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New article: review of OAS and reducing OAS clawback
May 18, 2013
10:50 am
Peter
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A new article has been anonymously written about OAS: it provides an intro to OAS and some strategies to reduce OAS clawback:

https://www.highinterestsavings.ca/2013/05/review-of-oas-and-strategies-to-reduce-impact-of-the-oas-clawback/

May 18, 2013
3:01 pm
Deb
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Excellent article, Peter. Thanks!

May 18, 2013
8:13 pm
regsmith
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I was under the impression that any compounded GICs would generate a T5 each year with the money you would receive, but on retrospect, it doesn't make sense.

All of our compounding GICs are in TSFAs so it really wouldn't matter, would it, when the interest is deposited in our accounts?

However, I am glad to have read the article as it has given me information I can pass on to others.

Thanks.

regsmith

May 24, 2013
9:37 am
pebbles
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Regarding T5's on GIC's, my understanding is that if you have a 5 year non-registered compounding GIC that interest is not paid out until maturity ( at the end of the 5 year term). Then you get a T5 representing the accumulated interest over the 5 year period. I have a 5 year non registered GIC with Accelerate and they offered either an annual pay or compounded. The rate was the same for either option. I opted for the annual pay as I didn't want a big lump sum interest payment at the end of 5 years. This is the way they explained it to me.

May 24, 2013
1:40 pm
kanaka
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pebbles said

Regarding T5's on GIC's, my understanding is that if you have a 5 year non-registered compounding GIC that interest is not paid out until maturity ( at the end of the 5 year term). Then you get a T5 representing the accumulated interest over the 5 year period. I have a 5 year non registered GIC with Accelerate and they offered either an annual pay or compounded. The rate was the same for either option. I opted for the annual pay as I didn't want a big lump sum interest payment at the end of 5 years. This is the way they explained it to me.

https://www.cibc.com/ca/gic/article-tools/you-your-gic-and-your-t5.html

May 25, 2013
8:31 am
pebbles
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Accrued interest makes more sense. I must have misunderstood the explanation. ( I didn't get the explanation from Accelerate - got it elsewhere)

May 25, 2013
11:54 am
kanaka
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pebbles said

Accrued interest makes more sense. I must have misunderstood the explanation. ( I didn't get the explanation from Accelerate - got it elsewhere)

I am sure you know ..... a GIC with compounded interest will yield more in your pocket than if paid out annually.

Regards Peter

ps. I think that years ago you did NOT pay income tax til the GIC matured....but I could be wrong!!!

May 26, 2013
8:09 am
Jim
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With a multi-year compounding interest GIC in a non-tax-sheltered account, you get a T5 every year showing that year's interest. You do NOT get one massive T5 at the end when it matures. I know this for sure.

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