All Canadian investors have access to various government programs, many of which provide incredible long-term value. Whether we’re talking about retirement accounts or various social insurance programs, there’s plenty for those thinking long-term to consider.
Aside from investing in the right allocation of dividends, value or growth stocks, investors need to keep in mind a number of other factors when planning for retirement.
I’ve scoured the range of personal finance experts out there with advice on this topic, and these are the three pieces of advice that really stood out to me.
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Make sure to apply for your benefits
Perhaps the most simplistic, yet valuable, piece of advice I came across when looking at specific rules around most government benefit programs is that an application is required for most. In other words, just because one’s residency status or immigration status is secured, that doesn’t mean that certain government benefits will be automatically credited to individuals who don’t apply.
Every program is different, and some indeed do enroll folks automatically when they hit certain age thresholds. But for programs such as OAS and the Canada Pension Plan, an application must be submitted roughly six months before one’s eligibility date. Other government programs running at the provincial level, such as housing and prescription drug support, also require individual applications.
Know the eligibility criteria for the programs one will utilize
Again, every program is different, and while most government programs in Canada have eligibility requirements, these can vary in terms of their range and scope.
Many programs (such as OAS and other retirement programs) have age requirements in order to begin taking distributions. Other programs have various income limits (child benefits, GIS, and other programs, for example), which exclude folks making above a certain amount.
Having the correct documentation in place to ensure that automatic increases are pushed through is an important piece of the puzzle. Additionally, those looking to claim benefits will want to ensure their most recent tax return is filed – that can slow down the process considerably if various government agencies are waiting on the CRA to finalize your return.
File your taxes every year
That leads me to my last point. Government benefits will often be withheld or denied if the government has reason to believe that back taxes may be owed. Ensuring that one’s personal (or family) tax return is filed with the Canada Revenue Agency can not only save a big potential future tax bill, but also lay the groundwork for folks to receive the benefits they’re due.
Even if the return is small and there’s little to no income to report, it’s still necessary to report it for specific programs. Government programs such as the Canada Child Benefit, OAS, GIS, and other GST/HST tax credits require tax returns to be filed ahead of time.
