Fall Tax Planning for Retirees in 2026
Why fall tax planning matters for Canadian retirees, fall can be an important time for Canadian retirees to take a closer look at their tax situation, retirement income, investments and CRA information before the year comes to a close.
In Episode 89 of the Retiring Canada podcast, the team explores several areas that can have an impact on year-end planning including RRIF withdrawals, unused capital losses, TFSA contribution room, tax payments and investment account consolidation.
Every household is different, which means there is no single tax strategy that works for every retiree. Effective planning often involves looking at the bigger picture and coordinating:
Retirement income
RRIF withdrawals
Taxable investment accounts
Capital gains and losses
TFSA contribution history
Tax instalments and prior-year balances
Portfolio structure
Estate and cash-flow planning
The goal is to ensure that tax planning, retirement-income planning, and investment management are working together rather than being handled separately.
Start With Your Current CRA Information
One of the first steps in fall tax planning for retirees is reviewing the information available through the Canada Revenue Agency (CRA).
With authorized access, the Fundamental Wealth team can review information such as contribution room, instalments payments, notices of assessment, tax slips, and reassessments. Having access to this information can help uncover items that may otherwise be overlooked.
A CRA review can reveal both planning opportunities and issues that need to be addressed.
Look for Unused Capital Losses
Unused capital losses are one example of information that can have a significant impact on future planning.
A capital loss can occur when an investment in a taxable, non-registered account is sold for less than its adjusted cost base. Depending on the circumstances, capital losses may be available to offset capital gains, making it important to know whether losses from previous years are still available.
In one example discussed in the episode, a household had a capital loss of nearly $30,000 that had not previously been used. The loss was considered as part of a taxable account rebalancing strategy carried out over multiple tax years.
The lesson is simple: your past tax information can be an important part of your current financial plan.
A transaction that happened years ago may still influence today's planning opportunities.
Check for TFSA Overcontributions
TFSA contribution room is another area worth reviewing.
The Fundamental Wealth team has encountered situations where clients had made TFSA overcontributions without realizing it. Reviewing current CRA information can help identify a discrepancy and provide an opportunity to address it.
It is important to compare the contribution-room information available through the CRA with your own records of TFSA contributions and withdrawals. If there is uncertainty about your available room or a potential overcontribution, consider getting guidance from a qualified professional before making another contribution.
Make Sure Tax Payments Were Applied Correctly
Tax payments can also create unexpected issues.
Episode 89 highlights situations where a payment intended to cover a prior-year tax balance was instead applied as an instalment toward the current year's taxes. The Fundamental Wealth team identified three such situations while reviewing client information and helped the affected clients understand what had happened and what steps were needed to address it.
When making a tax payment, it is important to ensure that the payment is clearly designated for the appropriate year and type of balance.
These may seem like small administrative details, but they can become much more significant if they go unnoticed.
Should You Take RRIF Withdrawals Monthly or Annually?
Another important year-end tax-planning question for retirees is when to take RRIF withdrawals.
Should you withdraw money monthly throughout the year, or wait and take a larger withdrawal toward the end of the year?
The answer is: it depends on your overall financial plan.
For retirees who rely on RRIF income to cover regular living expenses, monthly withdrawals may make sense. Regular withdrawals can provide predictable cash flow and may fit naturally into a household's monthly budget.
For someone who has other sources of cash flow, such as a non-registered investment account, there may be situations where taking the required RRIF withdrawal later in the year fits better with the overall strategy.
Waiting until later in the year can potentially allow more of the RRIF to remain invested during the year and may also defer the related tax withholding. However, this approach comes with its own considerations, including investment performance, cash-flow needs, and market conditions.
The right approach depends on factors such as:
Cash-flow requirements
Account structure
Portfolio construction
Taxable income
Required RRIF withdrawals
Tax withholding
Market conditions
Your overall retirement plan
The important point is that RRIF withdrawals should not be viewed simply as an annual requirement. When and how you withdraw retirement income can be an important part of your broader tax and investment strategy.
Your Investment and Tax Strategy Should Work Together
Tax planning and investment planning are closely connected, particularly during retirement.
A withdrawal can affect your taxable income, portfolio liquidity, asset allocation, and the amount of money that remains invested. At the same time, an investment decision can create a capital gain or loss that affects your tax position.
For example, some retirees may use taxable, non-registered investment to fund their regular cash-flow needs while coordinating RRIF withdrawals toward the end of the year.
The situation can become even more complex for business owners with corporate investment accounts, particularly when the corporation's fiscal year-end does not fall on December 31.
This is why it can be helpful to look at the entire financial picture rather than making decisions one account at a time.
Your income needs, account types, investment choices, and tax strategy should all work toward the same retirement goals.
What Happens When You Have Multiple Advisors or Self-Managed Accounts?
Another issue that can make retirement planning more complicated is having investments spread across multiple advisory firms or maintaining self-managed accounts alongside professionally managed accounts.
There are many reasons someone might choose this approach. You may have a long-standing relationship with another advisor, enjoying managing part of your portfolio yourself, or simply feel that having assets in different places provides additional diversification.
However, having investments spread across multiple institutions can make it more difficult for any one advisor to see the complete picture.
Coordinated Tax Planning
When investments are held in different places, each advisor may only see a portion of your financial picture.
A central advisor with a complete view of the household's investment can consider gains, losses, investment income, asset location, withdrawals, and tax withholding together.
A More Unified Retirement Strategy
Consolidating accounts can make it easier to assess your total retirement assets, diversification, liquidity, and overall risk exposure.
Rather than evaluating each account independently, the portfolio can be considered as a whole.
Potential Fee Efficiencies
Advisory fees can vary depending on the amount of assets being managed and the fee structure of each firm. Splitting assets between multiple firms may result in a different overall cost than managing them through one firm.
That doesn't mean consolidation will always reduce fees. The actual impact depends on the firms, accounts, services, and fee arrangements involved.
Simpler Administration
There is also an administrative benefit to having fewer institutions and accounts to keep track of.
As retirement progresses, simplifying your financial affairs can make things easier for you, your spouse, and eventually your estate or executor.
Consolidation isn't automatically the right answer for every household. The more important question is whether your current structure allows your financial professionals to coordinate effectively and see the complete picture.
A Fall Tax-Planning Checklist for Retirees
As the year draws to a close, consider discussing the following items with your financial advisor and accountant:
Review your CRA information
Check for current notices of assessment, reassessments, instalments, tax slips, and contribution-room information.
Check for unused capital losses
Determine whether losses from previous years may be available and whether they could play a role in current investment decisions.
Confirm previous tax payments
Make sure payments were applied to the correct balance and tax year.
Review your TFSA contributions
Compare CRA information with your own records of contributions and withdrawals.
Review your RRIF withdrawals
Consider whether monthly or year-end withdrawals better for your cash-flow needs, investment strategy, and tax situation.
Coordinate your taxable and registered accounts
Look at your accounts together rather than making withdrawal and invest
Review outside accounts
If you have multiple advisors or self-managed investments, consider whether the current structure makes comprehensive planning more difficult.
Think about your estate
Consider whether your spouse or executor would be able to easily identify and manage your various accounts and financial institutions.
Fall can be a valuable opportunity to address these items before year-end, when there may still be time to make appropriate adjustments.
Continue Your Retirement Tax - Planning Education
Fall tax planning for retirees is about more than simply preparing for the tax bill that may arrive next spring. It is an opportunity to step back, review the entire financial picture, and make sure your retirement income, investments, and tax strategy are working together.
For more on retirement tax planning, Listen to Episode 77, "The Canadian Retirement Tax Trap" for a deeper look at lifetime tax planning. You can also listen to Episode 38, "Year-End Tax Planning for Retirees," for additional year-end planning considerations.
Explore additional retirement-planning resources at retiringcanada.ca
and visit fundamentalwealth.ca to learn more about retirement planning and investment management.
All comments are of a general nature and should not be relied upon as individual advice. The views and opinions expressed in this commentary may not necessarily reflect those of Harbourfront Wealth Management. While every attempt is made to ensure accuracy, facts and figures are not guaranteed, the content is not intended to be a substitute for professional investing or tax advice. Please seek advice from your accountant regarding anything raised in the content of the podcast regarding your Individual tax situation. Always seek the advice of your financial advisor or other qualified financial service provider with any questions you may have regarding your investment planning.