| ITS CLEO
TUE CLAWBACK AARPRVERS
TIGER ft

FACING A clawback
attack? Fight back with less
taxable income.

You start to lose your age
amount (which turns into a credit
and can save you around $900.
$29.92 once your net income passes
‘$25

You ‘start to lose your old age
security pension and net federal
supplements once.net income
passes $53,215." . 4

“You start to pay back unem- i:
ployment i insurance benefits if
“your net income is more than
$63,570. °:.

Estimate your 1995 figures;
use fast year’s tax return to help
work out your likely net income.

“} "Reader L.H. notes, “we will be
| $26,000 over the clawback limit”

if Ottawa switches to family

income from individual income.

(Note: For 1995, you still base the ”

“:¢ Clawback on individual income.
-, But this year’s budget ‘said the
- government is considering using
amily income as the base — so
the clawback will kick in much
~ sooner for many couples if that
“change becomes !aw.)
°.°,To fight back, L.H. is looking
7 at buying gold and land, and
" putting more nioitey into a princi-

no pal residence. This will reduce

investment income as capital is

= “moved into assets which produce

40 income, yet could go up in

and sense

Instead of suffering the paimof
clawbacks each year, you preserve
your benefits. You take a hit only

‘in the year you sell the gold and

land, assuming you make a profit
~— and realize, of course, there is
no guarantee you will make
money. If you do, then you
declare 75% of the capital gain.

 There’s no tax on profit on a prin-

cipal residence.
If you have been relying on

: your investment income for living

expenses, you will have to replace
that money by drawing on some -
of your savings. Factor that into

: your calculation: cashing a

Canada Savings Bond, for exam-
ple, will further reduce your
investment income. Or generate

‘non-taxable rental income from a

KEDUCE YOLIR
TAXABLE INCOME
AND REDUCE
YOUR CANS ACK

offsetting deductions, as J
described in a recent column.

Another senior — “my hus-
band and I have been married 41
years” — wants to simplify mat-
ters for the children.

“We have pre-paid our funer-
als.” she said. “I updated my will
last year and have made a list of
things the children may wish to
include in a funeral or memorial
service. My daughter has access
to my safe deposit box."

_ Remember also to designate a
power of attorney — somebody to
manage your affairs if you are
alive but no longer competent.

Planning ahead like this —
minimizing tax, improving invest-
ments, planning your estate —
pays off both for you while you
are alive and for your beneficia-
ries after you die. Enhance the
benefits by writing down the steps
you have taken and giving copies
to those involved.

Mike Grenby is a North Shore-

based columnist and independent
financial adviser who works with
individuals; he will answer your
questions in this column as space
allows — write to him c/o 2444
Haywood Avenue, West Vancouver,
B. ¢. V7V 1d.

life messages to increase your ,
obild’s self ssteom: \ - -
+ Uilke rupself 36:

«can think for myself cry!
+ There fs no probiera so graal,

it can’t be solved. 8 Coloroso

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