How does GML estimate the average tax rate payable at retirement?
We calculate the average tax rate payable on the estimated taxable income the client will have at retirement. We will include the projected pension under the employer pension plan (if any), the Canadian/Quebec Pension Plan (CPP/QPP) benefits, the Old Age Security (OAS) benefits, withdrawals from RRSPs as well as investment earnings on non registered assets. In our report, we assess the tax rate based on the retirement income before any transfer between the parties. Of course, we cannot reflect retirement income that we are not aware of (example RRSPs). That’s why we have that specific question on our form Required Information for a Pension Valuation.
