A thorough analysis of today’s financial news—delivered weekly to your inbox or via social media. As part of Knowledge Bureau’s interactive network, the Report covers current issues on the tax and financial services landscape and provides a wide range of professional benefits, including access to peer-to-peer blogs, opinion polls, online lessons, and vital industry information from Canada’s only multi-disciplinary financial educator.
Old Age Security Benefit Rates Unchanged The rates for Old Age Security pension and Guaranteed Income Supplement payments remain unchanged for another quarter. The rates for the fourth quarter of 2007 and the first two quarters of 2008 are: Benefit 4th Quarter 20071st Quarter 20082nd Quarter 2008 Old Age Security $502.31 GIS - Single pensioner $634.02 GIS - Married to Non-Pensioner $634.02 GIS - Married to a Pensioner $418.68 GIS - Married to a Recipient of the Allowance $418.68 Allowance: Regular $921.00 Allowance: Widowed $1,020.91 Prescribed Interest Rates Remain Unchanged, Too. Prescribed interest rates for the second quarter will remain the same as the first quarter of 2008. 2007 Quarter 2008 Quarter Rates Applicable to: 1 2 3 4 1 2 3 4 Overdue Taxes 9% 9% 9% 9% 8% 8% CPP/EI Premiums 9% 9% 9% 9% 8% 8% Tax Overpayments 7% 7% 7% 7% 6% 6% Taxable Benefits, Low or No Interest Loans 5% 5% 5% 5% 4% 4%
Andrew Brash Update Andrew Brash, Knowledge Bureau Faculty member may be on one of the 20 plus teams in possession of their climbing permit from the Nepal Ministry of Tourism. According to MountEverest.net, more than 20 teams have received climbing permits for Everest, with about 10 plus teams still in the process. The permit contains more specifications than normal. One of the new requirement is: ìAll the news regarding the expedition must be conveyed to the Ministry of Tourism & Civil Aviation first of all, and only then it can be sent to others.î This may be one of the reasons why updates from Andrew have been slow to come. This climbing season is expected to have less climbers than usual ñ about 270 plus locals. We are still monitoring the situation and keeping our fingers crossed. We will continue to feature an ongoing update on his climb as part of Breaking Tax and Investment News or you can track his progress by visiting his website http://www.andrewbrash.com/ for live updates from the expedition. Stay tuned for updates!
With a flood of baby boomers approaching retirement, cash flow planning is an important issue, which is not surprising. However, what is interesting, is this appears to be more of a problem for the affluent, than for blue collar workers. A recent Statistics Canada report (Income Security in Retirement Among the Working Population ñ published March 10, 2008) indicates at age 75, most retirees had a family income of 80% of their earnings at 55, which is good news for the affluent; more sobering news for those who are not prepared for life after work. However, adjustment to a lower income after work is often more difficult for those used to earning a lot of money, it appears. The lower the income, the less change was felt in lifestyle during retirement, according to the report. In fact, many of Canada's poorest maintained 100% of their disposable income when CPP, OAS and GIS kicked in at retirement. The affluent, meanwhile rely more on their own RRSP investments, private pension, other savings, accounting for nearly 70% of their income during retirement; there is minimal reliance on public pension or OAS. So what's the problem? In a country where financial literacy is at best, weak, tax efficient retirement income planning is a critical skillset, particularly because the wealthy pay proportionately more tax. For the advisor prepared to meet this opportunity, success is knocking at the door, with this much-demanded skillset. For this reason The Knowledge Bureau has designed the MFA, Retirement Income Specialist designation program. Available not only to tax and financial advisors who wish to expertly advise on retirement income planning, the program also is of significant interest to clients who want to learn more about taking control of their cash flow when income from their day job diminishes or ends. This designation program, available conveniently by self study, is made up of six courses designed to teach the ins and outs of retirement income planning from a tax efficient viewpoint. The six courses are: Tax-Efficient Retirement Income Planning, Financial Literacy: Relationship Between Risk and Return, Portfolio Construction and Real Wealth Management, Advising Family Businesses, Owner-Manager Compensation Planning, and The Use of Trusts in Tax and Estate Planning. ìFor peace of mind, everyone should take the first course in the program,î says Evelyn Jacks, Program Director and co-author of Tax-Efficient Retirement Income Planning. ìA special bonus for our students is the retirement income projectors and tax calculators we have build for you to understand after-tax cash flow and capital encroachment required to fund your lifestyle wants and needs.î Retirement for boomers is really a ìtransitionî to economic inactivity, rather than a specific event as experienced by our parents or grandparents. Put yourself in a position to be the specialist ñ the one knowledgeable and trusted advisor who can deliver the right solutions and in the process gather more assets and referrals than ever before. For more information call 1-866-953-4768 or visit knowledgebureau.com.
How do the new Tax Free Savings Accounts, on deck for investors starting in 2009, affect those who are leaving Canada? What are the right planning opportunities for minimizing departure taxes? These are questions advisors serving clients this tax season may hear. Consider these facts, from Knowledge Bureau Faculty Member John Mill, author of the Knowledge Bureau Certificate Course Cross Border Taxation, for his research on the subject: In Canada, the new Tax Free Savings Account (TFSA) is not caught by the departure tax rules. However, no TSFA contribution room is earned for those years where a person is non-resident. In addition, any withdrawals while non-resident cannot be replaced. The US does not recognize the TFSA, therefore any realized income ought to be non-taxable when removed after emigration. However any capital appreciation will be taxable. Therefore it will make sense to remove capital properties from the TFSA on a tax free basis immediately prior to emigrating and then trigger the deemed disposition on a nominal gain on departure. Residency and Non-residency issues are covered in detail in The Knowledge Bureau's EverGreen Explanatory Notes. . .can you really afford not to have EverGreen at your fingertips this month? For more information and to subscribe: click here.
Andrew Brash Update Andrew Brash, Knowledge Bureau Faculty member is en-route to Mt. Everest, against a backdrop of violence between Tibetan monks and the Chinese government. Andrew is in the right position to act quickly when climbing permits are handed out and start his trek to base camp. So after months of preparation and training, Andrew is ready for what lies ahead ... and to take The Knowledge Bureau flag ... and all of our best wishes for success, with him to the summit! We are monitoring the situation and will continue to keep you informed on Andrew's dangerous return to Mr. Everest, as a regular feature of Breaking Tax and Investment News or you can track his progress by visiting his website andrewbrash.com for live updates from the expedition. Stay tuned! To book Andrew on his return for your next educational event or conference please contact The Knowledge Bureau at 1-866-953-4769.