These tax-relief measures are often overlooked and underutilized
With the cost of living increasing and people living longer, retirees have to get creative in order to make their retirement funds go further.
In an interview with BNN, industry expert Pattie Lovett-Reid said senior costs in Canada could range from $1,500 to $7,000 monthly depending on several factors such as retirement location and level of care required. In fact, those over the age of 65 spend more than five times more on health care than people of working age.
However, often overlooked are several tax breaks that can help ease the financial burden on families paying for senior care. One of which is the Home Accessibility Tax Credit.
Lovett-Reid explained that this scheme is useful for those who are planning to renovate a home for someone over the age of 65. Those clients may be eligible to claim a non-refundable tax credit for doing renovations that may reduce the risk of injuries to a senior.
These repairs may include a walk-in tub, light sensors, and railings. Through this tax credit, applicants may be able to claim up to $10,000.
Another option is the Medical Expense Tax Credit. The Canada Revenue Agency offers tax credits to those whose medical expenses go over 3% of their total income.
"Medical expenses can mount quickly and you might be surprised what is covered – supplements, computer enhancements that aid the visually impaired, crutches, service animals even gluten-free products for those with a gluten sensitivity or celiac disease," Lovett-Reid expounded, stressing that the refundable credit is 25% of the total medical expenses.
Lastly, caregivers who have 600 hours of Employee Insurance (EI) insurable hours of work over the past 52 weeks may qualify for the maximum payment of $537 per week from Canada's employment insurance benefits program.
Additionally, there are financial products like annuities that will allow individuals to lock in an income stream that guarantees steady returns for life.
"Annuities allow you to transfer a lump sum of money to an insurance company in return for a monthly stream of income for a fixed period of time or for life," she said.
For more of Wealth Professional's latest industry news, click here.
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In an interview with BNN, industry expert Pattie Lovett-Reid said senior costs in Canada could range from $1,500 to $7,000 monthly depending on several factors such as retirement location and level of care required. In fact, those over the age of 65 spend more than five times more on health care than people of working age.
However, often overlooked are several tax breaks that can help ease the financial burden on families paying for senior care. One of which is the Home Accessibility Tax Credit.
Lovett-Reid explained that this scheme is useful for those who are planning to renovate a home for someone over the age of 65. Those clients may be eligible to claim a non-refundable tax credit for doing renovations that may reduce the risk of injuries to a senior.
These repairs may include a walk-in tub, light sensors, and railings. Through this tax credit, applicants may be able to claim up to $10,000.
Another option is the Medical Expense Tax Credit. The Canada Revenue Agency offers tax credits to those whose medical expenses go over 3% of their total income.
"Medical expenses can mount quickly and you might be surprised what is covered – supplements, computer enhancements that aid the visually impaired, crutches, service animals even gluten-free products for those with a gluten sensitivity or celiac disease," Lovett-Reid expounded, stressing that the refundable credit is 25% of the total medical expenses.
Lastly, caregivers who have 600 hours of Employee Insurance (EI) insurable hours of work over the past 52 weeks may qualify for the maximum payment of $537 per week from Canada's employment insurance benefits program.
Additionally, there are financial products like annuities that will allow individuals to lock in an income stream that guarantees steady returns for life.
"Annuities allow you to transfer a lump sum of money to an insurance company in return for a monthly stream of income for a fixed period of time or for life," she said.
For more of Wealth Professional's latest industry news, click here.
Related stories:
How investors can reap yields from DRIPs
Why Canadians are uncertain about their financial futures
