Justin, I Do Not have A Million Dollar Trust Fund

[TFSA increase is allowing me to do a bit of meagre Estate Planning]


 If you listen to Justin Trudeau, the increase in Tax Free Savings Accounts annual contributions is something that only benefits the very wealthy.  Justin really has no time for seniors. It is pretty obvious by his actions and his policies.

Let’s get this straight.  I am far from rich. I am a senior living on a fixed income.  What that means is that every time tax money is wasted, it affects folks like me directly in the form tax increases that deplete my monthly “earnings”.  Moreover, there is not a thought in Justin’s campaign or platform that will make my life or the life of seniors more pleasant.  The derivative of Justin’s unbridled plans to create deficits for Canada will most certainly mean one of two things for seniors like me: either higher taxes will be extracted from my meager monthly pension income OR reduced social programs that will hurt even more.  The Mulcair scheme is even more harsh and heavy handed.  The Federal NDP are campaigning on a platform of forced budget balancing. 

For seniors, it is apparent that we are not one of Mulcair’s priorities.  We are not a “sexy” priority like his penchant for hiring more environmentalists or propping up drains on tax-payers money like CBC.  Be assured, that all that civil service union support has a hefty price tag attached.  When those civil service union contracts come due, adjustments will be needed.

There is a story about the breeze from a butterfly’s wing movement far away in Africa being ultimately part of a hurricane in Florida.  Walk a mile in the shoes of a senior and that analogy is very real when it comes to government economics.

Some of us (seniors) did all the right things.  We worked hard; we paid our taxes and put our now adult kids through university and we set aside money each month in Registered Retirement Savings plans like I did.   We were “old school” that way.  Be assured, my little retirement nest egg is not at all like the multi-million dollar fund left to Justin Trudeau. 

On the other hand, most of us (seniors) did not want or need Ontario Premier Kathleen Wynne to create a “made in Ontario “pension plan.  (incidentally, we were never asked).  Had Wynne “asked” I would have shared my thoughts on the callous way the Ontario Liberals squander tax money?  She was (apparently) wise enough to avoid hearing about gas plants, helicopters and PanAm games.

She certainly did not want me to show her my monthly hydro (electricity) bill. It contains staggered rates that dictate that seniors (like me) must avoid consuming electricity during the day time.    If we want to avoid paying premium rates, we simply shut off power usage as much as possibly until after dark.  Not a big problem except in the winter season when many days are dark.  Premier Wynne cares little about the fact that many of us sit in darkness during the day time and wait until night time to use the oven or the laundry.

Take a look at your monthly electricity bill. It contains a detailed listing of things you are paying for that ARE NOT electricity.  If you are a senior, you read things like your hydro bill.  The things listed on such hydro bills will mean less money for me to buy groceries etc.  We pay for stuff like “Delivery Charges”, and “Debt Retirement” each and every month.

TFSA as an Estate Planning Tool

While everyone was distracted by the PanAm games and the federal election, the Ontario Liberal government launched another attack on seniors.  This one is called the Estate Administration Tax and has the ability to now reach into your grave and make one more tax grab as you die.

Here is something that most people do not know.  That annual increase in TFSA withdrawals to $10K provides a nice tool that seniors can use to prevent the tax man from taking away our savings. 

RRSP deposits were made during my work-life into a tax free shelter.  Since my tax rate was higher during my work days, the ability to shelter some of it by way of Registered Retirement Savings contributions actually saved me some money AND allowed me to plan ahead for retirement years.

Incidentally, if you think that Canada lavishes benefits on seniors, PLEASE give your head a shake.  Between your Canada Pension Plan and Old Age supplement, your annual income will be $16,800.  Measure that number against any poverty scale that suits you.

Now; back to that RRSP. It is a given that it would be expected that when/if I withdrew my savings from my RRSP, I would pay taxes.  That was expected and seems fair.

However, if you are a widower, single or a widow, the entire proceeds of the residue of your RRSP will become part of your estate. Those who are still married are able to leave that residue to their surviving spouse – but not to your children.  Unless you are married to someone considerably younger, the inevitable will happen and the survivor’s estate will also catch the taxman’s eye.

So, let’s say that you decide to drain down you RRSP carefully.  You (of course) are not prone to squandering that RRSP nest egg on a Lamborghini or a yacht.  Instead, you are likely to bank that withdrawn money by way of a Tax Free Savings Account in.  It’s a slow process even at the new $10,000 annual deposit limit to put away part of your estate for your children by way of a joint TFSA account.

Hat’s Off to the Present Government


If only they’d increase the annual contribution rate into TFSA was doubled.  Even better, allowing the entire proceeds of RRSP withdrawals to be placed into TFSA accounts.

If you are a senior, I strongly suggest two things: vote to put the existing Conservative Government back in office this October and speak with your financial planner about this TFSA idea – it may mean that more of your estate is left for your children.

The Ontario Liberals new Estate Administration Tax is an ominous and mean spirited attack on seniors. Pretty much “par for the course” though.  On the one hand, their Federal leader wants easily accessible street drugs while the provincial Liberals gradually exclude more prescription drugs from the list of free prescription drugs for seniors.

It’s a BITCH to be a senior and I am certainly not ready to face a Liberal of NDP Federal government. 


Copyright   Thunderbird Rising 2015

 The above article is copyrighted.  You may use, copy or distribute this article conditional on attributing your source (Thunderbird Rising) and the author (Lloyd Fournier)


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