INVEST IN FONDS DE SOLIDARITE FTQ PENSION
Use this tool to see the benefit of investing in the Fonds de Solidarite FTQ instead of a regular RRSP. What makes this option attractive is the fact that you will get an additional tax savings of 30% in addition to the regular RRSP deduction.
There are two Sections. The first shows how much your investment amount actually cost you (net amount) after your tax refund with the additional rebate.is factored in compared to investing in a regular RRSP. In the second section your investment amount with the Fonds FTQ is increased so that the net amount after the tax refund is factored in will be the same as the amount with a regular RRSP investment based on your actual tax condition. This method is an excellent way of demonstrating the true benefit of the additional tax rebate..
First Section:
Select the investment amount from the dropdown list (up to a maximum of $5000), enter the projected growth rate and your annual income (after your RRSP deduction but not including the additional amount you want to invest in the Fonds FTQ RRSP) for tax calculations.
Enter your age at start and end of contribution, and your retirement age.
The summary table will provide you with the comparison between the two savings method.
Second Section:
Enter the additional amount you will have to invest above the selected investment amount and adjust this amount (up or down) as required so that the net investment amount shown directly below is equal to the net amount (after tax refund) of a regular RRSP investment.
Look at the summary to see difference in the investment value at retirement between the 2 RRSP investment.
Note: This special condition is subject to change or elimination at any time so please check online or with your bank.
BORROWING TO INVEST IN AN RRSP
Use this tool to evaluate the benefit of borrowing to invest in your RRSP.
Select the amount from the dropdown list and enter the interest rate on the borrowed funds.
Enter the growth rate (%) of your RRSP and your yearly income before RRSP deduction and select the repayment period (months to repay) or the monthly amount and review the table to see the benefit of borrowing to invest for your retirement.
QPP WITHDRAWAL AGE EVALUATION - PRE-TAX
The Quebec QPP pension allows you to claim starting at age 60 through 70 with 100% of the maximum amount set at age 65. This means a claim at 60 and 70 will receive approximately 66.4 % and 142% respective of the 65 amount. Use this tool to evaluate the age you think is right to start claiming the QPP pension.
Enter the personal information and your estimated claim amount if you will not be receiving the maximum amount and leave blank for max. amount. You can get your actual amount from the Quebec Revenue site.
If you plan on working while collecting the QPP pension, you will receive the supplement income amount. This amount will be added to your QPP amount which is also indexed and will be cumulative i.e. the amount added in the previous year is maintained and will remain even after you've stopped working.
Start your evaluation by selecting the claim age from the dropdown list (between 60 and 70). Look at the "Difference" amounts for the 65 and 70 claim age columns. A red negative amount indicate that your selected claim age yields a lower value than the 65 or 70 claim age at the particular age. This is the break even age and should give you an idea of what age is best for you.
NOTE - All values are based on gross, pre-tax amounts.
QPP WITHDRAWAL AGE EVALUATION - AFTER-TAX
Same as the Pre-Tax evaulation except all amounts are calculated based on after-tax dollars.
Enter your estimated pre-retirement income between ages 60 and retirement age as well as your average retirement income. Actual combined federal and provincial tax will be calculated based on the income you entered.
Select your claim age and review the difference compared against claiming at age 65 and at 70. Negative values are shown in red and confirms the crossover age when claiming at 65 or 70 will be more economically beneficial.
NOTE - All values are after tax amounts using the tax rate corresponding to your income.
Tools to help you evaluate the benefits of various saving possibilities which can help you maximize your saving potential.
SPOUSAL RRSP WITHDRAWAL AND RE-INVESTMENT
Use this tool to evaluate the benefit of cashing in an RRSP of a lower income spouse and re-investing and claiming the tax bebefit with the higher income partner.
Start by entering the number of years to retirement, your RRSP's estimated growth rate, and the amount you wish to withdraw from your spouse's RRSP or your Spousal RRSP. Spousal RRSP is an RRSP that you've contributed to in your spouse's name but have claimed the tax deductions yourself.
Enter your spousal (lower) annual income and your annual income.
In the example, the spreadsheet his calculating your spouse's added tax implication on a $15,000 withdrawal and the resulting after-tax amount is $11,312. This amount is applied against your income and the refund amount specific to the RRSP is calculated at $11,312. This amount is re-invested in an RRSP in your spouse's name or yours and the tax deduction is claimed on the higher income.
Set your net income amount and the sheet will cycle through 7 years of re-investing the refunded amount to arrive at a value of $49,289 compared to $24,493 if you left the RRSP alone. That's a gain of ~100%!
This strategy can be applied without restictions, if the spousal RRSP was initially invested and claimed by your spouse. In the case of a spousal RRSP, where you've contributed in your spouse's name and have already claimed the tax reduction on your income, it is still possible but there are conditions that must be met. See Spousal RRSP on the Retirement Basics page for more information..
RRSP VS. TFSA
Use this tool to find out if investing in an RRSP or a TFSA is right for you. You should read about the pros and cons in the Retirement Basics section.and use this tool to see for yourself which is best for your financial situation.
Start by entering your basic personal information - current age, age at retirement, investment growth and inflation rates.
Enter your annual contribution and you net income before tax. Your combined (Fed and Prov.) tax rate will be calculated and your net after-tax investment value is displayed as your TFSA investment amount along with the value of your investment at retirement for both RRSP and TFSA options.
To see how your investment will pan out over your retirement, you must enter the projected investment return rate and the amount you plan on withdrawing yearly. Select from the dropdown list the amount you need to withdraw to get the net monthly amount indicated by trial and error. Once you've reached the desired net value, select the TFSA amount to arrive at approximately the same net amount. As the TFSA amount is not taxable, you will need withdraw less.
By comparing when the RRSP and TFSA balance runs out you will know which option is better for you.
Try playing with the Net Taxable Income amount (high to low) and the retirement income required (high to low) to see what some of the experts are saying. That a High/High and Low/Low combination would prove more advantageous with TFSA. Please note the comparison does not take into account the impact on federal assistance like the GIS (Guaranteed Income Supplement) for low retirement incomes. Having your saving in an RRSP will likely push you above the eligibility threshold prevent you from receiving the GIS.
SAVINGS TOOLS
