Retirement & Pension Income Tax Strategies
Reduce Taxes on Your Retirement Income & Maximize Your Savings
Retirement planning is about more than just saving money—it’s about ensuring that your retirement income is tax-efficient. Without a proper tax strategy, you may pay more in taxes than necessary on your RRSP withdrawals, pensions, CPP, OAS, and investment income.
At Westview Accounting & Tax Services Inc., we specialize in retirement tax planning for North Vancouver residents, helping retirees minimize taxes, maximize government benefits, and create a sustainable income plan.
Key Tax Strategies to Reduce Retirement Taxes
Pension Income Splitting (T1032)
Retired couples can split up to 50% of eligible pension income with their spouse to lower household tax burdens.
Strategic RRSP & RRIF Withdrawals
Start gradual RRSP withdrawals before age 71 to avoid large mandatory RRIF withdrawals later.
Convert RRSP to RRIF before age 71 if tax rates are lower now than in the future.
Minimizing Old Age Security (OAS) Clawbacks
If income exceeds $90,997 (2024 threshold), OAS benefits start getting reduced at a rate of 15%.
To reduce OAS clawbacks, consider income-splitting, TFSA withdrawals, and delaying RRSP withdrawals.
Using a TFSA for Tax-Free Retirement Income
Since TFSA withdrawals don’t count as taxable income, they don’t affect OAS clawbacks or tax brackets.
Ideal for funding emergency expenses and extra retirement spending.
Deferring CPP & OAS for Higher Payments
Delaying CPP and OAS until age 70 increases benefits by 8.4% per year for CPP and 7.2% per year for OAS.
Maximizing the Pension Income Credit (Line 31400 on T1 Return)
Retirees over 65 can claim a $2,000 federal tax credit on eligible pension income.
Pension splitting can help a spouse qualify for this credit as well.
Tax-Efficient Withdrawal Order for Retirement Income
Best order for withdrawing retirement income:
Non-Registered Investments (Interest & Dividends)
RRSP/RRIF Withdrawals (To minimize later mandatory RRIF withdrawals)
TFSA Withdrawals (Since these are tax-free, they should be used last if possible)
Gifting & Estate Planning to Reduce Future Taxes
Consider gifting assets to heirs before death to avoid high estate taxes on RRIFs and investments.
Set up a TFSA for beneficiaries to grow wealth tax-free.
Understanding How Retirement Income
is Taxed in Canada
Different types of retirement income are taxed in different ways:
Canada Pension Plan (CPP) Benefits (T4A(P))
Fully taxable, but can be split between spouses to reduce tax burdens.
Old Age Security (OAS) (T4A(OAS)
Fully taxable, with potential clawbacks if income exceeds the OAS threshold ($90,997 in 2024).
Employer Pensions (T4A)
Fully taxable, but eligible for pension income splitting.
Registered Retirement Income Fund (RRIF) Withdrawals (T4RIF)
Fully taxable, with minimum withdrawal requirements starting at age 71.
RRSP Withdrawals (T4RSP)
Fully taxable when withdrawn, but can be strategically withdrawn at lower tax rates.
Investment & Dividend Income (T5, T3)
apital gains are taxed at 50% of the amount, while dividends may qualify for the dividend tax credit.
Tax-Free Savings Account (TFSA) Withdrawals
Not taxable, making TFSA a great option for tax-efficient retirement income.
TIP: Without careful planning, high-income retirees may face OAS clawbacks, high RRIF tax rates, and excessive taxes on investment income.
Understanding How Retirement Income
is Taxed in Canada
Different types of retirement income are taxed in different ways:
Canada Pension Plan (CPP) Benefits (T4A(P))
Fully taxable, but can be split between spouses to reduce tax burdens.
Old Age Security (OAS) (T4A(OAS)
Fully taxable, with potential clawbacks if income exceeds the OAS threshold ($90,997 in 2024).
Employer Pensions (T4A)
Fully taxable, but eligible for pension income splitting.
Registered Retirement Income Fund (RRIF) Withdrawals (T4RIF)
Fully taxable, with minimum withdrawal requirements starting at age 71.
RRSP Withdrawals (T4RSP)
Fully taxable when withdrawn, but can be strategically withdrawn at lower tax rates.
Investment & Dividend Income (T5, T3)
apital gains are taxed at 50% of the amount, while dividends may qualify for the dividend tax credit.
Tax-Free Savings Account (TFSA) Withdrawals
Not taxable, making TFSA a great option for tax-efficient retirement income.
TIP: Without careful planning, high-income retirees may face OAS clawbacks, high RRIF tax rates, and excessive taxes on investment income.
How Westview Helps You Create a
Tax-Efficient Retirement Plan
How Westview Helps You Create a Tax-Efficient Retirement Plan
Optimizing Pension Income
Splitting & Withdrawals
We structure CPP, OAS, RRSP, and RRIF withdrawals for maximum tax efficiency.
Reducing OAS Clawbacks & Retirement Tax Burdens
We implement income-reduction strategies to keep more of your OAS benefits.
Strategic TFSA & RRSP
Withdrawal Planning
We ensure your savings last longer with tax-free income sources.
Investment Tax Optimization for Retirees
We help you reduce capital gains tax and optimize dividend income.
Estate & Inheritance Tax Planning
We create strategies to transfer wealth efficiently while minimizing estate taxes.
Why Work with Westview Accounting & Tax Services Inc.?
At Westview Accounting & Tax Services Inc., we combine deep expertise with personalized service. Our team takes the time to understand your unique financial situation and offers tailored advice to ensure your return is accurate, compliant, and optimized for maximum refunds. We don’t just file your taxes—we help you plan smarter for the future. Whether you’re a newcomer, business owner, or retiree, you can trust us for clear guidance, strategic savings, and peace of mind all year long.
Experienced accountants
Transparent, upfront pricing
Professional review of all tax documents
Personalized advice for your financial goals
Convenient online or in-person filing options
Lower Your Retirement Taxes & Keep More of Your Hard-Earned Savings!
Retirement should be about enjoying your wealth, not overpaying taxes. Let Westview Accounting & Tax Services Inc. help you develop a tax-efficient retirement plan, minimize RRIF taxes, and keep your OAS & CPP benefits intact in North Vancouver, BC.
Contact Us Today! Get expert retirement & pension tax planning services!
Westview Accounting provides trusted accounting, tax, and bookkeeping services across North Vancouver and Surrey. We help individuals and businesses stay compliant, informed, and financially confident.