Income Splitting

Many forms of retirement income can be split between spouses, resulting in a reduction in income taxes. Enter the assumed level of income splitting your clients can attain. You can alter this value in the future to view different outcomes.

Some sources of income, such as government benefits, will be split automatically independent of this value. Generally speaking, it would be very difficult to achieve 100% income splitting without proper planning started years in advance of retirement.

Income Splitting is entered as a global value within RazorPlan and will affect all years of retirement. The percentage entered will define the portion of interest income, RRSP/RRIF income, Locked-In Plan income and corporate dividends that will be split equal between spouses.

*The Income Splitting percentage entered will determine what portion of both spouse’s income will be split equally with the other spouse. If 80% is entered, each spouse will receive 40% of the other spouse’s income (80% / 2 = 40% Client and 40% Spouse/Partner). The remaining 60% will be retained by the original spouse and taxed in their hands.