Tax Rules Put Retirees at Risk: C.D. Howe Institute - KAIT-Jonesboro, AR-News, weather, sports

Tax Rules Put Retirees at Risk: C.D. Howe Institute

  • Most Popular StoriesMost Popular StoriesMore>>

  • Region 8 News Investigates: Bacteria in the water

    Region 8 News Investigates: Bacteria in the water

    Friday, July 25 2014 6:26 AM EDT2014-07-25 10:26:48 GMT
    An abundance of lakes and rivers means no shortage of swimmers in Region 8 but not every body of water is one you want to swim in.
    An abundance of lakes and rivers means no shortage of swimmers in Region 8 but not every body of water is one you want to swim in.

  • Central Baptist Church goes 'To-The-Block' to party

    Central Baptist Church goes 'To-The-Block' to party

    Thursday, July 24 2014 11:51 PM EDT2014-07-25 03:51:41 GMT
    JONESBORO, AR (KAIT) - A Region 8 church is taking its message to the streets.Members of Central Baptist Church’s Word Campus hosted a “To-The-Block Party” at Cedar Manor Apartments Thursday evening. The church has hosted a block party in a North Jonesboro neighborhood for three consecutive weeks in an effort to build relationships with each community."Instead of always trying to ask them to come to us we felt like it was important that we just picked up our lives and brought our lives to mee...
    JONESBORO, AR (KAIT) - A Region 8 church is taking its message to the streets.Members of Central Baptist Church’s Word Campus hosted a “To-The-Block Party” at Cedar Manor Apartments Thursday evening. The church has hosted a block party in a North Jonesboro neighborhood for three consecutive weeks in an effort to build relationships with each community."Instead of always trying to ask them to come to us we felt like it was important that we just picked up our lives and brought our lives to mee...
  • Mayor of Caruthersville killed in house fire

    Mayor of Caruthersville killed in house fire

    Thursday, July 24 2014 3:00 PM EDT2014-07-24 19:00:14 GMT
    The mayor of Caruthersville was killed in a fire at his home Wednesday night.
    The mayor of Caruthersville was killed in a fire at his home Wednesday night.

Information contained on this page is provided by an independent third-party content provider. WorldNow and this Station make no warranties or representations in connection therewith. If you have any questions or comments about this page please contact pressreleases@worldnow.com.

SOURCE C.D. Howe Institute

TORONTO, June 4, 2014 /CNW/ - Many retirees face dramatic erosion of their savings due to outdated government rules, says a new C.D. Howe Institute report. In "Outliving Our Savings: Registered Retirement Income Funds Rules Need a Big Update," authors Alexandre Laurin and William Robson urge the government to re-visit its rules requiring mandatory minimum withdrawals from registered retirement income funds (RRIFs) and similar accounts, to protect Canadians from outliving their savings.

"The reality is that Canadians are living in a very different environment than they did in the 1990s when these rules were written," said Robson. "The good news is we're living longer; the bad news is that we're getting low returns on secure income-yielding investments."

Life expectancy at age 71, when holders of all such accounts must start drawing them down, has risen by about 3 years since 1992. Even more dramatic, real yields on a representative portfolio of government of Canada bonds dropped from 5.7 percent in 1992 to a paltry 0.25 percent in 2014.

Since 1992, the Income Tax Act has obliged holders of RRIFs and similar accounts to withdraw annual amounts, dictated by an age-related formula, that rise until holders must withdraw 20 percent each year. But in 1992, the federal government was deficit-ridden and hungry for cash. Now it is close to surplus, and the timing of receipt of those taxes matters less to the government.

To the RRIF holder, however, the minimums pose a threat. They oblige the holder to run tax-deferred assets down rapidly. The average 71-year-old man holding government of Canada bonds faces a 1 in 7 chance of seeing the real value of his tax-deferred assets fall by 90 percent. The average 71-year-old woman faces a 1 in 4 chance of the same alarming decline.

Laurin concludes, "Obviously, the government should make the minimum drawdowns from RRIFs and similar vehicles smaller, or even eliminate them entirely. Reforming the withdrawal rules for RRIFs and similar accounts would help retirees enjoy the post-retirement security they are striving to achieve."

The C. D. Howe Institute is an independent not-for-profit research institute whose mission is to raise living standards by fostering economically sound public policies. It is Canada's trusted source of essential policy intelligence, distinguished by research that is nonpartisan, evidence-based and subject to definitive expert review. It is considered by many to be Canada's most influential think tank.

For the report go to: http://www.cdhowe.org/tax-rules-put-retirees-at-risk/26395

©2012 PR Newswire. All Rights Reserved.

Powered by WorldNow

472 Craighead Co. 766
Jonesboro, AR 72401
(870) 931-8888

FCC Public File
publicfile@kait8.com
(870) 336-1816
EEO Report
Closed Captioning

All content © Copyright 2000 - 2014 Worldnow and KAIT. All Rights Reserved.
For more information on this site, please read our Privacy Policy and Terms of Service.