Tag Archives: Income tax

Good Retirement Planning

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Most seniors look forward to a good life in retirement.  However there are now two key changes that mean that this only comes through careful financial planning for your retirement. 

  • Seniors are living longer
  • The major recession has depleted the funds they may have accumulated to cover their retirement.

In other words, you may have to trim your spending to make your savings last.  Just consider one of the examples quoted in the Star news item:

When Janet and Bob retired at age 55, they were earning a joint income of $400,000. Both were senior executives in the corporate world.  Now in their late 60s, they live more frugally. No longer do they own a cottage up north, buy new cars, eat in restaurants or rent condos in Florida with friends.  They live on a budget of $60,000 to $70,000 a year, which doesn’t include debt, to make their savings last.

Statistics Canada published a report in 2005, which detailed the spending patterns of older people:

  • Households age 75+ spent 73 cents of each income dollar on personal consumption.
  • Food, shelter and transportation made up the lion’s share (61 to 68 cents) of each consumption dollar.
  • Households pay more for government and private health insurance plans than 20 years ago.  There are higher out-of-pocket expenses for health costs not covered by insurance, such as prescription drugs, other medical equipment, dental services and eye care.

Here are some of the ways you can stretch your savings.

  • Live frugally and cut out unnecessary expenses
  • Stay healthy and vigorous
  • Give up the automobile and walk, take public transport or taxis as needed.  You’ll be much better off
  • Keep working part-time or make money out of your hobby
  • Use senior discounts to the maximum
  • Sell items on EBay
  • Learn to cook and cut down on prepared meals
  • Grow fruit and vegetables in your garden
  • Invite people to your home instead of dining out.
  • Buy any needed items on Craigslist or at Value Village
  • Sell unwanted belongings on Craigslist.
  • Have a financial planner and meet say twice a year to see if  you are still on track

As a retiree, you have fewer work-related expenses, you pay less in personal income tax and you contribute less to public benefit programs.  Since there is no need to leave an estate, with careful living you can enjoy what you have to the maximum and hope to die when your time comes just a little better than broke.

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Canada Revenue Agency E-mail Scam

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Given the difficult economic conditions, everyone is eager to get any income tax refund they may be due from the Canada Revenue Agency as quickly as possible.  Knowing that, the scam artists try to phish, or in other words get unwary people to give personal information that will allow them to be defrauded.  That is why last August, the Canada Revenue Agency warned Canadians of a mail scam.


The Canada Revenue Agency (CRA) is warning taxpayers to beware of a recent scam where some Canadians are receiving a letter fraudulently identified as coming from the CRA and asking for personal information. The letter is not from the CRA. A PDF version of the letter is available on the CRA Web site at www.cra.gc.ca/alert.

The letter claims that there is “insufficient information” for the individual’s tax return and that in order to receive any “claims,” they will have to update their records. The letter attaches a form specifically requesting the individual’s personal information in writing, via fax or email, including information on bank accounts and passports. This letter is not from the CRA and Canadians should not provide their personal information to the sender.

All taxpayers should be vigilant when divulging any confidential information to third parties. The CRA has well established practices to protect the confidentiality of taxpayers’ information.

It appears that the scammers have moved online according to a former CRA employee, who warns all to beware of online tax scams.

Robert Day says taxpayers should be wary of the information they’re willing to give up online during tax season. Even though he worked for the Canada Revenue Agency for 30 years, he fell for the scam.

When Day clicked on a link inside an official looking email that appeared to be from the Canada Revenue Agency, it took him to an official looking website that asked for some personal information.  “I don’t know whether I had a short circuit between the earlobes or something,” said Day. “But, I went into this darn site and it had you type in your social insurance number to get into the site.”

If someone with such experience can fall for it, everyone should be doubly cautious when they receive e-mail messages that appear to come from the Canada Revenue Agency.

Today I received the following e-mail message, that purports to come from the Canada Revenue Agency.  However unless some staff members at the CRA have inferior spelling skills, this should not fool too many people.

Canada Revenue Agency scam

Worm Regards, indeed.  It is so ludicrous that one wonders if it is a deliberate spoof.  Nevertheless it can serve to warn all that more insidious e-mail scam messages from the Canada Revenue Agency are making the rounds.  Remember the CRA will not be contacting you this way and nor will the security departments of your bank or your credit card company.

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Seniors Filing Taxes – Help From Canada Revenue Agency

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The Vancouver Sun gives some useful Help for income-tax filers discussing software programs for those filing their taxes online and listing volunteer services by phone for the paper filers.

The Canada Revenue Agency has a web page specifically for Canadian seniors. This lists the numerous credits and benefits on the income tax and benefit return to which seniors may be entitled. Various resources are available to help file the income tax return accurately and on time. This is the surest way to get all the tax savings and benefits to which you are entitled.

The article does point out that 2008 is a year in which not too much has changed so the completion of the tax return should not be too difficult. The biggest challenge this year may be dealing with investment losses, given what has happened in the stock market. 

Tax relief is available, as losses can be offset against capital gains earned in other years, including three years in the past and forward indefinitely.  There is no need to refile for prior years to claim losses against past gains. A loss carry-back form (T1-A) can be completed and sent in with this year’s income tax return.

The sooner you complete your income tax return, the sooner you will benefit from any refund due to you.  Electronic returns can be processed in two weeks,  so your income tax refund will be in your bank account sooner.

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