tag:blogger.com,1999:blog-5465015914589377788.post6672218251360597723..comments2024-03-20T09:32:16.592-04:00Comments on Michael James on Money: The Sleep-Easy Retirement GuideMichael Jameshttp://www.blogger.com/profile/10362529610470788243noreply@blogger.comBlogger5125tag:blogger.com,1999:blog-5465015914589377788.post-76507188325926079432021-01-16T09:57:17.421-05:002021-01-16T09:57:17.421-05:00Other tax advantages of CPP in general are the tax...Other tax advantages of CPP in general are the tax credits/deductions associated with it. And CPPIB doesn't pay any Canadian taxes; correct me if I'm wrong on that. The reason I'm bringing this up is that if your marginal tax rate is on the higher side, taxable fixed income is basically a money loser. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-32181335975491572902021-01-16T09:45:40.691-05:002021-01-16T09:45:40.691-05:00Anonymous,
Yes, the tax deferral on CPP is as val...Anonymous,<br /><br />Yes, the tax deferral on CPP is as valuable as RRSPs, and this is particularly important to those who have used all their RRSP and TFSA room.Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-15375872795943053782021-01-16T09:32:40.239-05:002021-01-16T09:32:40.239-05:00There are several situation where the government g...There are several situation where the government gives a tax breaks to individuals. Some that get discussed are the TFSA, RRSP, some types of life insurance and the cap gains exemption on a personal residence. One that doesn't get discussed often is that homeowners don't get taxed on implied rent; I believe they do in Switzerland. And the tax deferral of CPP deferral and OAS deferral aren't discussed much also. The higher the tax rate and the higher the inflation rate, the more that tax deferral is worth. To take an extreme example, many Canadians can remember an inflation rate of 12.47% (1981). Another extreme example is a tax rate of 54% (Nova Scotia). Assume an inflation rate of 12% and a tax rate of 50%. With a 4% real return, your aftertax return is a negative 4%. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-77332489154898120152021-01-16T07:54:36.990-05:002021-01-16T07:54:36.990-05:00Anonymous,
Your tax deferral point is certainly r...Anonymous,<br /><br />Your tax deferral point is certainly relevant to those who have non-registered investments. <br /><br />In some ways, CPP is the ultimate in fixed income. You'll get payments whose buying power will never decline, and those payments will never end (as long as you live). That beats anything else I can buy from the fixed-income realm.Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-1201529381986656652021-01-15T23:58:57.380-05:002021-01-15T23:58:57.380-05:00"The 4% real return baked into CPP deferral a..."The 4% real return baked into CPP deferral applies only if you have an average lifespan."<br /><br />What doesn't get mentioned often is that CPP deferral is also tax deferred. Between the ages of 60-70, you can try to beat the return of CPP deferral. With taxable fixed income, that will be difficult for many.<br /><br />Also, CPP deferral will make the portfolio of many more diversified. This assumes that you consider CPP as a fixed income asset, and some will disagree with that contention. Anonymousnoreply@blogger.com