Personal Finance

Retirement planning question - non-registered stock holding entering retirement

  • Last Updated:
  • Nov 14th, 2018 7:13 pm
[OP]
Newbie
Nov 13, 2010
64 posts
34 upvotes
Vancouver

Retirement planning question - non-registered stock holding entering retirement

I'm hoping one of you guys have the expertise for some advice on this. My parents are both turning 65 next year but my mother, individually, owns US stocks worth $400K (non-registered). What would be the most tax-efficient way to liquidate this position considering they’ll enter their retirement next year and possibly apply for OAS and CPP? Thanks in advance for your time!
Last edited by ruroni30 on Nov 12th, 2018 11:17 am, edited 1 time in total.
5 replies
Deal Expert
Aug 2, 2001
16577 posts
6704 upvotes
CPP would be unaffected by unregistered investments (or registered) because it's not income based. You are entitled to your CPP based on what you contributed - not based on what you make in retirement. OAS clawback does not occur until your income reaches $75K.


So I think there is more information needed. Do your parents want to liquidate the $400K immediately? What is their retirement income? Etc...
[OP]
Newbie
Nov 13, 2010
64 posts
34 upvotes
Vancouver
Thanks TrevorK. They had a small retail shop, which never did well and closed it down last year. Hardly anything in registered savings so they won't have any additional retirement income, so mostly depending on this 400K and the OAS and CPP, and my hope is for GIS as well, if possible. They don't need to liquidate all of it immediately, and the hope is to stretch it out as long as possible to provide consistent amount each year.
Deal Expert
Aug 2, 2001
16577 posts
6704 upvotes
ruroni30 wrote: Thanks TrevorK. They had a small retail shop, which never did well and closed it down last year. Hardly anything in registered savings so they won't have any additional retirement income, so mostly depending on this 400K and the OAS and CPP, and my hope is for GIS as well, if possible. They don't need to liquidate all of it immediately, and the hope is to stretch it out as long as possible to provide consistent amount each year.
How much are you looking at in capital gains right now?

Ideally you want to stay under the limit for GIS (under $18K excluding OAS I think). If you are already above that, then your next idea is to stay under the limit for other social services / marginal tax rates and as you sell the stock pay capital gains and move the money into a TFSA. At least within the TFSA the gains will become tax free.

You will want to talk to Service Canada and get an estimate on your CPP. It might be in your online account, but if not you can call them. This will help answer whether you can get GIS because once that's out the window (or if you're getting pretty much nothing) it might be a good idea to withdraw quicker and put into your TFSA.
Deal Fanatic
User avatar
Jun 26, 2005
9945 posts
1827 upvotes
Toronto
What's the reason they wish to sell the stocks?

They need the cash to live off??
Deal Fanatic
Feb 15, 2006
8679 posts
3139 upvotes
Toronto
rfdrfd wrote: What's the reason they wish to sell the stocks?

They need the cash to live off??
+1
Why the need to liquidate those stocks? Also curious why all the stock holdings are in US.

There's probably a lot more info, and other ownings (house, cottage, business, insurance, etc.) that should be taken together for their retirement planning.

Top