The New 66.6% Capital Gains Rule
As of June 25, 2024, the Canadian government fundamentally changed how wealth is taxed. For individuals, the capital gains inclusion rate remains 50% for the first $250,000 of capital gains realized annually. However, any capital gains above $250,000 are now subject to a 66.6% inclusion rate.
Why this matters for your retirement:
If you plan to sell a secondary property, a cottage, or liquidate a large non-registered portfolio in a single year to fund your retirement, you could face massive, unexpected tax bills. Tax-loss harvesting and multi-year decumulation strategies are now strictly mandatory for high-net-worth Canadians.
Income Splitting & Spousal RRSPs
Pension Income Splitting
If you are 65 or older, you can allocate up to 50% of your eligible pension income (including RRIF withdrawals) to your lower-income spouse. This can instantly drop your household out of the highest marginal tax bracket and prevent the OAS Clawback.
Spousal RRSPs
Before retirement, the higher-earning spouse contributes to a Spousal RRSP. The higher earner gets the massive tax deduction today, but the lower-earning spouse pays the taxes upon withdrawal in retirement.
The Hidden Drag of 2% Advisor Fees
Many Canadian retirees leave their life savings with traditional bank advisors or "wealth managers" who charge a 2% AUM (Assets Under Management) fee or place them in high-MER mutual funds (like IG Wealth Management or standard big-bank portfolios).
Math Reality Check: If you have $1,000,000, a 2% fee is $20,000 every single year, regardless of whether the market goes up or down. Over a 25-year retirement, compounded, you are surrendering hundreds of thousands of dollars. Moving to a fee-only planner or a DIY ETF decumulation strategy is the highest ROI decision you can make.
The Blueprint
Our $19.99 Toolkit includes the Tax-Shelter Decision Matrix and exact marginal tax bracket modeling. Stop guessing.
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