Canadian wants retire (65, maybe $47,000. tax-free income
As you can imagine, the government's rules aren't going to let just any Tom, Dick, Mary, Jane or Harry manage to make $47,000. tax-free income: this is another of Mr. Harper's increased benefits for his wealthy friends.
There are, as you would expect, some major provisos:
1. The "taxpayer" must have substantial reasonably liquid, i.e. investable, assets,
2. The "taxpayer" must have only one kind of income, and
3. The "taxpayer" can't work ... well, s/hecan work, if s/he feels the need to pay his/her way in the world - but can't take pay for it!
Up until 2005, the tax-free amount of this kind of income was about $28,000 - 30,000.
Then, as of 2006, they changed the method of calculation of tax liability on this kind of income, with the result that if one had no other income than this kind, the point at which one had to begin to pay income tax on such income was increased to $46,345. and it will have increased some since - I heard that it's now about $50,000., but am not sure if it's that high, yet.
If one could arrange to develop this kind of income, as of, say age 60 (or even 45), and if one had built up pension credits, which would increase if one did not elect to begin to collect benefits until age 65, and one felt that one could live on $47,000. (with no income tax liability), one could consider taking retirement now and postponing collecting benefits till 65 (when Old Age Security begins).
Plus not applying to collect Canada Pension Plan benefits till then, as well, if one chose, as there's a penalty of 1% of one's benefit for every 2 mos. that one applies before age 65, down to 30% reduction if one chooses to begin collecting at one's earliest opportunity at age 60. However, if one began to collect Canada Pension prior to age 65, that would be another kind of income, and it would reduce the income tax-free break point quite substantially below the $47,000. level.
This system will be helpful to reduce the income tax load of people with other kinds of income, as well - but they don't have anything like this level of tax-free income.
Recently I wrote another thread largely devoted to this issue, but with a much different title, with further information.
Good wishes for increasingly skillful use of your income and assets.
Here is a link that might be useful: Canadians: $47,000. tax-free dividend income