Taxes are just something we have to pay and that's the end of it.  That said, who pays, and how much, can be up for interpretation depending on your personal situation.  For example, there are a lot more opportunities for tax savings for married couples than for single people. Especially in retirement. 

Elizabeth Brown, Director of Single Seniors for Tax Fairness, says while the tax system technically applies the same rules to everyone, couples have the advantage of pension income splitting, allowing them to shift up to 50% of pension income to the lower-earning spouse. This can reduce their overall tax bill and help them hang onto more of their Old Age Security (OAS) benefits by staying under the clawback threshold. Singles on the other hand, have no such option. Brown says they can be left paying anywhere from two to five times more tax on the same income.
 

When it comes to tax credits, she says couples more tax six credits too and if one member of a couple doesn’t use all their credits, the other can potentially claim them. Singles? No such luck.

Even inheritance rules seem stacked against singles. When a senior with a spouse passes away, their RRSP or RRIF assets transfer tax-free. But if a single senior dies, their remaining retirement savings can be taxed at rates as high as 50%.

Brown’s organization is pushing for change, but she makes it clear that Single Seniors for Tax Fairness is not trying to take anything away from couples instead trying to level the playing field for single seniors.  Brown wants new tax credits and exemptions to allow seniors some of the same tax-saving benefits couples enjoy.  They are advocating for a new tax credit for single seniors including increased OAS clawback thresholds, and fairer rules around retirement asset transfers. While they’ve made progress meeting with over 140 MPs, and seeing their recommendations included in a federal finance committee report, Brown says the government has yet to take action.

As Dave Popowich says, even if you’re part of a couple today, odds are 50% of us will eventually be single and so the current system could have a massive impact on your quality of life in retirement.   You need to have a tax strategy in your retirement.  That's where PKAG can help.  Contact us today or come to one of our exclusive in-person retirement seminars by clicking here. 
 

To learn more about the issue visit Single Seniors for Tax Fairness.