FP Answers: What's the most tax efficient way to draw down my $5-million investment portfolio?

Selling half of your non-registered investments today and repurchasing different investments, or waiting 30 days to repurchase the same investments, means paying an extra $252,000 in tax — shrinking your investments by $252,000. Modelling this, I can see a relatively small advantage by selling today if the inclusion rate rises to 75 per cent and stays there, you live another 30 years, and I don’t consider changing inflation rates.

But what if you sell and the inclusion rate doesn’t change? That’s an “oops.” The only reason you should do this is if you need the money in the next year or two. Remember, tax-efficient investing means you want to avoid tax, defer tax and earn tax-preferred income such as capital gains and dividends.

Rather than focusing on the inclusion rate, what are your thoughts on developing a family plan? It would mean changing your mindset from accumulating more for you and your wife to accumulating more for your whole family. It’s a different mindset and not everyone wants to, or can, make the mental shift.

Think of the opportunities, though. You’ll be working with five people in different tax brackets, with different investment opportunities. Your children may still have RRSP and TFSA contribution room, and there may be government money in the form of registered education savings plan grants.Article content

The time to sell some non-registered money and repurchase the same investments right away in your children’s names is when the next market crash comes. The future growth, income and tax liabilities will be in their names, not yours. Maybe the biggest benefits to family planning are preparing your children to receive a large inheritance without squandering it and seeing both them and your grandchildren flourish.

Source: News Formal (newsformal.com)

Canada Latest News, Canada Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

Ontario to spend $17.1M to expand services at UHN, plan to create beam therapy facility | Globalnews.caThe Ministry of Health said the government will spend up to $5 million to plan for the country's 'first-ever hospital-based proton beam therapy facility.'
Source: GlobalNational - 🏆 81. / 51 Read more »

Pierre Poilievre’s 'Axe the Carbon Tax' rally draws hundreds of supporters in Ottawa\u0027In mere hours, the clock will run out and Trudeau’s tax hike will take effect at our gas pumps, on your heat and, indirectly, on your food and essentials of…
Source: natnewswatch - 🏆 58. / 59 Read more »

Pierre Poilievre’s 'Axe the Carbon Tax' rally draws hundreds of supporters in Ottawa\u0027In mere hours, the clock will run out and Trudeau’s tax hike will take effect at our gas pumps, on your heat and, indirectly, on your food and essentials of… Is that a lot? 😮
Source: nationalpost - 🏆 10. / 80 Read more »

A look at financial help and incentives for first-time homebuyers in B.C.From the Home Buyers\u0027 Plan for a down payment to no property transfer tax, we look at what help you can get as a first\u002Dtime buyer in B.C. 'Safi says that more than half of his first-time homebuyers are receiving gifts from their families toward their purchase.' step 1: have rich parents step 2: don't have poor parents
Source: VancouverSun - 🏆 49. / 61 Read more »

The latest sign of inflation? $5 items at Dollarama | CBC NewsA Canadian retail chain that made its name by selling things for a dollar is raising some of its prices to $5. Justinflation JustinFlation God damned Putin. Greed will be the death of this company and others.Yet they refuse to pay more wages🤡🤡🤡
Source: CBCNews - 🏆 2. / 99 Read more »

Guilty verdicts in Quebec case of lucrative maple syrup robbery | CBC NewsSupreme Court rules one of the men behind the notorious 2012 maple syrup heist in Quebec will have to pay a $9.1M fine. Court says Richard Vallières must pay for the value of the stolen syrup, not just the profit he made selling it. Previous story: Sweet deal. janycemcgregor Sweet More explanation to come?
Source: CBCAlerts - 🏆 37. / 63 Read more »