I was sitting at an all-night diner in Surrey in 1985 with a couple of good friends, (a guy and a girl) waiting for our meal, joking about our broken relationships. The three of us had each recently lost in love.
I was amusing myself with my fork, turning it pokey-side-up on the table and tapping it with the side of my hand trying to make it do a neat flip so I could catch it. My enthusiasm for the trick soon got the better of me, and I decided to try and make the fork do a double, then triple, then quadruple flip. But after the quad, I had reached a turning point in the laws of physics. Smacking the fork with too much vigor, it darted for my face, stabbing me soundly, literally right between the eyes.
As anyone who has ever gotten in a fist fight, had scope-eye, or played a little hockey will know, the face can really bleed. Four neat holes in the middle of my uni-brow began oozing incessantly with blood. Frantically I dabbed the fluid with my white paper napkin, which was soon completely spotted with unsightly red dots - fresh, moist evidence of my silliness.
Right about then the cute waitress showed up, with a curious gaze directed my way. Sometimes there's just no good explanation.
Something much more pleasant caught my eyes at a local restaurant in Prince George the other day. As I waited in the lobby area to be seated, an older couple who had been waiting were taken to their seats by the young hostess. He had white hair, a slouching back, a light coat and good pair of slacks. She had her hair done, was dressed in a comely fashion, and had slipped her arm through his. They had the appearance of a couple who had been lucky in long-term love for many years, and were both clearly looking forward to this little treat together.
As the hostess took them to their seat, the gentleman (and he was truly gentle) put his hand on her back with one arm, and locked arms with her with the other. way they walked, gingerly, but with a spritely shuffle.
It was a beautiful sight, and one which I will hope to emulate in a few years with my sweetheart.
If you are 71 and still hitched, you have made it through some stormy weather together, and deserve a few tax treats too.
The forgotten RRSP contribution
In the year you turn age 71, there is a Dec. 31 deadline to turn your RRSP into a RRIF or choose another RRSP maturity option. Once this deadline passes, you will not be able to make any further contributions to your individual RRSP. If you earn income in 2014 and you also turned age 71 in 2014, you will not be able to contribute to your RRSP in 2015. You will be denied any associated possible tax refund based on an RRSP deduction. Of course the amount of your potential deduction depends on your regular RRSP contribution room.
You may wish to make a final RRSP contribution at the end of the current year. This is called the "forgotten RRSP contribution." You can make your RRSP contribution just before Dec. 31 in the year in which you turn age 71, based on your earned income from that year.
To summarize these issues, if you turn 71 in 2014, you must choose an RRSP maturity option by Dec. 31, 2014. As long as you have earned income in 2014, you can make the forgotten RRSP contribution in December 2014, pay a small penalty tax and claim the RRSP deduction on your 2015 income tax return.
You're 71 or older but have a younger spouse
You must choose an RRSP maturity option (such as a RRIF or annuity) or deregister your RRSPs by the end of the year in which you turn 71 years of age. Even though you can no longer hold an RRSP in your own name after this time, you can make an RRSP contribution to a spousal RRSP in subsequent years as long as you have a younger spouse who is turning 71 years old or less in the year of the contribution.
Even though you are over 71 years of age, you can still make a contribution to a spousal RRSP if you have RRSP contribution room, either through carryforward room or earned income from the year you turned 71 years of age. You can also claim the tax deduction for the contribution when you file your tax return.
Using up your existing RRSP room
If you have accumulated unused RRSP room and have not contributed to your RRSP because you are in a low tax bracket, consider using up your RRSP room by making a contribution in the year you turn 71 years old. This may help you save tax if you expect your income to be higher when you begin receiving RRIF income.
You do not have to deduct the amount you contribute this year. You may want to deduct this contribution in a future year when your income is higher as a result of receiving RRIF payments. You can use RRSP deductions to offset any kind of income including RRIF and pension income.
Mark Ryan is an advisor in Prince George with RBC Wealth Management, Dominion Securities, and can be reached at [email protected].
