Pension Split
- Thread starter Mediman14
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Possibly where you might wish to report your income as being a certain amount, but only individual income would qualify, vice household income…and technically your spouse would claim the split portion, so you wouldn’t be able to *claim your entire pension as your own income. That’s perhaps a stretch. Dunno. I don’t think twice about splitting. The tax benefit is notable.
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CampCricket
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I have done pension splitting since 2016. Even though I was 43 and my spouse was 49, we both have a CF Pension. I could split using his or mine. Since his pension / income is significantly lower than mine, I split mine and allocate as much as allowed to his. I can only allocate half of my cf and psac pension. Once I turn 65, I will be able to use other income like RIFs.
Whether it’s worth it or not… depends on how big the gap in income you have between your income and your spouse. My income is more than double his… so I lower my taxable income / bracket a fair bit. There is no down size other than if you go for a bank loan in your name and have to explain your taxable income has pension splitting… as the bank looks at that first and gets confused when your reported income doesn’t match the taxes…. That’s the only issue I ever ran into.
When I turn 65 (or if possible if eligible to do so when spouse turns 65), I plan to do the other form of pension splitting where I can allocate up to 50% of my Canada pension based on how many years a couple has cohabitated together… to bump up his CPP. This might help him more and this money should not be subjected to the vac clawback… as they only claw back my income as I am DEC. Should we separate or one of us dies, then the splitting stops… after you report the info to CRA.
Whether it’s worth it or not… depends on how big the gap in income you have between your income and your spouse. My income is more than double his… so I lower my taxable income / bracket a fair bit. There is no down size other than if you go for a bank loan in your name and have to explain your taxable income has pension splitting… as the bank looks at that first and gets confused when your reported income doesn’t match the taxes…. That’s the only issue I ever ran into.
When I turn 65 (or if possible if eligible to do so when spouse turns 65), I plan to do the other form of pension splitting where I can allocate up to 50% of my Canada pension based on how many years a couple has cohabitated together… to bump up his CPP. This might help him more and this money should not be subjected to the vac clawback… as they only claw back my income as I am DEC. Should we separate or one of us dies, then the splitting stops… after you report the info to CRA.
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