Newspaper article The Canadian Press

Changes to Athlete's Retirement Plans a Small Step to Helping with Finances

Newspaper article The Canadian Press

Changes to Athlete's Retirement Plans a Small Step to Helping with Finances

Article excerpt

Next event: retirement planning

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TORONTO - The medals, the tears and the pride may be what most Canadians remember from the Olympics, but when the glory fades, athletes need to plan for retirement, just like everyone else.

A recent policy change by Ottawa will make it easier for them to invest in RRSPs but, given the meagre earnings of many amateur athletes and their focus on planning for the short term, it's a challenge to financially prepare athletes for the future.

"The funding is a huge problem for national team athletes, so any move to increase money or money to help athletes is am important one," said Thomas Hall, an Olympic medallist in sprint canoe who retired from paddling in 2012.

"It is nice that it opens room in the RRSP, but ... I know for a fact that, for the 10-plus years I was on the national team, the best year I ever had was when I won an Olympic medal ... and I still finished with plenty of debt. There just aren't that many athletes making that much money," said Hall, who also works with Canoe Kayak Canada and AthletesCAN, two organizations that support athletes.

Under Canadian tax rules, athletes competing for Canada are able to take income from endorsements, prize money or speaking engagements and place it in an amateur athlete trust. It's a tax-free shelter until they take it out - and allows them to grow those funds on a tax-free basis while they compete.

But since RRSP contributions are based on earned income, none of that money could be used toward a contribution calculation, which means athletes had less RRSP room.

In the federal budget tabled Feb. 11, Ottawa changed the rules so that any income put into an amateur athlete trust can now qualify as earned income and help determine the athlete's RRSP contribution limit.

Jamie Golombek, a tax expert with the Canadian Imperial Bank of Commerce, said it was a positive move by the government in assisting athletes to reach solid financial footing.

"This is just a policy change to not penalize these individuals who have contributed much to the Canadian athlete profile around the world (but) typically don't earn large amounts of money," Golombek said. …

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