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Definition of Retire
To extinguish a security, as in paying off a debt.
Employer-sponsored and other plans that allow contributions and earnings to
A federal Act that sets minimum operational and funding standards for employee benefit
A personal savings account into which a defined
An IRA comprised of an annuity that is managed
A pension plan that does not follow ERISA and
A retirement plan designed to observe all of the requirements
This is a recently coined phrase describing the concept of using Universal Life Insurance to tax shelter earnings which can be used to generate tax-free income in retirement. The concept has been described by some as "the most effective tax-neutralization strategy that exists in Canada today."
Commonly referred to as an RRSP, this is a tax sheltered and tax deferred savings plan recognized by the Federal and Provincial tax authorities, whereby deposits are fully tax deductable in the year of deposit and fully taxable in the year of receipt. The ability to defer taxes on RRSP earnings allows one to save much faster than is ordinarily possible. The new rules which apply to RRSP's are that the holder of such a plan must convert it into income by the end of the year in which the holder turns age 69. The choices for conversion are to simply cash it in an pay full tax in the year of receipt, convert it to a RRIF and take a varying stream of income, paying tax on the amount received annually until the income is exhausted, or converting it into an annuity with guaranteed payments for a chosen number of years, again paying tax each year on moneys received.
Commonly referred to as a RRIF, this is one of the options available to RRSP holders to convert their tax sheltered savings into taxable income.
This is an RRSP owned by the spouse of the person contributing to it. The contributor can direct up to 100% of eligible RRSP deposits into a spousal RRSP each and every year. Contributing to a spouses RRSP reduces the amount one can contribute to one's own RRSP, however, if the spouse is a lower income earner, it is an excellent way in which to split income for lower taxation in retirement years.
A savings plan registered with Revenue Canada, which allows you to set aside a portion of your earned income now for use in the future. When you contribute to your RRSP, you are eligible to claim a tax deduction. However, cashing RRSPs at a later date will result in the payment of tax.
A date before maturity, specified at issuance, when the issuer of a bond may retire part of the bond
The price, specified at issuance, at which the issuer of a bond may retire part of the bond at a
A security backed by a pool of pass-throughs , structured so that
Interest payment plus repayments of principal to creditors, that is, retirement of debt.
Deferred nominal life annuity
A monthly fixed-dollar payment beginning at retirement age. It is nominal
retire or pay off debt.
Normal annuity form
The manner in which retirement benefits are paid out.
A fund that is established for the payment of retirement benefits.
Single-premium deferred annuity
An insurance policy bought by the sponsor of a pension plan for a single
Sinking fund requirement
A condition included in some corporate bond indentures that requires the issuer to
stockholders' equity, statement of changes in
Although often considered
pay related to current performance
A formal agreement between an entity and its employees, whereby the
Fund established to retire debt before maturity.
A retirement plan set up by an employer, into which employees can
A retirement plan similar to a 401k plan, except that it is designed
Coverdell Education IRA
A form of individual retirement account whose earnings
Defined Contribution Plan
A qualified retirement plan under which the employer
Profit Sharing Plan
A retirement plan generally funded by a percentage of company
An IRA that an individual sets up for the express purpose of receiving
Savings Incentive Match Plan for Employees (SIMPLE)
An IRA set up by an employer with no other retirement plan and employing fewer than 100 employees,
Life Income Fund
Commonly known as a LIF, this is one of the options available to locked in Registered Pension Plan (RPP) holders for income payout as opposed to Registered retirement Savings Plan (RRSP) holders choice of payout through Registered retirement Income Funds (RRIF). A LIF must be converted to a unisex annuity by the time the holder reaches age 80.
Registered Pension Plan
Commonly referred to as an RPP this is a tax sheltered employee group plan approved by Federal and Provincial governments allowing employees to have deductions made directly from their wages by their employer with a resulting reduction of income taxes at source. These plans are easy to implement but difficult to dissolve should the group have a change of heart. Employer contributions are usually a percentage of the employee's salary, typically from 3% to 5%, with a maximum of the lessor of 20% or $3,500 per annum. The employee has the same right of contribution. Vesting is generally set at 2 years, which means that the employee has right of ownership of both his/her and his/her employers contributions to the plan after 2 years. It also means that all contributions are locked in after 2 years and cannot be cashed in for use by the employee in a low income year. Should the employee change jobs, these funds can only be transferred to the RPP of a new employer or the funds can be transferred to an individual RRSP (or any number of RRSPs) but in either scenario, the funds are locked in and cannot be accessed until at least age 60. The only choices available to access locked in RPP funds after age 60 are the conversion to a Life Income Fund or a Unisex Annuity.
spousal RRSP (Canada)
The RRSP rules allow you to contribute to an RRSP for your spouse and claim the deduction yourself. Your total contribution (to your own and your spouse's plan) is still subject to your normal contribution limits, minus any personal pension adjustment and any past service pension adjustment, plus any unused contribution room from prior years and any pension adjustment reversal. Generally, the advantage is that your spouse will ultimately be the one who reports the income for tax purposes when the funds are withdrawn on retirement or otherwise (certain restrictions apply). If your spouse will have a lower income than you when the funds are withdrawn, significantly lower taxes may be payable on the withdrawn amount.
Canada Pension Plan (CPP)
A plan that provides retirement and long term disability income benefits to residents of Canadian provinces (excluding Quebec).
Assets used to pay the pensions of retirees. An investment institution established to manage the assets used to pay the pensions of retirees.
Quebec Pension Plan
A plan that primarily provides retirement and long-term disability income benefits for residents of Quebec.
Registered retirement Savings Plan - A plan enabling Canadian citizens to establish tax-sheltered accounts to accumulate money towards retirement.
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