July 10, 2025 - Release Notes - Taxable Income Targeting

Managing contributions and withdrawals to target a specific taxable income and marginal tax rate can significantly reduce your clients’ tax burden. With Snap, you can set an annual Taxable Income Target for each year of your projections, and Snap will automatically adjust cash flow to stay as close to that target as possible.

You can enable the Taxable Income Targeting feature from the Taxable Income column header on the Planning Pages. If the Tax section is collapsed, you will need to first expand it by clicking the blue box with the white arrow to the right.

Once you enable the feature and click Save, a Target column is added to the Planning Pages. From the individual Planning Pages, you can enter a Target Taxable Income for each client in each year of the projection, beginning when the feature is enabled.

On the individual Planning Pages, you can click the dollar value in any year beginning at your selected Start Age. You can then enter a value, with the option to copy that Target to the Spouse (if applicable), copy the value into the future, and either index the value at a custom rate or indicate if it's in real dollars.

A common way to use this tool is to select a target tax bracket/marginal rate to maintain during the decumulation period of your projection. For instance, you may select the top of the lowest taxable income bracket for your client's province or territory. In Ontario, the first $52,886 of Taxable Income is taxed at 20.05%. You may choose to withdraw additional registered money early in retirement to take advantage of the lowest bracket.

You can use the existing Comparing Scenarios tool to analyze how different Taxable Income strategies affect your client's outcomes. This can make it easier to guide decisions and demonstrate the value of your advice.

In the following client case, we've created two scenarios. Scenario 1 uses the default Cash Flow Management (CFM) Order for withdrawals of non-registered, TFSA, and registered accounts. Scenario 2 uses the same CFM Order and withdraws extra registered money to help the client reach the top of the lowest tax bracket in Ontario.

The Taxable Income Targeting approach increases the projected Estate After Tax in almost all future years. At the largest difference, there's a $250K advantage for the second scenario using the Target.

You can find a full overview of the feature in our dedicated Taxable Income Targeting article.

We're continuing to build automated tools to help reduce the time taken to create optimized scenarios for your clients. We are excited to share more updates with you soon. In the meantime, please let us know if you have any feedback on the Taxable Income Targeting tool, or if there are other common optimizations that you test in your client scenarios (e.g., TFSA top-ups, CPP Start Age timing).