(Mostly) Great News for Retirees/Pensioners
Welcome to the first issue of RetirementAction. I hope you wil return to help evolve and improve this periodic communication on how to take control of our financial future.
Mr. Flaherty, Canada’s Minister of Finance showed up on Halloween with a trick and a treat. Much ink has been spilled on headlines decrying the elimination of the unfair playing field currently enjoyed by income trusts (the trick) and the resulting damage to some retirees’ nest eggs. But income trust crack down was just a matter of time, due to its ultimate outcome of shifting all corporate taxes to individuals. But this is just the short term story/reaction to the momentary damage to some investors’ portfolios with dangerously high concentrations of income trusts. Diversification is a lesson that we should have all learned five years ago when the telecom bubble collapsed.
However the big story should have been the tax savings associated with allowing pension splitting for couples, rather than taxing each spouse/partner separately at their respective tax rates. This is a goose that will lay golden eggs year after year for retiree couples. This message was almost lost in the initial hysteria. Articles are now appearing that are recognizing that this will end up the durable high impact story (the treat).