Technology: TFSA 101: 3 Dividend Stocks for Retirees Who Want to Avoid OAS Clawbacks - - PressFrom - Canada
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Technology TFSA 101: 3 Dividend Stocks for Retirees Who Want to Avoid OAS Clawbacks

10:17  14 november  2019
10:17  14 november  2019 Source:   fool.com

3 traps to avoid in your TFSA

  3 traps to avoid in your TFSA Take a look at the TFSA traps you should avoid and a high-quality stock you should not sell out of such as Brookfield Asset Management Inc. (TSX:BAM.A)(NYSE:BAM).Of course, reaping all the benefits of TFSAs is not as easy as it might seem. People make all kinds of mistakes with their TFSAs, which can make it difficult for them to make the most of the account. Canadians make common errors that result in them having to pay penalties, incur unnecessary taxes, or miss out on great opportunities to grow their wealth.

Here's how holding top dividend stocks such as Toronto-Dominion Bank (TSX:TD) (NYSE:TD) inside a TFSA can boost income without putting your OAS at risk.

Here's how owning top dividend stocks such as TC Energy (TSX:TRP) inside a TFSA can help retirees put more money in their pockets without putting their OAS payments at risk. The minimum threshold might seem like a high amount, but retirees who receive a generous Want to Retire Early?

a close up of a bag: Various Canadian dollars in gray pants pocket© Provided by The Motley Fool, Inc Various Canadian dollars in gray pants pocket

Canadian pensioners are searching for ways to squeeze more earnings out of their savings without putting their Old Age Security payments at risk.

The government adds up your total net world income when deciding whether to impose an OAS clawback. The threshold for the 2019 income year is $77,580.

Any taxable income earned above that level will trigger a pension recovery tax equal to 15% of the amount earned above the limit. The clawback effectively wipes out the OAS once your income goes above $126,058.

The limit might seem like a lot of money, but it doesn’t take long to hit the threshold if a person receives a decent company pension, CPP, OAS and other income such as RRSP withdrawals or RRIF payments.

Don’t Make These 3 Massive TFSA Mistakes!

  Don’t Make These 3 Massive TFSA Mistakes! Investing a large portion of your TFSA in risky stocks like CannTrust Holdings Inc. (TSX:TRST)(NYSE:CTST) is a massive mistake.Many Canadians have a TFSA, but unfortunately, not all of them use it wisely. If you don’t pay attention, you can make mistakes without even realizing it. I’m sharing with you three massive mistakes that Canadians are making in their TFSAs, so you can avoid them and maximize your TFSA’s potential.

Here's how holding top dividend stocks such as Toronto-Dominion Bank (TSX:TD) (NYSE:TD) inside a TFSA can boost income without putting your OAS at risk. For the 2019 tax year, any person with net world income of more than ,580 will be subject to an OAS pension recovery tax of 15% on every

Here's how owning top dividend stocks such as TC Energy (TSX:TRP) inside a Pensioners who are collecting Old Age Security are searching for ways to boost their retirement income without putting their OAS payments at risk. But you will want to hurry – this free report is available for a brief time only.

One way to avoid the OAS clawback is to generate income from TFSA holdings. The government allows interest, dividends, and capital gains to be accrued tax-free inside the TFSA, and any funds taken out of the account are not considered when the net world income is calculated.

Let’s take a look at three reliable dividend stocks that might be interesting TFSA picks.

BCE

BCE has been a favourite holding among retirees for decades and that trend is likely to continue.

The company doesn’t shoot the lights out on the growth side, but delivers a slow and steady increase in profits and is able to support decent dividend growth through rising free cash flow.

BCE has a wide moat that it takes care to protect. Investing billions of dollars to bring fibre-optic connections right to the door of its customers is one way BCE can control the physical access to its subscribers.

Retirees: This RRSP Mistake Could Cost You Millions

  Retirees: This RRSP Mistake Could Cost You Millions Avoid RRSP withdrawal taxes by spreading stocks like Fortis Inc (TSX:FTS)(NYSE:FTS) across both an RRSP and a TFSA.Giving you a tax break along with the ability to grow your investments tax free, it can offer considerable tax savings.

OAS clawback results in a reduction of OAS benefits by 15 cents for every above the threshold amount and is essentially an additional 15% tax . Consider selling off real estate like your rental property, cottage, land, stocks , etc., before age 65 or prior to collecting OAS in order to avoid

The government introduced Tax Free Savings Accounts ( TFSAs ) in the 2008 Federal Budget but will Canadians use these accounts? Now, holding investments that created dividend income inside a TFSA might help people avoid clawbacks on Old Age Security ( OAS ) and the Guaranteed Income

The company is one of only a few companies large enough to fund the fibre projects, thus ensuring it remains a leader in the industry.

BCE’s current dividend provides a yield of 5%.

TD

Toronto-Dominion Bank (TSX:TD)(NYSE:TD) is a giant in the Canadian financial sector. It is also a major player in the United States.

The company’s American operations now contribute more than a third of total profits, giving investors some protection against a potential downturn in Canada, while also providing good exposure to the U.S. through a top Canadian stock.

TD has raised its dividend by a compound annual rate of roughly 11% over the past 20 years and continues to earn impressive profits. The current payout provides a yield of 3.9%.

TC Energy

TC Energy (TSX:TRP)(NYSE:TRP) is the new name for TransCanada.

The company is a major player in the North American energy infrastructure industry with pipelines, storage, and power generation assets located in Canada, the United States, and Mexico.

TFSA Investors: 3 Dividend Stocks to Buy and Hold Forever

  TFSA Investors: 3 Dividend Stocks to Buy and Hold Forever Fortis Inc (TSX:FTS)(NYSE:FTS) and these two other stocks are great options to build your portfolio around.Fortis Inc (TSX:FTS)(NYSE:FTS) offers investors a great mix of dividend income and growth. The company is not your average utility provider. For one thing, Fortis has been growing and acquiring companies along the way, leading to significant sales and profit growth.

Saving is important before retirement and after. Dividend investments can create income and growth Strong dividend stocks are a great source of income for retirees . This idea was discussed in If a dividend stock is a good investment, it should be good for anyone from age 1 to age 101 .

Toronto Dominion Bank (TSX:TD)(NYSE:TD) and another two TSX Index giants can help you put some extra cash in your pocket without having to get a second job. Here's how.

TC Energy’s $30 billion capital program should support ongoing dividend hikes of 8-10% per year through at least 2021. The company has the size and financial clout to make strategic acquisitions and new development projects should emerge across the asset base in the coming years.

The dividend provides a yield of 4.4%.

The bottom line

BCE, TD, and TC Energy are all top companies that should continue to be solid buy-and-hold picks for retirees aiming to generate tax-free passive income from their TFSA portfolios.

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Worried Your CPP Pension Won’t Pay Enough? Do This

  Worried Your CPP Pension Won’t Pay Enough? Do This If you're worried that CPP and OAS won't pay you enough to live on in retirement, open an RRSP and hold iShares S&P/TSX 60 Index ETF (TSX:XIU). This index ETF holds a highly diversified basket of stocks based on the TSX 60 — the 60 largest stocks in Canada by market cap.XIU is not the most diversified nor the highest-yielding ETF in Canada, but it has a great combination of both attributes. With 60 large-cap stocks, it has enough diversification to make up the entire equity component of your portfolio. With a 2.7% yield, it generates enough income to gradually boost your cash savings even in bear markets.

Beware the OAS clawback . While your CPP won't take a hit, you'll still have to contribute to the program. I have tried looking this up online, but every site I have been to wants to charge me just to get the answer or does not answer my question and ends up talking about other things.

When companies cut their dividends , investors suffer a double whammy: lower fixed payments and a weaker share price. That’s why Bethesda, Maryland-based Management CV provides institutional clients with lists of stocks for which it is especially concerned about possible dividend cuts.

Click Here For Your Free Report!

More reading

  • 3 Dividend Stocks That Will Feed You Cash for a Lifetime
  • 2 Major Pipeline Stocks to Buy Today and Hold Forever
  • Q4 Earnings: 3 Bank Stocks to Watch
  • TD Bank’s (TSX:TD) Dividend Growth Is Absolutely Phenomenal!
  • Investors: This 1 Brilliant Move Could Double Your TFSA

Fool contributor Andrew Walker owns shares of BCE.

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