How to Receive More Income & Reduce Your Taxes
July 29, 2009 · Print This Article
It seems that Canadians are beginning to retire earlier and live longer than they were not very long ago. As a result, Canadian seniors are spending more, saving less and receiving less income than they need to live comfortably through retirement.
However, for Canadians who are 60 or better and own their own home, a CHIP home income plan could be the way to increase their cashflow without bumping them into the next tax bracket. Here’s how you can use a CHIP home income plan to create a tax-efficient income stream for you and your spouse.
By taking out a CHIP reverse mortgage, clients can use the funds they receive in a borrowing-to-invest strategy. This means that if you reinvest the money you receive from your CHIP reverse mortgage into a non-registered account, you can make regular withdrawls from this account to pay for monthly expenses, as well as deduct CHIP interest charges from your taxes.
Since, when you borrow to invest in Canada, the interest expenses that come with this type of loan are actually tax deductible. So, for Canadians, this means that the interest costs accumulated on your CHIP reverse home mortgage can be written off during the next tax season. And for most seniors, this can greatly offset the taxes they owe on Canada Pension Plan (CPP), Old Age Security (OAS) and RRIF’s.
If you’re interested in exploring this option talk with your accountant, financial planner or request to meet with a Horizon Equity specialist. We can discuss your situation with you and help you find options that will work for you. Contact Horizon Equity today!