Getting a golden handshake
Question – I am 60 years old and about to get a golden handshake with an envelope containing approximately $150,000. My RRSP is has no room for contributions. I don’t require the money right now as my husband is still working.
What is the best way to handle this money without being hit with a tax bill? – A.G.
Gordon’s answer: You are allowed a tax-free rollover into your RRSP for all years of service up to and including 1995. The formula is $2,000 per qualifying year or part-year.
In addition, you can roll over $1,500 for each year prior to 1989 that you were with the company and did not belong to a pension plan. If you are a long service employee, this should help to shelter a significant amount of the retiring allowance from tax.
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