Ideal disbursement sequence
*Possibility of eligible income splitting with the spouse: Income splitting applies in several ways, depending on the type of income. In most situations, splitting is an annual choice made by spouses when filing federal and provincial tax returns. However, in some cases, splitting must be done differently. For example, if a spouse receives the taxable QPP retirement pension, they can reduce tax by requesting the pension to be split with their eligible spouse directly with Retraite Québec. (the pension must be divided directly by Retraite Québec, and there are criteria to meet to qualify).
According to Retraite Québec, it is not necessary for both spouses to have contributed to the QPP to divide one of their pensions, but both spouses must be 60 years or older. If both spouses have contributed to the Plan, they must both receive the retirement pension for their pensions to be divided.
** The borrower gradually uses its guaranteed line of credit to obtain non-taxable income.
*** A very interesting option for business owners, who can withdraw the capital dividend tax-free.
According to Retraite Québec, it is not necessary for both spouses to have contributed to the QPP to divide one of their pensions, but both spouses must be 60 years or older. If both spouses have contributed to the Plan, they must both receive the retirement pension for their pensions to be divided.
** The borrower gradually uses its guaranteed line of credit to obtain non-taxable income.
*** A very interesting option for business owners, who can withdraw the capital dividend tax-free.
Chart: Insurance PortalSource: iA Financial Group (October 2023)Created with Datawrapper