Life has many milestones. From graduating school to finding your first job, buying your first car to buying your first home, and many more! As you begin to hit your “retirement years,” the milestones don’t stop there. In fact, there are many important milestone ages to keep in mind as they can necessitate major decisions.
Age 55
Turning 55 opens up a few options for individuals with workplace pensions. Many pension plans and Locked-In Retirement Accounts (LIRAs) prohibit starting an income before the age of 55. This doesn’t mean you should start your pension on your 55th birthday, it just means you can!
55 is also the age when you can first qualify for the Pension Income Amount tax credit, if you have eligible pension income.
Age 60
Turning 60 means you’re officially eligible for your Canada Pension Plan (CPP) payments to begin. Just as with your work pension, taking your CPP at the earliest opportunity isn’t always correct. Navigating around tax planning, life expectancy and coordinating with your other income streams are all factors in when you should start your CPP.
Age 65
65 is often considered “normal retirement age” in Manitoba. And for good reason. This is the age when your CPP payments are calculated at full value AND when your Old Age Security (OAS) benefits can begin. Just as with CPP, OAS payments can be deferred if you so choose.
That Pension Income Amount tax credit from before? It gets easier to qualify for when you’re 65 too!
Age 71
71 is the last hurrah for many registered accounts. This is the last year you can make contributions to your Registered Retirement Savings Plans. This is also the last year you can own RRSPs or locked-in retirement accounts. At 71, your deadline is December 31st, to convert all these plans into income paying accounts or annuities.
Every step you take towards and into retirement is important. Look ahead to the opportunities for bettering your financial future. By keeping in mind the many milestone ages of retirement, you can confidently make the right decisions for your family.
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