There are certain things in life most of us take for granted. When one of things suddenly changes or is taken from us, our world is turned on its head. Not so long ago I developed allergies to certain foods that until then were a staple of what I considered a reasonably healthy diet. During a lengthy assessment period that followed I was forced to restrict my diet to a short list of rather dreary, tasteless items that had me questioning the very meaning of existence. OK maybe those are 1st World problems but it was pretty intense at the time and it happened to coincide with a cluster of birthday parties. Watching my two boys messily devour a sumptuous chocolate cake, feeling deeply sorry for myself and salivating on the edge of sanity, I thought about Taxes…. What?
Before I explain let me tell you about my wife, Nicci. She is a cake connoisseur and loves to share the cake for days on end with friends over tea and chats. More than anything though she loves to sit peacefully by herself and snuffle a large piece while reading a book and sipping her tea. Secretly I know she wants to have all the cake to herself but being the amazing mom that she is, when the kids beg, she sacrifices most of it to the hungry open mouths below, satisfying herself with one or two slices. Often she says to me, “I wish I could eat the entire cake but still give some to the kids”. So it turns out that cake, like your RRSP’s has certain inherent limitations. The moment you cut your first slice, not only does the cake shrink it also begins to perish, much like the taxes you incur when you draw retirement income.
Being the supportive husband that I am I put some serious thought to this huge dilemma and I began to contemplate a magical 10 slice cake. A cake that my wife could bake and then hide away and enjoy a fresh slice each day for the next 10 days, even having a friend over and offering them a slice or two. Once the cake craving had passed she would call the kids and miraculously present them with a fully replenished cake so that they could devour to their heart’s content. She could in fact eat her cake and have it!
Tax Free Pension
Nicci in a very happy moment
Of course in the culinary realm no such cake exists so my wife’s dilemma and relative suffering continues. When it comes to Legacy Planning however, the elusive “Magic Cake” most certainly does exist and if you bake it you can transform your retirement savings so that:
- There is tax free growth
- You can access them incurring virtually no income tax
- Your assets are preserved for the next generation
Sound to good to be true? Email now and ask me how….