calling for changes to RRIF rules since April<\/a>.<\/p>\nAt that time, it urged all federal parties in the lead-up to the federal election to consider raising the age at which Canadians must convert their RRSP into a RRIF from 71 to 73, and eliminating mandatory withdrawals for those with $200,000 or less in their RRIFs, which it noted is roughly 75% of all RRIF account holders.<\/p>\n
Mark Carney said that if elected, his Liberal government would reduce the minimum RRIF withdrawal amount by 25% and increase the Guaranteed Income Supplement (GIS) by 5% for one year.<\/p>\n
Bragg said those measures don\u2019t go far enough.<\/p>\n
\u201cWhat we\u2019ve proposed is going to be a lot more efficient administratively, more impactful, and still, really, economically in the big picture, not detrimental to government finances in the long term,\u201d he said. Taxes are just deferred, not unpaid, he added.<\/p>\n
\u201cDepending on your economic assumptions, they might actually be larger in the long run,\u201d Bragg said, because savings would be accumulated tax-free for a longer period of time.<\/p>\n
Bragg noted that the federal government offered temporary RRIF relief in 2008, during the global financial crisis, and in 2020, at the start of the Covid pandemic. SIMA is calling for the permanent elimination of mandatory RRIF withdrawals to match current demographic and economic realities.<\/p>\n
This would also help retirees avoid selling investments during market downturns to meet minimum withdrawal rules, he said.<\/p>\n
\u201cBroadly, it is about giving seniors more flexibility,\u201d Bragg said, noting that seniors in Canada today are living longer, working later and face steep living costs.<\/p>\n
Eliminating \u2018regressive\u2019 taxes<\/p>\n
Another key recommendation is to eliminate GST\/HST on investment fund management fees.<\/p>\n
Canadians who invest in mutual funds or ETFs currently pay sales tax on the funds\u2019 management fees, but GST\/HST doesn\u2019t apply to individual stock or bond holdings, which are more common among high-net-worth investors, the report highlighted.<\/p>\n
Investors paid roughly $2.9 billion in GST\/HST on investment fund holdings in 2023 alone, Bragg noted.<\/p>\n
\u201cWhen you consider that mutual funds and ETFs are really the investment choice of middle-income Canadians, it really does seem like a regressive tax,\u201d he said.<\/p>\n
\u201cIt\u2019s about making the tax system more fair, but also \u2026 facilitating Canadians to have greater investment returns.\u201d<\/p>\n
Expanding access to financial advice<\/p>\n
SIMA is also calling for expanded access to financial advice in Canada.<\/p>\n
It specifically suggests that policymakers should support personalized hybrid (human and digital) advice models; modernize guidance to clarify what forms of guidance and advice are allowed, including for self-directed investors; and encourage the development of scalable advice platforms for middle-income savers.<\/p>\n
As the report noted, many studies have shown that individuals who receive financial advice \u201caccumulate significantly more wealth over time.\u201d<\/p>\n
Investors with private savings \u201care distinct in that they often benefit from access to financial advice,\u201d it added.<\/p>\n
\u201cThis is in contrast to public pensions and employer-sponsored plans, where personalized financial advice is not always provided or readily available. As such, private savings can offer a unique advantage when paired with tailored advice that supports informed, long-term financial decision-making,\u201d the report said.<\/p>\n
Boosting savings<\/p>\n
Further, the report recommends enabling automatic enrolment in workplace group RRSPs and DC plans, and integrating private savings into the national financial literacy agenda.<\/p>\n
Auto-enrolment would allow more Canadians to take advantage of workplace retirement programs that are provided, Bragg said.<\/p>\n
\u201cAuto-enrolment, certainly with the opportunity to opt out if it\u2019s not meeting their objectives or financial needs because of debt or whatever else, that would enhance people\u2019s retirement security and make sure there\u2019s no money left on the table,\u201d he said.<\/p>\n
In terms of financial literacy, the report noted that RRSPs, TFSAs and other private savings tools are \u201coften underrepresented in financial education programs,\u201d and therefore, Canadians would benefit from more information about these tools in school curricula and adult learning programs, as well as from tailored content for low-income households, newcomers, gig workers and youth.<\/p>\n
Asked about Canadians who are unable to set money aside in private retirement savings, Bragg said SIMA acknowledges that the proposed reforms would not solve all economic barriers to private savings but they would boost savings for some.<\/p>\n
\u201cWe certainly recognize that affordability is a barrier for individuals to save and invest. And the policy proposals we\u2019ve put forward aren\u2019t going to address all the economic issues around stagnant wage growth, or persistent inflation, the cost of food, the issue with housing affordability,\u201d he said.<\/p>\n
\u201cBut we do think they would significantly help a large percentage of Canadians \u2026 save more.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Specifically, it advocates for raising the age at which Canadians must convert their RRSPs into a RRIF; allowing…\n","protected":false},"author":2,"featured_media":102206,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[45,49,48,133,131,132],"class_list":["post-102205","post","type-post","status-publish","format-standard","has-post-thumbnail","category-personal-finance","tag-business","tag-ca","tag-canada","tag-finance","tag-personal-finance","tag-personalfinance"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/102205","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=102205"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/102205\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/102206"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=102205"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=102205"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=102205"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}