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- On this page
- Types of income you may receive when you retire or turn 65 years old
- How to pay income tax or other additional tax
- How to reduce the tax you owe
- How your taxes are affected when living abroad
- Forms and publications
- Related links
•Types of income you may receive when you retire or turn 65 years old
•How to pay income tax or other additional tax
•How to reduce the tax you owe
•How your taxes are affected when living abroad
Here are the most common types of income you may start to receive and have to include on your income tax and benefit return. This list is not exhaustive.
There are several ways to pay your income tax or other additional tax:
•Tax withheld at source – Generally, taxes are withheld from your pension income, but you may have to pay additional tax when you file your income tax and benefit return. You can request additional taxes be withheld at source to lower the tax you owe when filing your income tax and benefit return. For more information, go to Do you end up having to pay income tax when you file your tax return every year?
•Paying your income tax by instalments – If you receive investment, rental, self-employment income, or certain pension payments, you may need to pay your income tax by instalments. For more information, go to Required tax instalments for individuals
•Social benefits repayment – You may have to repay all or a part of your old age security (OAS) pension (line 11300) or net federal supplements (line 14600) when you file your income tax and benefit return if your income exceeds a yearly threshold. If that is the case, a recovery tax will be deducted by Service Canada from your OAS benefits. You can request a waiver from the CRA to have Service Canada reduce your income tax withheld at source if you estimate that your income for the current year will be substantially lower than the previous year. For more information, go to Line 23500 – Social benefits repayment
You may be able to take advantage of a number of deductions, credits, and expenses you can claim to reduce the amount of tax you need to pay:
•Pension income splitting – You and your spouse or common-law partner can choose to split your eligible pension or superannuation income
•Line 22100 – Carrying charges, interest expenses, and other expenses – You can claim carrying charges and interest you paid to earn income from investments
•Registered retirement savings plan (RRSP) – Deductible RRSP contributions can be used to reduce the tax you owe
•Excess registered pension plan (RPP) contributions between 1976 and 1985 – If you made current service contributions exceeding $3,500 in one or more years from 1976 to 1985 that you could not deduct, call the CRA at 1-800-959-8281 to help you calculate your deduction and claim these amounts
•Non-refundable tax credits, such as the age amount, the pension income amount, and the amounts transferred from your spouse or common-law partner reduce the amount of income tax you owe. For more information, go to Non-refundable and refundable tax credits
Find out the different tax obligations regarding retirees and seniors who live outside of Canada.
•Canadian residents going down south
•Guide T4040, RRSPs and Other Registered Plans for Retirement
•Federal Income Tax and Benefit Guide
•Form T1032 – Joint Election to Split Pension Income
•Form T1213 – Request to Reduce Tax Deductions at Source
•GST/HST credit
•Free tax clinics
•Federal/Provincial/Territorial Ministers Responsible for Seniors Forum
•Individuals – Leaving or entering Canada and non-residents
Jan 12, 2017 · The right way to draw down on retirement savings. Stave off retirement ruin with some quick math. The problem with rules of thumb is that time and circumstances can make them out of date. Such...
Nov 27, 2023 · When you receive payments after retirement or withdraw amounts before retirement, you’ll have to pay withholding taxes. The exception is, you can use the HBP or LLP to receive tax-free withdrawals. Income from RRSP withdrawals must be reported on line 12900 of your income tax return.
Sep 29, 2023 · You can withdraw $600.25 at the beginning of each month to deplete your expected balance by the end of your retirement. Display... Use the retirement withdrawal calculator to find out how long your money will last or how much money you can withdraw in retirement.
Apr 2, 2024 · Here are some of the biggest money withdrawal mistakes that should be avoided at all costs, as they can severely impact your retirement dollars. Withdrawing Before Age 59 ½. If you take money out of a retirement plan before age 59 ½, you’ll owe a 10% early withdrawal penalty.
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Jun 16, 2024 · To keep your taxes low in retirement, you could consider moving traditional IRA funds into a Roth, investing in tax-free municipal bonds, or selling your family home and living off the profit.
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