Scenario 5: Single Taxpayer – No Children

Glen is single, age 55.  He lives alone in a rental apartment in Hamilton, Ontario.  His current salary is $55,000.  His rent is $1,000/month.

Glen is single, age 55.  He lives alone in a rental apartment in Hamilton, Ontario.  His current salary is $55,000.  His rent is $1,000/month. Glen has a defined contribution pension plan, no RRSP savings and some TFSA savings.  He plans to retire in five years at age 65.

Will Glen be better off in 2015 than in 2014?

Glen is generally unaffected by changes announced in October 2014 or the 2015 Budget changes.  If Glen’s income in 2015 is unchanged from 2014, his taxes will be reduced slightly as a result of indexation of personal amounts and tax brackets.  Glen will pay slightly more in Employment Insurance Premiums and contribute more to CPP in 2015 as a result of the increase in the maximum insurable and pensionable earnings.

Glen may benefit from the increased TFSA contribution limit but only if he is able to find the cash to make the contributions.  Should he come into some money, from an inheritance perhaps, the larger TFSA contribution room could allow him to eliminate taxes on the money as his RRSP contribution room will likely be very small.

Glen may also benefit from the increase in duration of Employment Insurance Compassionate Care Benefits from six weeks to six months if he has to care for ailing loved one in the future.