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T is for tax-efficient


Looking for higher income in our low-interest environment? This type of investment income solution, available through our team, offers strong, steady cash flow and tax deferral along with the potential for capital preservation, growth and inflation protection.

The solution is known as T-Series (T stands for tax and implies tax-efficient) and it's designed for retirees and other Canadians seeking extra income from their non-registered investments.

How it works
The T-Series is offered on a range of portfolio types, from diversified income to balanced to equity. The right one for you depends on your personal objectives, risk tolerance and time horizon. A T-Series investment is structured to pay out a stable level of income on a monthly, quarterly or annual basis. You may even be able to choose a targeted return; e.g., 5% or 8%.

Most of the payment is characterized as a return of capital and is therefore not taxed (similar to the principal you get back on a matured bond or GIC). As a result, the payments you receive are initially subject to little or no tax. As well, because it is considered a return of capital, the payment has no impact on income-tested government benefits like Old Age Security - no clawback is triggered.

Extra income when you need it
The low taxation created through tax deferral doesn't go on forever, however. Over time, the adjusted cost base of your investment decreases, until it reaches zero, at which point the distributions begin to be taxed.

But, in the early years - when you may need more cash flow to support the active stage of retirement - you get higher cash flow. And, if your investment earns the same or more than the distributions, you can preserve or even grow your capital and potentially offset the impact of inflation.

T is not only for tax-efficient but also for terrific - a terrific opportunity to produce a steady stream of tax-advantaged income. Give us a call for a review of how a T-Series solution might fit into your retirement income strategy, or to learn more about how it can boost your after-tax income.

 

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