FAQ: How To Add Part-Time Income in Retirement

In Adviice, you have two options for adding part-time income during retirement:

  1. Adding a Phase: Define a part-time income phase with a consistent income amount for the period.
  2. Year-by-Year Entry: Enter specific income amounts for each year, allowing for more detailed income projections. Both options allow Adviice to handle tax calculations and inflation adjustments, providing you with an accurate and realistic retirement plan.

Option 1: Adding a Part-Time Income Phase

  1. Identify the Part-Time Income Phase
    • Retirement Age: Start by determining when you will retire and if you plan to work part-time during the transition period. For example, if you're retiring at age 54 and plan to earn part-time income from ages 55-59, you can define that as a "part-time retirement" phase.
  2. Enter the Part-Time Income Amount
    • Estimate the Gross Income: In Adviice, enter the expected gross income for the entire part-time phase. For example, if you expect to earn $112,000 per year during the first few years of retirement, input that figure for each year within the part-time income phase.
    • Adviice Handles Calculations: Once you enter the income amount, Adviice will automatically calculate taxes, Canada Pension Plan (CPP) contributions, Employment Insurance (EI), and other deductions based on the gross income you provided.
  3. Review and Recalculate Projections
    • After entering the part-time income phase, review the projections in Adviice to see how your income evolves over the years. You can recalculate the plan to ensure the numbers reflect your retirement goals.

Option 2: Entering Year-by-Year Part-Time Income

  1. Enter Year-by-Year Income Data
    • If your part-time income is expected to vary from year to year, you can enter specific income amounts for each individual year in Adviice. For example:
      • Year 1: $112,000
      • Year 2: $60,000
      • Year 3: $30,000
      • Year 4: $12,000
    • Adjust Income Annually: Instead of entering one fixed amount for the entire phase, you can customize the income for each year, allowing for more precise modelling of your income as it changes over time.
  2. Adviice Will Calculate Taxes and Deductions
    • Similar to the phase option, Adviice will automatically calculate the necessary tax and deduction adjustments based on the year-by-year income you enter.
  3. Review the Projections
    • After entering the year-by-year income details, review the projections in Adviice. The tool will show how your income and retirement plan evolve year by year, accounting for taxes, deductions, and inflation.