On the Money

DAVID TRAHAIR

Personal Finance Cheat Sheet — 2016

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INCE MY CHEAT SHEET IN 2015 seemed to be quite popular with our readers, here is the updated version of the key numbers related to personal finance for 2016.

RRSP: the limit for 2017 is \$26,010, meaning 2016 earned income of \$144,500 is required to maximize the amount since the limit is 18%.

RRSP LIMIT Year

2017 2016 2015 2014 2013

Limit

\$26,010 \$25,370 \$24,930 \$24,270 \$23,820

Prior year earned income required

\$144,500 \$140,944 \$138,500 \$134,833 \$132,333

Canada Pension Plan: the year’s maximum pensionable earnings (YMPE) for 2016 is \$54,900. The year’s basic exemp- tion (YBE) is \$3,500. At a contribution rate of 4.95%, the maximum CPP contribution is therefore \$2,544.30. For self- employed individuals the contribution rate is 9.9%, so the maximum CPP contribution is \$5,088.60. The maximum CPP retirement pension for 2016 is \$1,092.50 a month or \$13,110 a year. The maximum survivor’s benefit for

KEY CPP FIGURES Year

YMPE YBE

Maximum annual

employee

2016 2015 2014 2013 2012

\$54,900 \$53,600 \$52,500 \$51,100 \$50,100

\$3,500 \$3,500 \$3,500 \$3,500 \$3,500

contribution \$2,544.30 \$2,479.95 \$2,425.50 \$2,356.20 \$2,306.70

Maximum annual

self-employed contribution

\$5,088.60 \$4,959.90 \$4,851

\$4,712.40 \$4,613.40

a survivor 65 and older is 60% of that, or \$7,866 annually. The amount of the death benefit has been fixed at a maximum of \$2,500. In 2016 the reduction for collecting the CPP pension before

age 65 as early as age 60 is 0.6% per month (7.2% a year). The premium for waiting to start aſter age 65 up to age 70 is 0.7% a month (8.4% a year).

Tax-free savings account: the TFSA started in 2009 for Canadian residents aged 18 and older. Under proposed legisla-

TFSA CONTRIBUTION LIMITS Year

2016 2015 2014 2013 2012 2011 2010 2009

Annual limit \$5,500

\$10,000 \$5,500 \$5,500 \$5,000 \$5,000 \$5,000 \$5,000

Cumulative limit \$46,500

\$41,000 \$31,000 \$25,500 \$20,000 \$15,000 \$10,000 \$5,000

tion, starting on January 1, the annual TFSA limit for 2016 will decrease from \$10,000 to \$5,500. The TFSA annual room will be indexed to inflation and rounded to the nearest \$500.

Maximum CPP

retirement pension

\$1,092.50 \$1,065

\$1,038.33 \$1,012.50 \$986.67

Registered education savings plan: contributions to an RESP are not tax deductible but earnings in the plan accumulate on a tax- deferred basis. When the funds are paid out to fund a child’s education, the accumulated income earned in the plan is taxed in the child’s hands at his or her lower tax rate. Since 2007 there has been no

annual contribution limit but the total lifetime ceiling is \$50,000 per beneficiary. RESPs are oſten set up as family plans so you can allocate the plan assets among related

52 | CPA MAGAZINE | JUNE/JULY 2016

Photo: Jaime Hogge

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