Many Canadian Retirees Are Facing a Lifetime Tax Bill of Over $1 million

According to the TriDelta Estate 100, their estate value will be $1.9 million.

TORONTO - The results from over 10,000 estate reviews show that for many older Baby Boomers and retirees, they face a tax bill of more than $1 million over the rest of their lives, indicates a study paid for by TriDelta Financial Partners.

Since being launched just over a year ago, the results have shown the following:

Median Estate Value: $1,944,000 (the mid-point of all values)
Median Lifetime Tax Bill: $1,032,000

The main culprit in the high tax numbers is Canadians passing away with large RRSP/RRIF balances. In many cases, Canadians will see 40% to 50% of these assets going to the government instead of their estate.

"Many Canadians don't realize how much of their registered assets will be taxed at death. Fortunately, with proper planning and some unique strategies, often much of this tax can be avoided" said Ted Rechtshaffen, CFP and President of TriDelta Financial Partners.

"The key to minimizing these taxes starts with an effective strategy to time RRSP and RRIF withdrawals, and the new tax free savings accounts will be a big help. Some other strategies are ideal for 2008 because of the low interest rates and high dividend yields that we are seeing" said Rechtshaffen.

Those who are retired or close to retirement should determine how much of an estate they will have - essentially 'will I outlive my money, and if not, how much will be left over?' The other key question that is answered is 'how big will my lifetime tax bill be?'