CIFP RRC Exam key terms

A tax-deferred Canadian savings account where contributions are deductible from income and growth compounds untaxed until withdrawal, when amounts are added to taxable income.

A Canadian payout vehicle that an RRSP converts into, requiring annual minimum withdrawals that are fully taxable as income and increase as the holder ages.

A Canadian registered account funded with after-tax dollars where investment growth and withdrawals are tax-free, and withdrawn room is restored the following calendar year.

A Canadian account used to save for a child's post-secondary education, attracting government grants and allowing income to be taxed in the student's hands when withdrawn.

A federal grant paid into an RESP equal to a percentage of annual contributions, subject to lifetime caps and depending on family income levels.

An employer-sponsored plan that promises a specified retirement income, usually based on earnings and years of service, with the employer bearing the investment risk.

An employer-sponsored plan where contributions are fixed and the eventual retirement income depends on investment performance, so the employee bears the risk.

A value reported on a tax slip that reduces a person's RRSP deduction room to reflect pension benefits earned in a registered employer plan that year.

The maximum amount a person may contribute to a registered account, calculated from annual limits, prior contributions, and adjustments such as pension or withdrawal activity.

The prescribed percentage applied to a RRIF's value each year to determine the smallest withdrawal the holder must take, rising with the holder's age.

A federal contributory social insurance program that pays retirement, disability, and survivor benefits based on contributions and earnings, with benefits indexed to inflation.

A federally funded monthly pension paid to seniors meeting residence requirements, subject to a recovery tax that claws back benefits at higher income levels.

A recovery tax that reduces or eliminates Old Age Security benefits when a recipient's net income exceeds a threshold, effectively raising the marginal tax rate.

A provision allowing spouses or common-law partners to divide the retirement pension earned during their time together, often used to reduce combined tax payable.

A strategy of shifting income or deductions to a lower-income family member to reduce total household tax, often through pension splitting or spousal loans.

The percentage of tax payable on the next dollar of income, which determines the value of deductions and the cost of additional withdrawals.

Total tax paid divided by total taxable income, expressing the overall share of income that goes to tax rather than the rate on the next dollar.

A range of taxable income to which a particular statutory rate applies, with progressive systems applying higher rates to higher portions of income.

The profit realized when a capital property is sold for more than its adjusted cost base, only part of which is included in taxable income.

The total cost of acquiring and improving a capital property, used to calculate the gain or loss when the property is sold or deemed disposed.

A loss arising when capital property is sold for less than its adjusted cost base, generally usable only against capital gains rather than other income.

A capital loss denied for tax purposes when the same or identical property is repurchased within a specified period, preventing artificial loss recognition.

Tax provisions that attribute income or gains back to the transferor when property is transferred to a spouse, minor, or related person at less than fair value.

A tax rule treating property as sold at fair market value even without an actual sale, commonly triggered at death or on emigration.

The court process confirming a will's validity and appointing an executor, often involving fees based on the value of the estate passing through the will.

A written instruction naming who receives the proceeds of a registered plan or insurance policy, which may bypass the estate and probate entirely.

A planning technique that fixes the value of an owner's interest at a point in time, shifting future growth to successors to limit tax on death.

A trust established for a surviving spouse that may qualify for a tax-deferred rollover of property on death, deferring tax until the spouse's death.

A legal document authorizing a named person to manage another's financial or personal affairs, continuing or ending depending on whether it is enduring.

A contract paying a stated sum to a beneficiary when the insured dies, used to replace income, cover debts, or fund estate tax liabilities.

Coverage purchased for a fixed period that pays only if death occurs during that period, typically with lower initial cost and no cash value.

Coverage lasting for life that builds cash value and may allow policy loans or surrender, generally costing more than term coverage.

The amount a policyholder receives on cancelling a permanent policy, reflecting accumulated cash value less any surrender charges or outstanding loans.

Coverage replacing a portion of earned income when illness or injury prevents work, with terms defining the definition of disability and benefit period.

Coverage paying a lump sum on diagnosis of a specified condition, providing funds for treatment and living costs without depending on inability to work.

A snapshot listing assets and liabilities at a point in time, used to measure financial position and track progress toward planning goals.

A summary of income and expenses over a period that shows surplus or shortfall and supports saving, debt reduction, and retirement contribution decisions.

Liquid savings set aside to cover several months of essential expenses, protecting long-term investments from forced sales during income interruptions.

A client's willingness and financial ability to accept investment losses in pursuit of returns, shaping the appropriate asset mix for a plan.

The division of a portfolio among asset classes such as cash, fixed income, and equities, which largely determines its risk and return characteristics.