Walter and Joan
Walter and Joan are in good shape for retirement; almost too good. With a large pension expected, their RRIF payments may trigger unnecessary taxes in retirement.
The Summary Report focuses each document on a specific chart from within the software. This allows the client to focus on specific aspects of their finances, such as cash flow, assets, or taxation.
The Completed Analysis
From the analysis, we can see that Walter and Joan are in great shape for retirement. They should have little trouble funding their goal of $60,000/year, after tax. However, they are forced to draw RRIF Minimum payments; and due to their Pension and Government Benefits; these payments are unnecessary. This will subsequently trigger unnecessary taxation and tax credit clawback.
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Report Summary and Focus
This case was built using The Razor version 2.7.41; current results may vary.
As we can see from the Cash Flow chart, Walter and Joan have no trouble funding their needs through to age 93. However, starting at age 68, they are forced to draw RRIF Minimum amounts even though they do not require it. This will force the clients to unnecessarily increase their taxable income and may subsequently trigger tax credit clawback.
Although the clients’ have an average tax rate of about 10%, their RRIF Minimum payments are triggering tax credit clawback. If strategies are put in place to limit their level of taxable income, these clawback amounts could be avoided. This would reduce their overall tax rate.