For the people who receive a pension or know people who receive pensions.
Do you get tax taken off your pension before receiving it? Or do you pay at the end of the year?
I honestly had no idea you had a choice in this. I am inclined to get 25% taken off before receiving it.
Our local library had Service Canada employee's available for questions last week, so hubby finished work early as he had some questions about the forms you have to fill out to apply for your Canada Pension (CPP) and OAS.
If you were born in Canada and had worked your 40 years the forms are pretty straight forward. However, as we were born outside of Canada and hubby worked in the UK and is getting UK pensions they are a bit more complicated.
I will say, I am amazed when people say they are just going to retire without pre-planning anything.
Do you have any pension stories to share?
6 comments:
Yes, definitely get income tax deducted from your pension. But if you are able, talk to a financial advisor to help you decide exactly how much to have deducted. 20 pct might be enough. I don’t know your personal situation, so best to check with an expert.
Peggy
We have extra taken off our pensions which means we get a nice little windfall back when we do our income tax. Some would argue that's not wise because the government has the use of *your* money for that period of time but for us it's a small price to pay. I don't remember what % we have taken off though.
Yes Gill, I have tax deducted from CPP and OAS monthly as I don’t want to pay Canada Revenue a lump sum every year
at income tax.
The monthly deductions haven’t been missed so I am quite fortunate.
Gill, I have had income tax deducted monthly since I started collecting CPP and OAS in 2010. It appeals to
me as I detest having to pay a lump sum to Canada Revenue annually. I am fortunate in being able to
do this.
Read your blog daily.
Lea
My pre payment tax deductions used to be on my self directed IRA. I had the financial institution submit the max allowed to the tax people, to save surprises at tax time.
We don't have taxes taken off and so far have been lucky enough to always get money back. I do know those that do get taxes taken off though. Seems like they get less back overall than we do.
God bless.
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