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21 Cards in this Set
- Front
- Back
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What are the steps to calculate RRSP contribution room? |
1. Calculate your earn income from previous taxation year. 2. Multiply your earned income by 18% to get your personal limit. This is the amount subject to a yearly maximum. 3. deduct PA amount from the previous taxation year. Deduct PPA amount from the current taxation year. 4. Add any unused contribution room from previous years. |
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What are the tax implication if RRSP plan holder dies and the beneficiary named was their spouse? |
The surviving spouse has the following options: 1. Take the full amount into an income and pay the tax on the amount. 2. transfer the funds into her own RSP and only pay tax when the funds are eventually withdrawn |
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What does it mean for a annuity to be non-commutable? |
Does not allow for future payments to be charged from what the annuitant has chosen so if the payments were set to be as monthly, they cannot be changed to a lump sum payment |
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What is the difference between committable and non-committable annuity? |
Non-commutable: Does not allow for future payments to be changed from what the Internet has chosen so if the payments were set to be as monthly, they cannot be changed to lump sum payment Commutable: At any point of the time that annuity holder can cancel agreement with any unpaid amount paid out as lump sum -amount paid out as lump sum is determined by performing a present value calculation of future payments |
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What is structured settlement annuity? |
A structured settlement annuity often purchased when an injured or wrong party is awarded a settlement that is to be paid overtime |
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What happens to RSP at age 71? |
1. Can we take out cash and pay taxes? 2 withdraw, and buy an annuity with the payment 3. Converted into a RRIF |
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When an employee who was a part of group RSP retires, what are his or her options with the funds? |
I like a pension, there are no guarantees of a specific benefit or income in retirement with the group RSP. Essentially whatever value of our RSP has grown to will be used to fund an individual retirement. This means that two employees who made the exact same contributions could have vastly different retirement. |
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What are qualified investments for RRSP? |
1 GIC and term deposit 2 bonds 3 mutual fund 4 segregated funds 5 securities listed on designated exchange, except futures 6 Gold and silver, bullion, coins, and certificates 7 mortgages |
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Nonqualified investments for RRSP |
1. Precious jewels, gems, and stones. 2. Real estate. 3. Personal property, such as antiques arts, etc.. 4. Commodity contracts. |
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What is the term for RRSP over contribution? |
Cumulative excess amount |
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How does a prescribed annuity differ from non-prescribed annuity in terms of taxation? |
-A non-prescribed annuity is taxed higher in the beginning and lower at the end due to producing ballots -A prescribed annuity is taxed at the same rate because that income is spread throughout |
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Define straight life annuity |
This type of annuity pays until the life annuitant dies |
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Define straight life annuity |
This type of annuity pays until the life annuitant dies |
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Define life annuity with guarantee term |
This annuity pay income until the annuitant dies, or until the end of guaranteed term whichever period is longer |
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Define life annuity, cash refund |
This annuity pays for life, but if the annuitant dies before he has received his initial premium back, the difference is paid out to beneficiaries as a lump sum |
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Define life annuity, cash refund |
This annuity pays for life, but if the annuitant dies before he has received his initial premium back, the difference is paid out to beneficiaries as a lump sum |
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Life annuity with guaranteed term |
This annuity will pay an income until the annuitant or until the end of the guaranteed term whichever period is longer |
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Define life annuity, cash refund |
This annuity pays for life, but if the annuitant dies before he has received his initial premium back, the difference is paid out to beneficiaries as a lump sum |
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Life annuity with guaranteed term |
This annuity will pay an income until the annuitant or until the end of the guaranteed term whichever period is longer |
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Installment refund life annuity |
This annuity pays for life, but if the annuitant dies Before he has received his initial premium back, the annuity will continue paying an income to the beneficiary until the initial premium premium has been refunded |
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Participating annuity |
What the regular annuity, the insurance must estimate what they think. The interest rates will be in future and, to safeguard themselves, must be somewhat conservative. With a particular annuity, the annuity holder will receive extra income, if the interest rate turns out to be higher than forecasted. |
