Company Pension Retiree

Mark and Cheryl contacted our office regarding retirement options after being referred by a friend. Mark was ready to retire from his current job as a steelworker and devote more time to his farm. The family had plans for retirement already in the works, but wanted to discuss the timing and whether they were financially ready to retire. Mark had a company retirement package, but was worried about the current downturn in the markets. He wondered if he had enough money to fund his retirement and reach all of his financial goals if he were to retire this year. Cheryl was still working and planned to retire within five years and Mark had a relatively small amount in his RRSP. All of these factors had to be taken into account when considering Mark’s retirement options.

We first recommended that they both utilize an RRSP loan to maximize their RRSP contributions and help fund their retirement in future years. Mark and Cheryl then used the refund for the RRSP contribution to pay off current debt. We reviewed prior year income tax returns to ensure that the family claimed all eligible deductions and credits. Upon doing so, we noticed that both Cheryl and their son were eligible for the Disability Tax Credit, but did not claim this credit on any prior tax returns. The family applied for adjustments on previous returns. The Disability Tax Credit for both could then be applied to current debt and post-retirement plans.

While working with the family over the next few months we were able to determine that Mark’s retirement plans could be implemented this year. In order to ensure a smooth transition from the workplace, we  prepared all the forms in advance, met with the client at the company administrative offices to ensure all paperwork was signed, and collaborated with both the fund companies and pension administrator to ensure that no further documentation was required and to confirm when transfers would be made. Upon transfer of funds to the mutual fund companies, we again met with the client to go through the options available and financial goals to ensure that the client’s expectations were being met.

At this time we reviewed all sources of retirement income, calculated the proper amount of income tax to be withheld from CPP, company pension, retirement income funds and Life income funds to avoid any nasty surprises the following spring when we completed the family’s tax returns.

With long term planning in place, Mark can enjoy his retirement years and go forward with his post-retirement plans.