Now that the pension income credit has increased from $1,000 to $2,000 per year, it makes even more sense to assure that you earn income eligible for this credit. If you are not earning income from a normal pension, you can “create” pension income by using some of your RRSP funds to purchase an annuity that pays at least $2,000 per year. Alternatively, you can convert some or all of your RRSP into a Registered Retirement Income Fund (RRIF) to create at least $2,000 per year in eligible income. You must be 65 or over to claim the credit, but doing so has the potential to save a BC taxpayer up to $426 per year in taxes.

Please contact your accountant at Harvey, Lister & Webb Incorporated to discuss the possibilities.

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