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CFP Prep - Hayley > Retirement Planning > Flashcards

Retirement Planning Flashcards

(95 cards)

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1
Q

What is the Yearly Basic Exemption and what does it mean

A

$3,500. No CPP contributions are required up to this amount of earnings. You pay into CPP on earnings after this amount up to the YMPE.

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2
Q

What is the tax credit for paying CPP premiums as an employed person

A

You get a 15% tax credit on your contributions

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3
Q

Is CPP and OAS considered for GIS eligibility

A

yes

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4
Q

CPP Credit splitting

A

divorced people splitting the CPP pensions credits you accumulated when together equally. Does not matter who contributed more

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5
Q

when does CPP pension sharing after you submit the application

A

The month after the application is received

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6
Q

is CPP sharing backdated

A

yes up to 12 months before application was received by Service Canada

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7
Q

how does cpp sharing work in terms of amount each person gets

A

each get half of the total they would both receive. For example, if one partner’s CPP entitlement is $800 per month and the other’s is $400, and they opt for pension sharing, each partner would receive $600 per
month ($1,200 total divided by two).

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8
Q

are CPP Post retirement benefits shareable with spouse?

A

no

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9
Q

when does Post Retirement Benefit start paying after you make contributions

A

they start paying the year following when you start contributing

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10
Q

is OAS automatic or do you have to apply

A

you have to apply

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11
Q

can OAS be retroactively paid

A

yes up to 11 months

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12
Q

when is OAS ceased if you leave the country

A

if you are gone longer than 6 months

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13
Q

Max OAS from age 65-74

A

727/mth

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14
Q

max OAS for people 75+

A

800/mth, automatically increases at age 75

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15
Q

what is an OAS return of income

A

process of reporting income for purposes of determining eligibility criteria for GIS and survivor allowance

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16
Q

is GIS taxable

A

no

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17
Q

do you have to be taking OAS to get GIS

A

yes

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18
Q

Are you automatically assessed for GIS?

A

yes when you apply for OAS and consent to CRA using their income info. If not, you have to apply

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19
Q

is the GIS amount different for individuals vs couples -if so, how

A

yes, couples may receive a combined GIS amount based on their joint income and is usually less than what a single person gets

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20
Q

residency requirements for GIS

A

must be res to apply. If you haven’t lived in Canada for 10 yrs you may not be eligible

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21
Q

what is the maximum GIS per month as of 2025 for singles

A

$1086 per month

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22
Q

what is the approx max income for an individual to receive GIS

A

$22,056

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23
Q

is research grants and spousal/support payments included in earned income for calculating rrsp room?

A

yes

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24
Q

what is max money purchase limit for

A

annual limit on DC pension plan contributions or money purchase pension plan.

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25
what is the 2025 annual money purchase pension limit
$33,810. The max people/employers can contribute to a DC pension plan in a year with out incurring tax penalties
26
what is the pension adjustment for defined contribution plan
the amount you contributed
27
are employer contributions to a DC or DPSP pension plan part of your pension adjustment
yes
28
what is a pension adjustment reversal
increases RRSP room to account for pension benefits lost or reduced upon leaving an employer sponsored pension plan before vested benefits are less than the cumulative pension adjustments reported previously
29
what is a past service pension adjustment
reflect additional pension entitlements for past service under an RPP or DPSP. Required when you receive an increase in pension benefits/enhancement to pension for previous years' contributions. Or when you purchase past service pension credits in a pension plan.
30
2025 max RRSP contribution limit
$32,490
31
what is the tax information phone service TIPS
automated phone service that provides your tax info like RRSP contribution room
32
penalty for RRSP contributions over $2,000
1% of over contribution per month until withdrawn or absorbed by next years room
33
what form do you need to file if you over contribute to rrsp
T1-OVP
34
whos contribution limit is a spousal RRSP contribution based on
the contributing spouse, not the RRSP owner's room
35
attribution rules fro Spousal rrsp contributions
contributions that are withdrawn within 3 calendar years
36
homebuyers plan max withdrawal
60k
37
lifelong learning plan withdrawal max
$10k per year to a max of $20k
38
how long do you pay LLP funds back
10 years
39
when do you start repaying LLP withdrawals
Usually in the 2nd yr after withdrawal, unless you are a student for 3 mths out of the year every year, then it is the 5th year after your withdrawal. If you don't meet the condition 2 yrs in a row, you repay in the second of those 2. years
40
how much do you repay of the LLP every year in repayment
1/10th of what you borrowed until the balance is 0
41
WHT required on RRSP withdrawals outside of quebec
0-5k 10% 5-15k 20% 15k+ 30%
42
WHT required on RRSP withdrawals outside in quebec
0-5k 5% + 15% provincial 5-15k 10% +15% provincial 15k+ 15% +15% provincial
43
WHT on RRSP withdrawals for non residents
25% no matter how much it is unless there is a tax treaty between counties
44
First TIme Homebuyer Incentive Program
for people with income below certain level to access a certain amount based on homes value. Must have a minimum down payment. It was discontinued in 2024. Must be repaid in full after 25 yrs or when house is sold.
45
How long do funds have to be in the rrsp before withdrawing for homebuyers plan
90 days
46
can you do HBP if you are still repaying HBP
no
47
what difference is there to the HBP requirements are there if you are disabled
when withdrawal is for disabled person, the house does not have to be intended to be their principal residence like it does for a regular HBP withdrawal Don't have to follow the 4 yr ownership rule
48
what form when filing taxes do you note your HBP repayment paid back
schedule 7
49
what happens if you fail to pay the HBP repayment one year
it is added to the income for the next year and is taxed
50
what happens if you sell a home you are still making HBP repayments on
you might be required to repay the balance. depending on if you buy another home or not
51
what happens to your HBP repayment if you leave Canada
repay full amount or include it in income
52
what happens when you die and have a HBP repayment balance outstanding
added to income in year of death or spouse assumes the payments
53
who can you make LLP withdrawals from your rrsp for
you, or your spouse
54
full time or part time school for LLP withdrawal?
full time unless disabled then part time
55
what is a qualified education program for LLP eligibility
course 3 months+ and 10+ hrs per week on courses
56
timing of LLP withdrawal
must enrol or have received an offer to enroll before march of the year after the withdrawal
57
can you be on EI and do LLP withrawal
no
58
can both spouses use their RRSPs for the LLP for one spouse to go to school
yes
59
what if you leave school before repaying LLP
you pay back all in the year you stopped going
60
what happens if you turn 71 before you repay all LLP
you must repay all before you convert to RRIF otherwise included in income
61
can you convert from a RRIF to a RRSP
yes if under 71
62
what is a retirement allowance
severance
63
what are the rules fro transferring retirement allowance to rrsp
doesnt affect contribution room. 2k per year or part year of service before 1996 PLUS 1500 per year or part year of service before 1989 that employer didn't contribute to a pension
64
what is a Refund of Premiums in RRSPs
paying rrsp to beneficiaries upon death, defering income tax (so to spouse, dependent minor, or child with disability)
65
what are the three ways to hold a tfsa
deposit account (just earns interest) annuity contract trust arrangement (what i have)
66
voluntary disclosure for tfsa overcontribution
if you overcontributed due to honest mistake and don't notice for a long time.
67
exempt period for TFSA benes
time between date of death and end of following calendar year when TFSA can continue to earn tax free
68
Exempt Contribution by survivor to a TFSA
contributing to your TFSA the same amount as the FMV of you deceased spouses TFSA at death, within a certain period, will not impact contribution room
69
can a 3rd party contribute to a fhsa
yes
70
when do pensions usually vest in canada
after 2 yrs
71
can you get your pension if its non contributory and non vested yet
no, if you leave before non-contributory pension has vested you may lose the entitlement
72
do you get the pension if its contributory and not vested and you leave
you are entitled to your own contributions but may lose employer portion
73
is provincial pension legislation based on the jurisdiction of the company or the employee
company
74
what is CAPSA
canadian association of pesnion supervisory authorities. inter-jurisdictional to promote harmonization between the provinces pension legislation and protect pension plan members
75
are DB employee contributions tax deductible
yes
76
normal retirement age for full DB pension
65
77
what is RUle of 85
some pension plans allow retiring and full pension when age plus service=85
78
final earnings pension
DB pension based on the employee's final earning years
79
flat benefit in DB pension
fixed benefit amount based only on years of service, particularly nice for low income earners
80
Pension Benefit Calculation for DB
annual benefit= career average earnings x benefit rate X yrs of service
81
DB pension benefit options
life income (no survivor benefit) life income with guarantee period joint and survivor pension Joint Survivor with guarantee period (if both spouse and retiree die within the specified period, bene gets it until period ends)
82
types of formulas determining how much the employer contributes to a DB plan
percentage of pensionable earnings of the employee (higher for higher earners) fixed dollar amount based on yrs or hours worked Flat benefit (good for flat benefit pension payments)
83
what is the most common contribution type for DC plan
percent of pensionable earnings
84
who is a Pooled Retirement Pension Plan for
people who want a less expensive way to have a pension and dont have access to a work pension. FOr smaller employers who don't want the complexities of running a pension themselves
85
what is the max DPSP contribution
either 15% of last year earned income or money purchase limit, whichever is less
86
does DPSP contributions by employer reduce rrsp room
yes
87
contribution methods for dpsp
percent of profits percent of employee earnings fixed dollar per employee
88
is there a lifetime limit that an employer can contribute to a dpsp
yes
89
specified pension plans
not commonly used in isolation, it more applies to specified features like a Specifies Multi Employer Pension which is one pension for people working for multiple employers in like industries but having one pension between them
90
are locked in fund protected from creditors
usually yes
91
do locked in coounts offer unlocking for shortened life expectancy
yes sometimes
92
what happens to your locked in funds if you become non resident
may have option to withdraw the money
93
according to the textbook, are registered withdrawal WHT levels tiered?
Yes, so 10% of first $5k, 15% on 5-15K and 30% on the rest. (not sure if this is true)
94
can you transfer assets from an RRSP to a LIRA
sometimes
95

CFP Prep - Hayley (10 decks)

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