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ast Thursday's federal budget changed the rules for Old Age Security (OAS). In addition to increasing the eligibility age to 67, the program is also more flexible. OAS is the single largest federal program and is funded from current year government revenues. Workers do not contribute to their OAS pension the same way they do to the Canadian Pension Plan (CPP). It is the government's hope that by delaying the age we are entitled to start collecting OAS, the program will remain strong for future generations. The most attractive feature for many will be the option to delay the start of OAS payments by up to five years. This deferral option starts in 2013. This is similar to the CPP and in both cases as you delay receiving payments, the amount you collect increases. Retirement planning just became more flexible. Many Canadians will want to work past age 65 because they are able to continue their career and enjoy their job. Others might have to continue to work for financial reasons. If you choose to receive OAS while working, your OAS will be taxed at the same rate as employment income. If you defer the OAS start date until after you have stopped working, you will collect a higher amount. This may potentially put you in a lower tax bracket and allow you to keep more of the OAS after taxes. The best aspects of the new rules are that they address retirement planning risks. One risk is that continued inflation will erode a retiree's purchasing power because over time, the cumulative effect of inflation can make your purchases significantly more expensive. OAS payments are currently indexed `Retirement planning just became more flexible' 15 · Thursday, April 5, 2012 OAKVILLE BEAVER · www.insideHALTON.com L start of collecting OAS, those higher payouts that are indexed with inflation will be larger in later years when you potentially need the income the most. Our recommendation is that after the age of 60, By Peter Watson you carefully plan your OAS strategy and incorporate other issues like the and the amount of OAS will rise timing to start receiving CPP with inflation -- that is an and how best to start withdrawattractive feature. ing funds from your RRSP. The second risk is that life There are many things to expectancy is increasing, so consider and the new flexibility there is a longer period during to OAS just gives you one more which you can run out of funds. tool to use to your advantage. The longer you live, the greater -- Submitted by Peter your risk of depleting your Watson, MBA, CFP, R.F.P., CIM, resources. FCSI. If you are able to defer the Dollars & Sense 1500 Sixth Line (Just South of Upper Middle Rd.) 905-844-9209 ART'S FISH & CHIPS wish our customers and remind you that we will be OPEN on Good Friday, 12 Noon to 7pm Liz, Nick & Staff at a Happy & Healthy Easter Come early and avoid the 5 pm rush. We will be serving whole orders of Halibut and Haddock Fish & Chips only with a limited menu of side orders and will not take any phone-in orders for pick-up after 5 p.m. THANK YOU FOR YOUR PATRONAGE! NOW OR NEVER Purchase a Carrier Hi Efficiency Furnace and Receive a DON'T MISS OUT! LIMITED TIME OFFER! FREE CARRIER High Efficiency CENTRAL AIR absolutely free! er Carri Free ficiency Ef High ral Air Cent (Installation Extra) OVER 120,000 UP TO $650 IN HYDRO REBATE Reserve now and you will receive a central air This is a great opportunity to replace your old SATISFIED CUSTOMERS inefficient furnace and air conditioner with hi-efficiency and greatly reduce your utility bill. LIMITED Call today to book an appointment with our LIMITED TIME OFFER. QUANTI Professional Home Comfort Advisors. AVAILABLE. TIES PLUS: NO PAYMENT NO INTEREST FOR 6 MONTHS O.A.C. THE FORECAST CALLS FOR *Call Dealer for Details 905-849-4998 9 Locations To Serve You Better! www.aireone.com 1-888-827-2665 A+ Rating