INCOME SPLITTING AFTER RETIREMENT

Before age 65, only company pension and superannuation annuities qualify for income splitting or annuities arising from the death of your spouse. If you don't have a company pension, it’s kind of hard to split income. After attaining age 65, RRIF income qualifies, so if you haven't converted your RRSP to a RRIF or annuity, that’s the time to do it. Income splitting is only going to work if you and your spouse are in different income brackets. When I'm doing a couple’s tax return and they have qualified pension income, I run a pension splitting optimizer to determine how much to move over. It’s not always obvious what the right amount is, so this routine is very important and sometimes I can save my clients thousands of dollars in tax.