Most Canadians receive retirement income from many different sources. These include:

• money from the government
• money from a pension plan or retirement savings at work
• savings and investments - registered and unregistered
• extra job income
• property income.

Each of these sources are taxed differently. A dollar in a Registered Retirement Income Fund (RRIF) is not the same as a dollar from a savings account. Learn more

You may be able to reduce the taxes due on your retirement income if you plan ahead. Here are some common questions people have about tax planning when they retire.

1. Can I split my pension with my spouse?

Yes. You may be eligible to split some of your pension income with your spouse or common-law partner. This can reduce the total taxes you will pay.

Income that qualifies: sources that are eligible for the Pension Amount.

Income that does not qualify: OAS and CPP payments.

Learn more now

2. Can earning dividends affect my Old Age Security (OAS) payments?

Yes, due to the way that dividends are taxed. Here is how it works:

1. You must first "gross up" your actual dividends. To do this, you multiply your dividends by 44 per cent.
2. You then claim a dividend tax credit equal to about 18 per cent of the grossed up dividends. You include the grossed up dividends in calculating your net income, not the actual dividends. Note that this "artificially" increases your net income.

This "higher" income may impact the amount of OAS payments you get to keep. OAS is only offered to people within a certain income range. Once your income rises above this limit, you must repay these benefits. This is called an OAS "claw back".

3. I spend a few months in Florida each year. How does this affect my taxes?

Many retired Canadians escape the harsh winters by spending several months in the United States (U.S.) or abroad. But there may be tax consequences. Here are some rules you should know:

• If you spend significant time in the U.S. each year, you might be required to file a U.S. tax return.
• If you sell a U.S. property, say a condominium in Florida, you should file a U.S. tax return to report the sale. This applies to both rental and personal use property.
• If you own substantial U.S. assets and investments at the time you die, U.S. estate tax may apply. Make sure you get expert advice in planning your estate.

Remember: With proper tax planning, you can keep more of your income for retirement. The first step is to learn some basic strategies to reduce tax. Then take advantage of every tax break available to you. You may also want to consult a tax expert to help you plan.