You're likely to get hit with the cost of distributions paid out to fund-holders for capital gains realized over the previous year, even though you didn't own the fund during that period and haven't shared in its growth. Your bad timing will cost you in April because you'll have to pay tax on that distribution amount. That way you'll minimize the amount of tax you have to pay on your total earnings. Giving your money away to your children as a means of lowering taxes on your estate. You may still need these funds yourself.
Unexpected illness can wipe out savings in no time.
You are not in control of what is going to happen in your children's lives, things like divorce or business failure. Most provinces also top up the GIS for poorer seniors. However, these benefit plans are income-tested. GIS benefits are reduced by 50 cents for each dollar of non-OAS income. Laura Ramsay is a freelance writer specializing in personal finance and workplace issues.