Friday, June 1, 2012

Defined benefit pensions

2:33 PM



Question:

1. My spouse, age 59, will retire in June of this year (at age 60) with an unreduced defined benefit pension (Government of Canada). Where does this pension amount go?

2. The pension does not show up in "Income & Cash flow forecast" until age 65. Why not from age 60?

3. Why do RRIF withdrawals show up prior to age 71 when minimum withdrawals is selected?

4. How do I enter the age of entitlement for an unreduced pension?

Answer:

1. If you know the pension amount, enter it as a 'prior defined benefit' pension in 'Company Pensions'.

2. Ensure you select 'company pensions' in 'Sources of Income'. Also, select age 60 for the age of pension commencement.

3. The latest age and minimum will apply only if other funds or income are sufficient to meet the retirement income objective. Otherwise, funds are drawn from a RRIF when they are required.

4. You select the age at which the pension will be paid on the last tab of 'Defined Benefit', and the program will apply the early retirement reduction rule and unreduced pension age rules specified in the 'Early retirement' tab.

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