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Questions about GIS handling with partial OAS, etc.

Hi,

For 1) and 2).  Our GIS calculation is now entirely based on our implementation of the Old Age Security Act. The act describes how to compute the amounts for OAS, GIS , Alllowance, and Allowance for survivor, and that's how we do it.  We do need to also use the updated maximum amounts that are indexed every quarter (from https://open.canada.ca/data/en/dataset/ff1e4882-685c-4518-b741-c3cf9bb74c3e). We don't use the government pre-computed GIS tables (which apply only with full OAS pension, and we can reproduce in that case), and we don't make approximations for the clawback. I've clarified the eBook section on OAS/GIS.

With our calculations, indeed the GIS amount and the income threshold is increased for pensioners with partial OAS pensions, the retirehappy blog is entirely correct. The second blogger is also correct in their analysis of the tables, but if they want to derive the calculation, they should read the OAS Act :)

The OAS and GIS/Allowance calculations are made in each year of the TIME MACHINE so they adapt to circumstances and income levels in each year.

3) Yes we implement the QPP supplement, we refer to it as the PRB (Post-Retirement Benefit) for both QPP and CPP (although they are calculated slightly differently).

BTW If your parents are 65 or over and the TIME MACHINE calculates a GIS amount in all years, these runs will not count towards their MoneyReady App free trial.

rental property
Yes that should be done automatically for you. Make sure to select Rental income from the dropdown menu for Select an income source when you add or edit the INCOME. Leave the End date blank. When you click submit, it’ll then ask you for the property to link the income to (it should have been previously entered in REAL ESTATE). Also make sure the property and the income have the same Owner (ie if you have a spouse and the income is joint, the property should also be joint owner). Click Submit again once you selected the property from the drop-down.
The INCOME Type should now be listed as RENTAL. The income will stop when the property is sold in the TIME MACHINE.
Canada.ca new OAS/GIS Calculator

There's a new calculator for OAS and GIS at https://www.canada.ca/en/services/benefits/publicpensions/cpp/old-age-security/payments.html#estimate-benefits.

It's not complete as it wimps out if you don't have a full OAS pension (less than 40 year residency in Canada), but it works well if you do.

I'm excited about it because it's the first time I see any source code (the javascript is right there in the html source of the page) for calculations available for any calculations from the Canadian government. The US social security system has provided full source code for their calculations for many years.

 

 

 

Where to input a potential inheritance
The way you did it should work. Make sure the Contributor selected is “Other”.  You'll only see the total net deposits to the account for that year in the results, so that might not be 80K if you had other withdrawals or deposits to it.
 
You can alternatively add it as an INCOME, type “OTHER”, owner Joint (?), same start and end dates, not taxable. It will get dumped to your Wallet(s) to be sorted out via your AUTOMATIC SAVINGS/WITHDRAWALS and PRIORITIES.
 
Thanks for your kind words, they are much appreciated.
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Looking forward to reading your posts!

 

Your comments and feedback are always appreciated.

Joint expenses

I should have specified taxable income. Here’s the gory details:

1.If we have previous year’s taxable incomes for the spouses (sum of the two is not 0), we use those to determine the proportion, so that deals will all the income splitting/sharing.

2.If that doesn't work we use the current total incomes of each spouse. That’s before the CPP/taxes calculations, so no pension splitting/sharing is considered in that case.

3.If that doesn’t work we use the net worths of each spouse (previous year, sum of the two is not 0).

4.If that doesn’t work we use 50%.

This is re-calculated for every year in the TIME MACHINE.

#1 usually works although #2 is often applied in the current year if a user doesn’t bother to enter last year’s taxable incomes in the TM preflight input screens. 

#3 and #4 rarely happen.

Joint expenses

Yes,

That’s mostly correct. Joint expenses are attributed proportionally to income so not necessarily 50%. But you got the important point that each spouse pays them from their own accounts (and joint accounts when available).

Read Me First

The MoneyReady App was launched in the summer of 2019. Almost 4 years later, after answering many questions, getting great feedback, and having many discussions with users by email, I decided to start this community forum in March 2023 so that everyone can benefit from these discussions.

Because nobody likes an empty forum, meet user anonymous:
This is a fake user created to populate the forum with real questions that were sent by email to the MoneyReady App. Those emails and our responses have been curated to select the most common, interesting, and still relevant today. They have been edited for clarity and to remove any identifying information for privacy and security. Typos are all mine.

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Welcome to the Money Ready Forum. Looking forward to reading your posts!

Now please go read the Rules before proceeding.

 

Marginal tax rate

A new graph for the marginal tax rate has been added to the TIME MACHINE results.

Marginal tax rate

Well that should tell you there are already too many graphs :)

I nevertheless added the MTR graph if it can be helpful.
Marginal tax rate

Hi,

There is a graph of the average tax rate, and it is calculated exactly as you say.
I do have an MTR on income already calculated. Would you like me to add that graph? 
 
Currencies for REVENUES, INCOMES, EXPENSES, and AUTOMATIC SAVINGS

For REVENUES, INCOMES, EXPENSES, and AUTOMATIC SAVINGS/WITHDRAWALS, you can now specify a currency (previously assumed to be CAD). LOANS, ACCOUNTS, and INVESTMENTS already had that feature.

USD/CAD exchange rate model

A model for the USD/CAD exchange rate was added to the Market model for Monte Carlo simulations.

Saving runs

The first interpretation is correct. If you already have 6 runs saved, it’ll ask which of those you want to delete before allowing you to save your last run.

Interpretation 2 would be cruel! 

I’ll try to clarify for the next edition of the eBook.
Thanks
Income splitting

Yes US social security is eligible pension income so it is splittable, at least the 85% of it that is taxable. See the last item in the table here:

Income splitting

The income splitting only splits private pension income, RRIF/LIF(not IRA) withdrawals after 65, and surprisingly, US Social Security (not CPP), but not income not eligible for splitting. However it splits that eligible income in such a way as to make the resulting total taxable income equal (as much as is possible) for each spouse. Additionally, if you’ve entered a date of cohabitation with your spouse in the CPP tab, the program also does CPP sharing (before any income splitting is applied). You can see if there was any CPP transferred in the Warnings column.

What do your reports look like?

Click to download a sample plan pdf file

What securities do you update prices for?

For Canada, we cover listings on the Toronto Stock Exchange (TSX), the Canadian Securities Exchange (CSE) and Aequitas/Neo Exchange. For the USA, we cover listings on the New York Stock Exchange (NYSE), the NYSE American exchange, the Nasdaq, and the OTC. We do not cover warrants or options. We do not cover the Chicago Board Options Exchange (CBOE). We cover most series of Canadian mutual funds, segregated funds, hedge funds, and closed-end funds. This market data is provided by Fundata Canada Inc. and updated nightly.

We update regular currencies nightly from the European Central Bank.

We update Cryptocurrencies nightly and on demand using CoinGecko.

For ACCOUNTS, INVESTMENTS and LOANS linked to Wealthica, values are updated from Wealthica on demand.

How long does it take?

In programming, we have a saying, GIGO: Garbage In, Garbage Out. The Money-Ready App is built to provide you with accurate calculations, which requires accurate and complete data. We make it easy, but it can take some time to gather that data. Depending on how complicated your financial situation is, how detailed you want to be, and the depth of your financial knowledge, plan 15 to 45 minutes before your first TIME MACHINE run. Take your time to do it right and your patience will be rewarded. Financial planning is a skill that requires continuous learning and will last you a lifetime. 

Limitations

We endeavour to have accurate calculations for Canadian taxes, rules, and benefits for all Canadian residents, however we cannot always include everything in the various Federal and Provincial legislations.

We endeavour to cover all financial products available to Canadians, however the complexity of some products cannot always be captured completely.

We point out these deficiencies when we know of them.

We do not and cannot guarantee the accuracy of anything in The Money-Ready App.

We are continually improving The Money-Ready App.

We welcome feedback so please suggest features that are not currently implemented.

We will work on implementing the most popular requests first.