must file a claim with the airline within seven days of receiving your luggage. If your luggage is lost, then you have 21 days from the time it was supposed to have been delivered to make a claim. If your luggage is lost or damaged, airlines will also need to reimburse any baggage fees you paid.

Compensation for flight disruptions

Passengers are now entitled to compensation up to $1,000 for flight delays or cancellations based on the length of the delay and the airline they’re flying:

Although you get up to one year to make a claim, airlines have 30 days to respond by paying you what you’re owed or they can provide you with a reason why they don’t think you’re owed anything. Since this compensation only applies when flight delays are out of the airline’s control and not safety-related, they may have a lot of reasons to not pay.

Another thing to consider about the compensation is that it only applies after you’ve made a claim. If you’re in an airport and delayed, you may need to pay out-of-pocket for food or even get a hotel for the night. Having a travel insurance policy in place that has defined payouts in the event of delays or cancellations would likely give you some added peace of mind as you’d be able to make arrangements knowing that you’ll be reimbursed. Don’t forget, many credit cards come with travel insurance included.

Rebooking and refunds

Whenever there is a flight delay or cancellation, the airline must ensure that passengers are able to complete their journey. As soon as a delay reaches 3 hours, airlines need to rebook the passenger on the next flight. With large airlines, if that next available flight doesn’t depart for 9 or more hours after the passenger’s original departure time, the airline would have to book you on a competing airline.

If the rebooking makes your travel pointless (for instance, you would miss your meeting) then you’d be entitled to a full refund on your ticket, plus $400 when flying on a larger airline or $125 on small airlines because you were inconvenienced.

Now, let’s say your flight disruption is outside of the airline’s control. In such cases, airlines must rebook you with a competing airline if their own next available flight isn’t scheduled to depart within 48 hours. This gives passengers some protection, but not many people would be happy about waiting up to two days to get on with their travel plans. A travel insurance policy that includes flight delay insurance may allow you to book on another airline much sooner, and at no cost to you, which is another reason why you should always have travel insurance.

The seating of children

As strange as it sounds, before the Air Passenger Protection Regulations were introduced, airlines weren’t required to seat children near their parent, guardian or tutor, but that’s no longer the case. Parents are now ensured that children under the age of 14 will be seated near them—but the proximity may not be acceptable to some:

There’s no extra cost for these seating arrangements but, as you can see, if your child is between the ages of five and 13, it’s possible they may not be seated as close to you as you’d like. If you want to ensure that you’re getting the seats you want, then you’re going to have to pay for advance seat selection.

Final thoughts

The airlines will have to pay for this somehow, and it’s likely to be through higher airfare costs for all travellers. Still, new passenger rights are a step in the right direction; however, the wording gives airlines a lot of wiggle room so they don’t have to pay. Even if you’re clearly entitled to compensation, it may take time for you to collect and your travel plans may be severely affected. To give yourself some extra protection, you’ll want to ensure you have travel insurance that includes trip cancellation, trip interruption and flight delays.

Nearly half of Canadians expect to receive an inheritance. But while it’s important to consider those potential funds in your own retirement planning, counting on them is downright dangerous. Here’s what you need to know. 

My mother passed away three days after her 66^th birthday, leaving me with an inheritance I never expected.

Until two years ago, I assumed she would live into her 80s. But she had a terminal illness that progressed significantly in the final months of her life. Her care costs were minimal. We had great support from family and from government-funded resources.

But I have also seen things go the other way. Families burn through savings to cover full-time care for an aging parent at costs that can exceed $10,000 per month. In those cases, at the end of an aging relative’s life, there may be no inheritance left to pass along to loved ones.

At our financial planning practice, one thing we ask clients is if they are expecting an inheritance; it’s a question on our intake form. We ask because it is relevant, both for retirement planning and discussion purposes. But as the two scenarios I’ve just described show, the most we can ask for is a best-guess answer. On the benefactor’s side, nobody knows how long they will live, nor what potential long-term care costs may be incurred during one’s later years—so a beneficiary may or may not receive an intended inheritance. That makes planning to receive an inheritance challenging.

On the flipside, counting on an inheritance to cover your living expenses in retirement can be both difficult and risky. I have worked with widows and widowers who have married late in life and leave part of their estate to their new spouse and part to their children from another marriage. I have seen wills changed prior to death to include or exclude family, friends or charities.

The point is, the timing and amount of an inheritance may be a wild card. If you are expecting a significant or highly likely inheritance, it may be unrealistic to ignore it completely; but at the same time, counting on an inheritance that may not be as much or arrive as soon as you expect could make for a risky retirement plan.

Anecdotally, I have found that many clients ignore, or significantly understate an expected inheritance in their retirement planning. However, surveys suggest Canadians may be overly optimistic overall. In fact, a BMO survey from 2014 found that 40% of Canadians are counting on an inheritance that will help fund their retirement. The same survey also found that almost the same percentage, about 34%, are counting on lottery winnings to fund their retirement. The lottery expectation makes me question both numbers.

More recently, a 2019 Edward Jones survey found a similar number of Canadians are expecting an inheritance—44%. The good news is 63% of Canadians are expecting to leave an inheritance. But, as always, expectations can be thwarted by long-term care costs, despite best intentions.

CIBC reported in 2016 that the average inheritance received in the previous decade by Canadians aged 50 to 75 was about $180,000. The amount differed significantly by province, with BC, Quebec and Ontario all exceeding the national average, likely in large part due to real estate prices.

Practically speaking, I would be inclined to underestimate inheritance expectations and overestimate the life expectancy of anyone who you might expect to receive an inheritance from in the future. There is about a 50% chance that a 65-year-old man will live to 89, according to FP Canada’s 2019 Projection Assumption Guidelines. A 65-year-old woman has a 50% chance of living to 91.

Being conservative when setting your own retirement savings and debt repayment targets may help ensure receiving an inheritance is what it should be: a windfall, rather than a necessity for funding your retirement.

From a planning perspective, if you are expecting an inheritance, there are proactive steps to take. In a 2017 CIBC poll, only 38% of seniors over age 65 have talked to their children about how to manage their finances if they can no longer do so themselves. Only 22% of boomers aged 55 and over have “legal documents,” like a will or power of attorney, in place.

My mother was a good example of how quickly health can deteriorate at a fairly young age. Her financial affairs were in order, but there were certain discussions even I wished we’d had earlier than we did.

One of my favourite pieces of financial planning advice is to beware of rules of thumb. But one rule that I do like is the “40-70 rule”—meaning, by the time you are 40, or your parents are 70, you should aim to discuss money and health with your parents.

I was 40 when my mother died earlier this year at age 66. I knew all the details of my mother’s finances, and enough about her care and end-of-life wishes to make the right decisions with my family. You may not need to know specific numbers and intimate details of your own parents’ finances if they do not want to share them, but there are a few things you should know.

• Do they have up-to-date wills and powers of attorney/personal directives/mandates?
• Where are their legal documents located?
• Who is named as executor, attorney, agent or decision-maker?
• Do they have a financial, tax or legal advisor whom you should know?
• What are their long-term care and end-of-life wishes?

There are planning techniques to minimize income tax, probate fees and estate costs with an inheritance, but I see these strategies as being secondary to having an initial discussion with a parent about their estate and later life planning. Sometimes, the basics are much more important.

For someone banking on an inheritance as part of their retirement plan, I would urge caution. It is better to be conservative and re-evaluate retirement planning and inheritance expectations on an ongoing basis. An inheritance means you have lost a loved one. But it should not mean the difference between being able to retire or not.

Jason Heath is a fee-only, advice-only Certified Financial Planner (CFP) at Objective Financial Partners Inc. in Toronto. He does not sell any financial products whatsoever.https://www.moneysense.ca/columns/ask-a-planner/how-to-plan-for-expected-inheritance/

https://retirehappy.ca/ten-ide...uccessful-and-happy/

Retirement is really supposed to be the best years of your life. For some this is a reality, but for others reality is not so promising. What makes the difference between a prosperous, happy retirement versus a retirement filled with stress and worry?

The Old Age Security (OAS) pension is one of the three main pillars of Canada’s retirement income system. The two other pillars are the Canada Pension Plan (CPP) and Employment Pension Plans/Individual Retirement Savings.

The universal OAS pension is a taxable monthly payment available to seniors who are aged 65 and older and who meet the eligibility requirements. Unlike the CPP, Old Age Security benefits are not tied to your employment history. You may be eligible to receive the OAS pension even if you have never worked or are still employed.

In addition to the universal OAS pension, there are three other benefits that low-income seniors may also qualify for: The Guaranteed Income Supplement, Allowance and Allowance for the Survivor. I discuss them in a separate article.

Related: How Much Income Will You Need in Retirement

Eligibility for Old Age Security Pension

1. You must be at least 65 years of age.
2. If living in Canada: You must be a Canadian citizen or legal resident and must have lived in Canada for at least 10 years since you turned 18.
3. If living outside Canada: You must have been a Canadian citizen or legal resident before you left Canada and must have resided in Canada for at least 20 years since you turned 18.
4. 1. There are a few other scenarios where you may be eligible for the OAS; for example, if you have lived in a country with which Canada has established a social security agreement.

   2. How to Apply for OAS Pension

   If you wish to start receiving your OAS pension at 65 years of age, you can send in your application the month after you turn 64.

   Service Canada will sometimes enroll seniors automatically and send them a notification letter. If you are not automatically enrolled, complete and mail the Application for the Old Age Security Pension Form.

   How Much OAS Benefit Will You Receive in 2019?

   The amount you will receive on a monthly basis depends on how long you have lived in Canada after turning 18.

   To qualify for a full OAS pension, you must have lived in Canada for at least 40 years after age 18.  You will receive a partial pension benefit if you haven’t resided in Canada for the full 40 years. The partial pension benefit is 1/40th of the full pension amount for each complete year you lived in Canada after age 18. For example, if you had lived in Canada for 20 years as an adult, you may qualify to receive 20/40th or one-half of the full benefit.

5. OAS benefits are adjusted quarterly in January, April, July, and October based on the prevailing Consumer Price Index. For the last quarter of 2019 (i.e. October to December), the maximum monthly OAS benefit is $613.53.

6. OAS Deferral Option

   Since July 1, 2013, individuals can voluntarily defer their OAS pension for up to 5 years after the date they become eligible. This deferral will make them eligible for a higher monthly pension later. For every month the OAS is deferred, the monthly pension amount increases by 0.6% up to a maximum of 36% at age 70.

   OAS Clawback

   Officially known as the OAS recovery tax.

   Your OAS benefit may be reduced by a clawback if your net income for the previous calendar year exceeds $74,789 (2017), $75,910 (2018), and $77,580 for 2019. If your net income exceeds this amount, you must pay back 15% on the excess income up to a maximum of the total OAS benefit received. This deduction is like an additional 15% tax on top of your current tax rate.

   OAS clawback example: For example, for the 2017 year, the income threshold was $74,789. If your net income was $85,000, the excess of $10,211 would trigger a clawback of $1,531.65 (i.e. 15% x $10,211). This would result in a monthly reduction in OAS benefits of $127.64 for the July 2018 to June 2019 period.

   For the October to December 2019 quarter, if your net income exceeds $126,058, your OAS benefit will be reduced to zero.

7. How To Minimize OAS Clawbacks

   A few strategies that may be deployed to limit OAS clawback if applicable include:

   Income Splitting: Splitting eligible pension income including workplace pensions, RRIF, and utilizing spousal RRSPs. This can lower individual spouses’ overall income and limit or eliminate OAS clawback.

   Defer OAS/CPP: Seniors can defer OAS pensions for up to 5 years from when they are eligible. CPP can be deferred as well. However, note that deferring OAS or CPP will increase your benefits later down the road and could then trigger OAS clawbacks at that time. In some cases, taking CPP much earlier may be a better option.

   Prioritize TFSA Contribution: Income generated from investments in a TFSA are not taxable and do not count towards your net income.

   Utilize RRSP Contribution Room: You can contribute to an RRSP until the end of the year in which you turn 71. If you have unused RRSP contribution room from previous years or still have employment income, contributing to an RRSP will lower your net income for OAS calculations. Making spousal RRSP contributions will achieve the same result.

   Optimize other Investments: Interest income from Guaranteed Income Certificates, savings, etc., are taxed fully. Dividends are grossed up (138%) and may push your income over the maximum threshold. Only 50% of capital gains are included in taxable income.

   If you have questions about your Old Age Security pension, you can contact Service Canada as follows:

   • If you reside within Canada or the United States, the toll-free number is 1-800-277-9914.
   • If you reside outside Canada and the United States, the number to call is 1-613-957-1954.