Rethinking Professional Relationships in Retirement

Retirement planning is changing in Canada, but Canadian seniors are yet to catch up with them. 

There’s an opportunity for tax and financial advisors to get it right together, but also a significant professional hurdle when the two don’t work together on the same strategic plan. 

It was just this week that an exasperated new retiree contacted me to tell me that the financial institution she was dealing with was thousands of dollars out in estimating investment income during what she thought was a purposeful year end planning exercise.  Now, with the T-slips in hand, the investor finds herself bumped into a new tax bracket, with unfavorable tax results for 2014 and potential increases in quarterly tax instalment remittances, too.  If only her tax and financial advisors had been consulted together, results could have been different.

If you are a trusted financial advisor, providing year round tax efficient retirement income planning help is critical, especially if most of your clients are about to enter retirement.  You can help your clients better understand the changing rules on postponing CPP and OAS and the increased choices available to them for averaging down taxable income with pension income splitting, incapacity planning and asset transfer options. 

But if you don’t do so with precision, your reputation will be on the line, and this will come to light at tax time.  Retirement income planning – both on the accumulation and on the withdrawal side – is fraught with the threat of irreversible errors.  But there are two sides to this coin.  Investors must be prepared to invest in a collaborative service and see the value of doing tax-efficient retirement planning on an ongoing basis.   

Astute pre-retirees demand precision in their after-tax results from all their financial pros.  So they would be happy to know about opportunities – now at tax filing time – to minimize 2015 income taxes. Doing a 2015 retirement income plan alongside of the completion of the 2014 tax filings for the family is a smart thing to do.

A highly qualified MFA -Retirement Income Specialist working with a DFA-Tax Services Specialist can help develop tax-efficient projections that provide powerful after-tax results.

Additional Educational Resources for your clients:  The Tax Efficient Retirement Income Planning Course  and  Master Your Retirement by Douglas V. Nelson.   Shipping is free when ordered through www.knowledgebureau.com.