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The clock stops ticking once you retire. Her 28 probably is indexed so it will increase a little but only a few percent a year. There is probably a bridge until OAS/CPP kick in but that's not going to be a fortune and she will get it in either case until 65 (I am assuming OTPP has a bridge).
But you are presumably spending that money to live not investing it. Also I am assuming an indexed pension so double the starting point equals double the adjustment every year so the gap widens. Now, 25K pension could be enough if she has a warchest kicking out money. The pension pays the house and the warchest pays for fun.
There is another option too. Work full time for less years but pretend you are on pension income. That increases your pension and builds the warchest. In rough numbers, it probably looks something like 35K to spend and 35K saved for each of the next four years. Now you have 140k in the warchest (plus whatever growth you got). Say you bought enbridge (as an example, not necessarily a recommendation), 140k kicks out 9K in dividends. You are used to living on 35k (after tax) income and retire with something like 40k+9K before tax income (more than 35K after tax).@mimico_polak no it does not...we get an annual COLA, but that's it...
@Scuba Steve I did a rough (very rough) calculation comparing the two to an age of 83 (or something like that which I think is the average life span for a female)...anyways, collecting now is something like $400,000 less overall versus waiting 6 more years...I'm not a great investor unfortunately
another option is to go half time for the next few years and if I remember correctly, my pension goes down to $43,000/yr
It's also really good if you understand the difference between wants and needs.
I'll add, you're also not saving for retirement any more.
www.theglobeandmail.com
canadianpreferredshares.ca
It's all in my name or my holding company. Not sure how to change that.Some more information:
You do the math: Almost $50,000 in earned dividends, $0 in tax
How the one-two punch of dividend tax credit and basic personal credit add to the allure of this style of investing
How to Earn up to $50K Tax Free in Canada - CanadianPreferredShares
How to Earn up to $50K Tax Free in Canada. Depending on the province, it's possible for an individual with no other sources of income to earn around $50,000 in dividends without paying any tax at all. This amount varies by province due to the make up of the Dividend Tax Credits.
The numbers are a few years old, so the tax credits are probably higher this year for bigger savings. Make sure your dividend stocks are split equally between you and your spouse and the paper trail is all in order. Best to get all this done before you pull the trigger on retirement. Shuffling stocks around after the fact is a sure-fire signal for audit.
Are your wife and kids part of the holding Corp? May be able to transfer her some that way (not the kids yet, they need to be older).
Add your wife to your holding company. Thats what I did. If over 65, then income split.
Nope no red and even if I gift her money I am still liable for the tax if she buys shares or gets dividends I believe.
Depends. Bikes or cars would have to some possibly of appreciation. Rare, limited, etc. Your use would have to be limited as well. No daily drivers. maybe 1000kms a year. Honda Civic wont cut it.
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