Great vids! Slickly done, pleasant background, right to the point. I discovered when investigating when to create RRIFs from our 3 self-directed RRSPs (personal, personal, spousal) that my financial institution (RBC Action Direct) waives "deregistration fees" for RRSP withdrawals ($50 each time you pull money out!) if you you have sufficient funds with them (I seem to remember it was something like more than 400k to be a member of a somethingorother club - I'd have to look it up). So I can make withdrawals from the RRSPs without needing to create RRIFs, of any amount I want, subject only to normal withholding tax. The result is the only benefit to creating a RRIF pre-70 is the tax splitting benefit of having the withdrawals presumed as pension income, whereas we would have to allocate RRSP withdrawals to sort out the tax implications for each of us, and the convenience of not having to do monthly transfers into our chequing.
I'm not sure if you've covered this topic before: What's the right mix of withdrawing from TFSA, RRSP, RRIF, savings and non-registered accounts? Especially before age 65. I know it's a tall order but I'm wondering if there are general rules of thumb? Does it make sense to withdraw TFSA early on until you reach the age for CPP and OAS? Does a RRIF withdrawal blended with savings make sense then readjust when other income streams come online? Honestly, the right mix of income sources in retirement for tex efficiency seems like a complex optimization problem.
No general rule. Everyone's situation is very different. At the end of the day it's a mix of reducing and leveling off your tax bill while integrating your retirement and estate goals.
Your video's regarding RRIF and this can start as early as 55yrs, is really helping with the planning of what is coming. Looks like lower income will be at 65 yrs of age....so hold off on OAS and CPP and dip into the RRSP until 71....this clarity is wonderful to have...so thank you so much. I shared one of your vids with two other people who are in their early 60's....to help them think carefully... 🇨🇦. 💯
My Personal Bank rep said that if you have more of your investments and net worth in one bank the amount they charge you in management fees goes down. It may be better to get all your RRSPs/RRIFs in one bank or institution to lower the management fees. Ie; If you have $300,000 in 3 different banks you may pay 5% management fee ( I am guessing ). If you have $900,000 in one bank you may pay 4% . Plus it is a LOT easier for your estate executor to deal with one institution when you die/pass away. I know that from current experience dealing with my parent's estates. It is not fun dealing with multiple banks and credit unions etc.
@@ParallelWealth They don't really advertise it. I have been with the "Cdn" bank for many years and all my mutual funds are with them. My Bank rep casually/accidentally mentioned a few months ago when I was talking about my parents having accounts in several places that it is better for me to have all my RRSPs in one bank. People need to know there are management fees deducted from mutual funds and nobody is looking after them for you for free.
Pension income tax credit - you mentioned withdrawals from your RRIF qualify., the first $2000 and that the credit is about 15%. It seems numerous comments are under the impression that the credit is $2000. Please clarify. Thank you.
Your videos are really informative! Thank-you. Is this rule about withdrawing from each RRIF account still true in 2023? So if I have a CAD RRIF and a USD RRIF I would need to make the minimum annual withdrawal from each of them? "You are allowed to have multiple RRIFs, but it's important to know that the minimum needs to be redeemed from each account; you can't redeem your 'total minimum' from just one account."
Hi Adam, Pension Income tax Credit ($2,000) Question.... - If I am 65 and drawing from a RIF Account and 2 LIF Accounts’s, do I get the $2000 Pension Income tax Credit from each account ? If not, can you elaborate on how it would work ?
I'm only 60 yrs old and will be withdrawing from one of 2 accts till i'm 65 and can apply for my CPP. Was wondering where to take from first my RRSP or LIRA? I have a RIF already open from a severance pay package, i'm looking to stay where i am at $1000 a month after tax
What is the process for withdrawing min RRIF $ from investments in stocks, bonds, ETF, etc. Is it advisable to have the min amounts in cash in those investment accounts at your designated RRIF withdrawal date. Seems obvious that you must sell a certain portion of your portfolio to accommodate the min. Withdrawal $. Are there certain required dates for these sells?
Hi Adam, so glad I found your channel. Thank you for the information. I've never heard of The Pension Income Tax Credit before. I'm turning 65 in August but am still working part-time and don't need the $2,000. Should I still transfer $2,000 from RRSP to RRIF and then withdraw the sum? Or wait until I'm fully retired, which may be in 2022. Thanks!
@@ParallelWealth What if you are start getting CPP and OAS? Does that also count towards the Pension Income Tax Credit $2000? I hope not since then the RRIF withdrawal wouldn't be able to take advantage of the tax savings.
Great info. Thanks. I am 68 and receiving pension for the previous 3 years. I had no idea of the pension Income Tax credit and as such I didn't claim them. Is there any way I can claim those in my next year return?
I just added you to my subscriptions, Thank you for the video. Wish I had known about the $2000.00 free income before now. I turn 70 this summer and at the moment do not have a RRIF. I understand that I can open a $2000.00 RRIF take it tax free? But at age 71 Must convert all into a RRIF . Only taking the minimum during my 72nd year and on? My Question s does the $2000.00 tax free continue after age 72 or does that go away once we are forced to convert and start drawing from our RRIF's. I am sure I am not the only person wanting to know this. Hope you will respond. Thank You.
Hi There! I like your videos a lot. By watching 2 of them I got to know way more about RIFFs than the bank employee that opened my RIFF - and I gave her some good advice. (I found this worrying with regards to bank employees) Anyway, I saw somewhere that the formula for the fraction of an RIFF one has to withdraw is 1/(90 - age). This formula works nicely on your table (1:14 on video)up age 70, after which it falls off the rails. Do you know the correct formula that works for the entire table? Thanks. (Sorry for the question; I am a retired math teacher and I just want to know)
so a high valued rrif has to take out a lot of money especially later in life? what happens to that money that you dont actually need ? put it back into a private fund?
Is opening a RRIF account as easy as simple as opening a RRSP or TFSA? I won’t be opening (or converting my RRSP) until Year end of my 71st birthday. I have a self-directed RRSP, and financial institution (mutual fund) RRSP account. So in self-directed, I see they have the RRIF accounts, will I simply transfer over my Stocks, ETFS, and everything stays the same? Mutual funds at bank, they’ll do it for me (convert) it to RRIF?
I tried looking up o line but I can't find anything. If you retire early (before age 55 for example) can you convert RRSP to a RRIF? And if so, what's the % you need to withdraw from your RRIF that year? (Let's say age 45 for example)???
As a single person living in Ontario with no pension other than the Canada Pension Disability and RDSP, what is the optimum amount of RSP one should try and enter supposed retirement at age 65 with. Assuming, a 7 per cent return, I want to maximize the $2000 credit each year, and I hoping to deplete the RRIF in 15-20 years as my health isn't the greatest. I'm guessing somewhere between 40 - 50K, but I would love to hear the real number.
Hi, Adam. What do you think of RRIFs invested in high yield covered call etfs & income funds. Since minimum withdrawals are way lower I believe in the first 10 - 15 years compared to yield, you get to maintain your principal.Your input would be greatly appreciated. Thanks!
Hello, if you have a rrif of $100,000 at 65 you must take out 4% therefore $4000. are you taxed fully on $2000, and a tax credit of $2000. is the tax credit the full $2000 that you pay no tax.
Another question, if you don't mind. if I have my own company pension and also my RRIF withdrawals, do I get a $2000 tax credit for my pension payments and another $2000 for my RRIF withdrawals. Or only for one of them? Which one? Thank you.
i am 67 already but started receiving my CPP when I turned 62, got a survivors income and when i turned 65 I quit my part time income with still a full time income yet and planning to quit when i turned 70. I have an RRSP and still contributing from work. when can i get my RRSP or can I covert it to the RRIF what are the consequences of taking out money if converted to RRIF
You can start anytime. Any amount will be added to your income for tax purposes. If you have no other pension income, the first 2k would qualify for pension tax credit - so do at least 2k from RRIF
My understanding is that the bank has to process the minimum still, but check with them. I think it should start far before that though in planning - not to have RRIF locked in a GIC!!
Hi Adam I have locked in RRSP from my old employer I quit back in 2003. I was told by Canada Life that it has to be converted to a locked LIF and from there I can unlock up to 50% and transfer it to RRSP at another financial institution and from this account I can withdraw any amount any time. The other half is supposed to be set up the way you are saying. So confusing. I would appreciate your input. Love your videos, very helpful.
Yes depending on the provincial or federal registration of the LIRA. There could be an unlocking provision. Sounds like you are in Ontario if it's 50%. It can get quite complicated, but in simple terms you will be able to unlock 50% to a RRSP which has less limitations on withdrawals than locked in accounts- which have a max you can take out.
@@Andrew21882 Hi Andrew, I have been living in Wpg. Few years ago, there was a rule change for withdrawing on the Locked in. I was able to cash out 50% and right after converted the remain 50% to a LIF then withdrawed this remaining 50% in few days with the provision SMALL AMOUNT. My locked in was around $20,000 with RBC and LISA MATWYKO of Asiniboine CU at 620 Sterlinglyon Park way, Wpg helped me (try contact her if your bank say they can't). Talk to your institution or your financial planner at your bank, they will check out if there is the way for you to withdraw all your locked in. Good luck
Hi Adam very informative videos for Canadians. There is a lot I learned from your videos . What happens to the investment in stocks and ETF as we start withdrawing from RRIF as the non invested amount slowly drains out, do we have to liquidate all the assets. Is there any other provision for the invest asset. Thanks in advance
Thank you! RRSP holds back 30%, while RRIF holds back less tax (62 years old) Am I correct? It looks like I will have an income less that 50k next year total, I think I would receive almost all paid tax back. Am I correct?
I have only spousal RRSP because I never worked. Can you talk something about spousal RRSP when converting to RIFF? I am 68 now, my husband is still working, 80k income for the year. Am I qualified for GIS? Thank you very much. I will check for your reply when I watch this video again.
We have a video on spousal rrsp, so search the site for that. GiS is based on family income...so you wouldn't qualify. Likely would make sense to start taking money from the spousal to have some income at a low to zero tax rate. You could be leaving tens of thousands on the table.
Hi Adam. Great job as usual. I have 2 questions : 1. I'm 56 still working, can I still transfer $2k into a RRIF and continue to contribute to the RRSP? 2. Then can I take out the $2k tax free?
The 2000 is not all tax free. It's just the Federal and any provincial tax usually 15% you will be saving. Again depending on your total net income. His vids are good but no math shown. A template to input any incomes and credits would be good to see your total tax and savings under various scenarios.
@@jro8503 yes after 65. You get the pension tax benefit and also another tax credit for old age benefit which is another 9000$ I think times the tax credit on levels of governement to get the additional savings. I have a template havent used it in while since got out of corporate finance. It works out to like another 5k in tax free threshold for 65+.
Hi Adam, I love your videos about RRSP to RIF and i am reaching 65 next year. My question to is while i was watching your video about RRSP withdrawal i heard you were saying that if i withdraw money from my RRSP i have to pay withholding tax which i know but i want to ask what will happen if i withdraw $5000 in installment say every month 5000 and how do i have to pay withholding tax. Do have to pay only 10% every time or max 30%. Thanks
If you are just doing $5k per month then each withdrawal will have 10% withholding tax. But be aware that you will likely fall into a higher tax bracket for the year and owe more taxes at tax time.
Why does the governments tax , something that we saved for , at the time we want to take out our own money , saved in a RRSP or a RRIF ? When we take money out of a regular bank account , the governments , don't tax us for that ?Is it because we saved money , when we received a reduction in our fiscal taxes at the end of the year ?
Hi Adam. Great information!. My question is what happens with a locked in gic within an rrif. I believe banks have to allow you to withdraw the government stipulated minimum each year but what happens if you want to withdraw more than that?
Other TH-camrs stated that the owner can withdraw over the minimum and start facing tax withheld, plus may deplete the RRIF account when owner turns 98.
Adam, is my wife able to roll her rrsp and spousal rrsp into one rrif? And further to that could I add that to my rrsp turned to rrif so we just have one? Thanks Jeff
great info videos. just ur opinion. im gonna be 65 this january. widowed with about 370,000 rrsp and about 50,000 tfsa. collecting survival and decided to delay my cpp retirement cause it affected my survival and i still gualify for GIS. Do you think i should withdraw from my tfsa so that i can continue to qualify for my GIS or should i start my withdraws from rrsp to rrif account (maybe put 100k ) into rrif as im gonna need about 10,000 to 15,000 more each year for expenses? i know its a tough question but just wonder cause i could collect about 40k of tax free money from GIS for about 5 yrs. but at the same time i need to start withdrawing from my rrsp so that it dosent hurt me later with a higher tax rate. what do you think? thanks again.
Hi Adam, Understood that your RRSP has to be transferred to RRIF at the age of 71. Does the Spousal RRSP have to be transferred to RRIF at the same time or transferred when your spouse turns 71.
Both have to be transferred by the owner of the account turning 71. But you can base minimum payments off the younger spouse. Probably makes sense to convert prior to 71 in most scenarios - but let you financial plan decide that.
If you are single without DB and have over $500,000 in LIRA/RRSP, is there a strategy where it may make sense to take more than you need out of your RRSP early and transfer it either into TFSA, if room, or regular investment account in order to save tax for you or your estate later?
If I make four withdraws per year from my RRIF can I take the minimum out four times without tax? Example withdraw 16,000 out of a 100,000 RRIF without holding tax. Or is the minimum only once a year and the other withdraws have tax withheld?
My wife has a government pension and I have no pension. If she has me claim up to 50% of her pension cheque does that amount let me claim the $2000 pension credit amount ? - Thanks
Hi Adam, I am about to initiate an RRSP melt down (I am 58 will be 59 in April); and I am wondering if I have to withdraw money from my RRSPs in $5K increments with 1 or 2 weeks apart to save on income tax or can I withdraw $24K all at once? Thank you!
Well, if you take it out in 5k incrementally the withholding tax will be 10% each time if you take. If you take all 24k in one swoop it will be 30% but don't forget when you do your taxes it will all even out so let's say you took out 24k all at once and paid the 30% withholding but your at actually in a 26% tax bracket, you'd get the 4% back on your taxes. Alternately if you took out the 24k in 5k incrementally you would owe 16% of the total at tax time, as you had paid 10% up front as withholding tax. So yes if you want to take it incrementally you save some withholding tax at the beginning but you pay it later.... in this senario you would have 20% of 24k (4800) less witholding in your pocket gir most of the year wich uou coukd jnvest i guess, for 10 months if uou wanted... seems a hassel to me, now is all this math clear as mud?😉😉😉
@@shannonbarthelette4749 thanks for your advice. I also inquired with my financial advisor and he said that he would also charge $50 each time I withdrew $5K and that it would all equal about the same amount in the end. He also mentioned to me that I would end up not owing any income tax at the end of the year due to my low income.
@@shannonbarthelette4749 I was surprised to hear of the fee myself but I realize that Banks as well as private companies require pay per service for managing our money as well as being paid by the Bank. Why I inquired about the melt down of my RRSPs was that I met someone that works for Sunlife and they said to take the money out in increments of $5K a couple days apart to show that they are separate transactions so not to pay a higher withholding tax. When I discussed this 1 year ago with Liberty Tax he said that I will be paying way more income taxes than what my financial advisor told me. As you can see I am confused as to whom is advising me correctly as was laid off in 2020 and given a small DB as well as medical benefits as a semi-retired ex-employee.
@@connielapierre1892 Hi, I just transferred my TFSA between institutions and saved th $50. By going to both banks in person. Yes confusing. I was in the industry so I learned all this in detail. Google the combined tax rate for my province and it will give you a approx total tax rate of combined federal and provincial. Remember the 1st 13,000 is tax free and also the first 2000 from a pension plan or rrif. So 15000 is deducted from your taxable jncome. In Bc that will be 20% on the first 41,000 minus 15,000 (personal exemption and pension plan wd) so that is 5200. In taxes on 41000 income. Cheers.
Is there a minimum for the RRIF between 50 and 55 yrs old? I want to start drawing this down beginning at 50 (retirement) and then use CPP OAS and work pension as income after that.
My question is if I have 6,000. rrsp in a bank and I have other rrsp in another institution as I am 64 now, I am allowed to turn that 6,000.into rif this year? And leave the rest as is(rrsp).thanks for the advice.
Hi Adam. If you are only pulling income from your RRIF based on the dividends generated each month as your income stream at age 65 ( no other income) would I be correct that based on a 4K monthly withdrawal that the withholding tax would be 30% of 4K for each monthly withdrawal?
No, 10% and remember withholding tax is applied to your income tax at year end, it's like a pre payment. So 4k x 12 months = 36,000 yearly income. In bc the marginal tax rate on income under 41k is 20%, also the first 13k federal an 10k provincial is exempt so of your income is 36k the exception is subtracted from that.
Hello Adam. Saw your video on pension income tax credit. I have a maxed tfsa, maxed rrsp, and non registered accounts. Turning 65 next may, I have had little or no income for the past 10 years. Is there a way for me to benefit from the pension tax credit?
@@ParallelWealth Adam, I understand I have to wait until 65 to claim the pension income tax credit. My question is, I only had CRA-taxable income of approx. $6500, upon which I did not have to pay income tax. My question is, for tax year 2022 (given I will turn 65 on May 4th, 2022) can I claim the PITC if I have no taxable income to apply it against? I'm planning to take OAS and (hopefully) GIS at 65, and wait with CCP until 70. Your thoughts? Thanks!
This is what I did to save some tax $ is instead of receiving a monthly income from my RIF's, I withdraw the required minimum in one lump sum in December. Any income earned is tax protected for almost a year.
How much do I draw out from RRSP into rrif to withdraw a minimum $2000 from rrif to benefit from pension tax credit of $2000 if I'm 57 years old and on the way to retire
Mei, you just need to move $2,000 to your RRIF and then redeem it. There will be a 10% withholding tax over the minimum RRIF amount, so left with just over $1800 in your pocket. Depending on your tax rate you could get back your withholding tax and you get the full tax credit on the full $2k redemption.
Hi Adam, is there any advantage to converting a portion of RRSPs to a RRIF before 65? I realize there’s no withholding tax on the minimum required withdrawal, but I don’t see this as a benefit. I’d rather pay a withholding tax and potentially see some or all of it back later. Thanks!
Hi Adam, thank you for your videos. Are there strategies to avoid RIFF withdrawal fees. ie. fewer withdrawals or not changing the withdrawal amounts. To be clear, I am not referring to taxes but fees to be paid. Could this be something that you could provide a video on. Thank you for making these informative videos.
@@ParallelWealth Thank you! I am not there yet, just looking at options of melting down the RRSP first or converting to a RIFF. I was reading that ...There is typically a fee charged on every RRSP withdrawal. These RRSP withdrawal fees are called “partial deregistration fees” and they can range anywhere from $50 to $100+ depending on the financial institution.
I love your sessions. Can you maybe do a session on what affect the possible China invasion of Taiwan will have on our retirement investments? Thank you!
I am retiring in about a month and have a defined benefit pension, cpp and oas, along with about 100k in an rrsp. What would you suggest l do with the rrsp. Should l convert it to an RRIF or just draw out a certain amount from my RRSP. I really don't need the extra money so should l just leave it till 71?
It all depends on your DB pension amount. If you don't need money from your RRSP and fall into a higher tax bracket then I would wait until 71. If you can draw out slowly over next 10+ years in a low tax bracket then look to do that. Happy to connect by phone if you want. We offer fee for service planning, which would be valuable in this situation to make the right choice moving forward.
I always go back to this video when i forget. You help me more than my advisor
I hear that a lot 🤷🏻♂️
Very pleased there is a host can keeps up & explains details as an assistant.
Save lot of time to search.
But need to slow down a bit to absorb.
You can play at a slower speed (or faster) on TH-cam.
Great vids! Slickly done, pleasant background, right to the point. I discovered when investigating when to create RRIFs from our 3 self-directed RRSPs (personal, personal, spousal) that my financial institution (RBC Action Direct) waives "deregistration fees" for RRSP withdrawals ($50 each time you pull money out!) if you you have sufficient funds with them (I seem to remember it was something like more than 400k to be a member of a somethingorother club - I'd have to look it up). So I can make withdrawals from the RRSPs without needing to create RRIFs, of any amount I want, subject only to normal withholding tax. The result is the only benefit to creating a RRIF pre-70 is the tax splitting benefit of having the withdrawals presumed as pension income, whereas we would have to allocate RRSP withdrawals to sort out the tax implications for each of us, and the convenience of not having to do monthly transfers into our chequing.
I'm not sure if you've covered this topic before: What's the right mix of withdrawing from TFSA, RRSP, RRIF, savings and non-registered accounts? Especially before age 65. I know it's a tall order but I'm wondering if there are general rules of thumb? Does it make sense to withdraw TFSA early on until you reach the age for CPP and OAS? Does a RRIF withdrawal blended with savings make sense then readjust when other income streams come online? Honestly, the right mix of income sources in retirement for tex efficiency seems like a complex optimization problem.
No general rule. Everyone's situation is very different. At the end of the day it's a mix of reducing and leveling off your tax bill while integrating your retirement and estate goals.
You have the best videos
Thanks, Janet!
Very interesting
Love your videos!!
Nice to see your channel growing 🌼
Thanks for the kind words. Yes, it's been a great week on the channel!
Your video's regarding RRIF and this can start as early as 55yrs, is really helping with the planning of what is coming. Looks like lower income will be at 65 yrs of age....so hold off on OAS and CPP and dip into the RRSP until 71....this clarity is wonderful to have...so thank you so much. I shared one of your vids with two other people who are in their early 60's....to help them think carefully... 🇨🇦. 💯
The more I watch these videos, the more I realize how much I don’t know….
Can’t thank you enough for this. I’ll be your future client 😀
Thanks Enid. Ready to help when you need it!
Thank you for your advice, very informative. I appreciate your videos.
You are so welcome!
My Personal Bank rep said that if you have more of your investments and net worth in one bank the amount they charge you in management fees goes down.
It may be better to get all your RRSPs/RRIFs in one bank or institution to lower the management fees.
Ie; If you have $300,000 in 3 different banks you may pay 5% management fee ( I am guessing ). If you have $900,000 in one bank you may pay 4% . Plus it is a LOT easier for your estate executor to deal with one institution when you die/pass away. I know that from current experience dealing with my parent's estates. It is not fun dealing with multiple banks and credit unions etc.
Yes sometimes bank will do this to get more of your assets and business. I personally think it's shady and will/should drive more ppl away long term.
@@ParallelWealth They don't really advertise it. I have been with the "Cdn" bank for many years and all my mutual funds are with them. My Bank rep casually/accidentally mentioned a few months ago when I was talking about my parents having accounts in several places that it is better for me to have all my RRSPs in one bank.
People need to know there are management fees deducted from mutual funds and nobody is looking after them for you for free.
Pension income tax credit - you mentioned withdrawals from your RRIF qualify., the first $2000 and that the credit is about 15%. It seems numerous comments are under the impression that the credit is $2000. Please clarify. Thank you.
15% on the first 2k
Your videos are really informative! Thank-you.
Is this rule about withdrawing from each RRIF account still true in 2023? So if I have a CAD RRIF and a USD RRIF I would need to make the minimum annual withdrawal from each of them?
"You are allowed to have multiple RRIFs, but it's important to know that the minimum needs to be redeemed from each account; you can't redeem your 'total minimum' from just one account."
super great tip thanks
Thanks for watching, I have something real big I’d love to introduce to you.
📩𝟷𝟿𝟹𝟾𝟿𝟶𝟸𝟿𝟼𝟻𝟽
Hi Adam, Pension Income tax Credit ($2,000) Question.... - If I am 65 and drawing from a RIF Account and 2 LIF Accounts’s, do I get the $2000 Pension Income tax Credit from each account ? If not, can you elaborate on how it would work ?
what if I forget to take out the min required RIF in one year, what will happen?
You should be able to leave your money in your rrsp and withdraw it as needed not as mandated whether you need it or not. That seems fair to me.
You're funny. Since when is life or taxation fair? CRA go after little guys b/c the rich hire lawyers and fight.
I'm only 60 yrs old and will be withdrawing from one of 2 accts till i'm 65 and can apply for my CPP. Was wondering where to take from first my RRSP or LIRA? I have a RIF already open from a severance pay package, i'm looking to stay where i am at $1000 a month after tax
What is the process for withdrawing min RRIF $ from investments in stocks, bonds, ETF, etc. Is it advisable to have the min amounts in cash in those investment accounts at your designated RRIF withdrawal date. Seems obvious that you must sell a certain portion of your portfolio to accommodate the min. Withdrawal $. Are there certain required dates for these sells?
Can you talk about company pension federal
Hi Adam, so glad I found your channel. Thank you for the information. I've never heard of The Pension Income Tax Credit before. I'm turning 65 in August but am still working part-time and don't need the $2,000. Should I still transfer $2,000 from RRSP to RRIF and then withdraw the sum? Or wait until I'm fully retired, which may be in 2022. Thanks!
Do it in year you turn 65. $2k of tax free money!! 💰
@@ParallelWealth Thank you!
@@ParallelWealth What if you are start getting CPP and OAS? Does that also count towards the Pension Income Tax Credit $2000? I hope not since then the RRIF withdrawal wouldn't be able to take advantage of the tax savings.
Great info. Thanks. I am 68 and receiving pension for the previous 3 years. I had no idea of the pension Income Tax credit and as such I didn't claim them. Is there any way I can claim those in my next year return?
You could go back and refile your returns. Might be worth it
@@ParallelWealth Thanks. I will give a try..
I just added you to my subscriptions, Thank you for the video. Wish I had known about the $2000.00 free income before now. I turn 70 this summer and at the moment do not have a RRIF. I understand that I can open a $2000.00 RRIF take it tax free? But at age 71 Must convert all into a RRIF . Only taking the minimum during my 72nd year and on? My Question s does the $2000.00 tax free continue after age 72 or does that go away once we are forced to convert and start drawing from our RRIF's. I am sure I am not the only person wanting to know this. Hope you will respond. Thank You.
Do you have a video on the upper and lower withdraws for a locked in RRIF?
Nope, but it's in the works! We are working on a video covering all details around LIRAs and Locked in RRSPs
Hi There! I like your videos a lot. By watching 2 of them I got to know way more about RIFFs than the bank employee that opened my RIFF - and I gave her some good advice. (I found this worrying with regards to bank employees)
Anyway, I saw somewhere that the formula for the fraction of an RIFF one has to withdraw is 1/(90 - age). This formula works nicely on your table (1:14 on video)up age 70, after which it falls off the rails. Do you know the correct formula that works for the entire table? Thanks. (Sorry for the question; I am a retired math teacher and I just want to know)
so a high valued rrif has to take out a lot of money especially later in life? what happens to that money that you dont actually need ? put it back into a private fund?
TFSA, non reg, or anywhere else. Every situation is different.
Great info, however can't see the info re: what qualifies for the tax credit 2k...thank you
In the description
Is opening a RRIF account as easy as simple as opening a RRSP or TFSA? I won’t be opening (or converting my RRSP) until Year end of my 71st birthday. I have a self-directed RRSP, and financial institution (mutual fund) RRSP account. So in self-directed, I see they have the RRIF accounts, will I simply transfer over my Stocks, ETFS, and everything stays the same? Mutual funds at bank, they’ll do it for me (convert) it to RRIF?
very simple - same as any other accounts really
I tried looking up o line but I can't find anything. If you retire early (before age 55 for example) can you convert RRSP to a RRIF? And if so, what's the % you need to withdraw from your RRIF that year? (Let's say age 45 for example)???
As a single person living in Ontario with no pension other than the Canada Pension Disability and RDSP, what is the optimum amount of RSP one should try and enter supposed retirement at age 65 with. Assuming, a 7 per cent return, I want to maximize the $2000 credit each year, and I hoping to deplete the RRIF in 15-20 years as my health isn't the greatest. I'm guessing somewhere between 40 - 50K, but I would love to hear the real number.
Ryan,
Happy to help with your planning. You can find out more at www.parallelwealth.com/ffs
Hi, Adam. What do you think of RRIFs invested in high yield covered call etfs & income funds. Since minimum withdrawals are way lower I believe in the first 10 - 15 years compared to yield, you get to maintain your principal.Your input would be greatly appreciated. Thanks!
I am no investment expert so I will leave this one for the investment experts! Speak to your CFA regarding this one.
What happens if some of your RRSPS are in mutual funds.
Hello, if you have a rrif of $100,000 at 65 you must take out 4% therefore $4000. are you taxed fully on $2000, and a tax credit of $2000. is the tax credit the full $2000 that you pay no tax.
Another question, if you don't mind. if I have my own company pension and also my RRIF withdrawals, do I get a $2000 tax credit for my pension payments and another $2000 for my RRIF withdrawals. Or only for one of them? Which one? Thank you.
i am 67 already but started receiving my CPP when I turned 62, got a survivors income and when i turned 65 I quit my part time income with still a full time income yet and planning to quit when i turned 70. I have an RRSP and still contributing from work. when can i get my RRSP or can I covert it to the RRIF what are the consequences of taking out money if converted to RRIF
You can start anytime. Any amount will be added to your income for tax purposes. If you have no other pension income, the first 2k would qualify for pension tax credit - so do at least 2k from RRIF
Can I share my RRIF with my wife who has no income?
Why would you lend the government interest free money by agreeing to a minimum witholding tax?
How would one do a minimum withdrawal from a RRIF GIC, when the GIC is non-redeemable ?
My understanding is that the bank has to process the minimum still, but check with them. I think it should start far before that though in planning - not to have RRIF locked in a GIC!!
@@ParallelWealth Thanks, proper planning is key to prevent such problems.
Hi Adam
I have locked in RRSP from my old employer I quit back in 2003. I was told by Canada Life that it has to be converted to a locked LIF and from there I can unlock up to 50% and transfer it to RRSP at another financial institution and from this account I can withdraw any amount any time. The other half is supposed to be set up the way you are saying. So confusing. I would appreciate your input. Love your videos, very helpful.
Yes depending on the provincial or federal registration of the LIRA. There could be an unlocking provision. Sounds like you are in Ontario if it's 50%. It can get quite complicated, but in simple terms you will be able to unlock 50% to a RRSP which has less limitations on withdrawals than locked in accounts- which have a max you can take out.
@@ParallelWealth Thank you Adam for your reply. Actually I live in Winnipeg, MB. I am in the process of figuring out what is the best strategy for me.
@@Andrew21882 Hi Andrew, I have been living in Wpg. Few years ago, there was a rule change for withdrawing on the Locked in. I was able to cash out 50% and right after converted the remain 50% to a LIF then withdrawed this remaining 50% in few days with the provision SMALL AMOUNT. My locked in was around $20,000 with RBC and LISA MATWYKO of Asiniboine CU at 620 Sterlinglyon Park way, Wpg helped me (try contact her if your bank say they can't). Talk to your institution or your financial planner at your bank, they will check out if there is the way for you to withdraw all your locked in. Good luck
Hi Adam very informative videos for Canadians. There is a lot I learned from your videos . What happens to the investment in stocks and ETF as we start withdrawing from RRIF as the non invested amount slowly drains out, do we have to liquidate all the assets. Is there any other provision for the invest asset. Thanks in advance
Will depend how much casflow you need. If you can live off the dividends then leave the principal and pass on later in life or at death
Thank you Adam
I am 62 and I have to retire now. Converting part of an RRSP to a RRIF will help. Can I income split with my wife before I am 65.
Can only split RRIF income at 65 onwards
Thank you! RRSP holds back 30%, while RRIF holds back less tax (62 years old) Am I correct? It looks like I will have an income less that 50k next year total, I think I would receive almost all paid tax back. Am I correct?
I have only spousal RRSP because I never worked.
Can you talk something about spousal RRSP when converting to RIFF?
I am 68 now, my husband is still working, 80k income for the year. Am I qualified for GIS?
Thank you very much. I will check for your reply when I watch this video again.
We have a video on spousal rrsp, so search the site for that.
GiS is based on family income...so you wouldn't qualify. Likely would make sense to start taking money from the spousal to have some income at a low to zero tax rate. You could be leaving tens of thousands on the table.
Hi Adam. Great job as usual. I have 2 questions : 1. I'm 56 still working, can I still transfer $2k into a RRIF and continue to contribute to the RRSP? 2. Then can I take out the $2k tax free?
The 2000 is not all tax free. It's just the Federal and any provincial tax usually 15% you will be saving. Again depending on your total net income. His vids are good but no math shown. A template to input any incomes and credits would be good to see your total tax and savings under various scenarios.
@@billm3210but only after age 65, right - for the pension tax credit?!
@@jro8503 yes after 65. You get the pension tax benefit and also another tax credit for old age benefit which is another 9000$ I think times the tax credit on levels of governement to get the additional savings. I have a template havent used it in while since got out of corporate finance. It works out to like another 5k in tax free threshold for 65+.
Hi Adam,
I love your videos about RRSP to RIF and i am reaching 65 next year.
My question to is while i was watching your video about RRSP withdrawal i heard you were saying that if i withdraw money from my RRSP i have to pay withholding tax which i know but i want to ask what will happen if i withdraw $5000 in installment say every month 5000 and how do i have to pay withholding tax.
Do have to pay only 10% every time or max 30%.
Thanks
If you are just doing $5k per month then each withdrawal will have 10% withholding tax. But be aware that you will likely fall into a higher tax bracket for the year and owe more taxes at tax time.
@@ParallelWealth
Thanks Adam.
Can I buy a condo from R.i.if and live in it. Sell my house and get benefit of gain on the primary house .will it work.
Can we both , my wife and I , claim 2000 each Income tax credit?
Thank you.
Yes, you can
Thank you very much.
Why does the governments tax , something that we saved for , at the time we want to take out our own money , saved in a RRSP or a RRIF ? When we take money out of a regular bank account , the governments , don't tax us for that ?Is it because we saved money , when we received a reduction in our fiscal taxes at the end of the year ?
Because you got a tax break putting money into the RRSP.
@@ParallelWealth Thanx , for the info .
Do you have your financial planner in Ontario Burlington.
2 in your area- but they work remote from home
Hi Adam. Great information!. My question is what happens with a locked in gic within an rrif. I believe banks have to allow you to withdraw the government stipulated minimum each year but what happens if you want to withdraw more than that?
Other TH-camrs stated that the owner can withdraw over the minimum and start facing tax withheld, plus may deplete the RRIF account when owner turns 98.
Can you transfer a RIFF from one institution to a bank without paying tax?
Yes as long as it stays in the RRIF
Adam, is my wife able to roll her rrsp and spousal rrsp into one rrif? And further to that could I add that to my rrsp turned to rrif so we just have one? Thanks Jeff
Nope, all separate
Does Parallel Wealth have financial planners in Quebec?
Located in BC only, but can help Canadians right across Canada.
great info videos. just ur opinion. im gonna be 65 this january. widowed with about 370,000 rrsp and about 50,000 tfsa. collecting survival and decided to delay my cpp retirement cause it affected my survival and i still gualify for GIS. Do you think i should withdraw from my tfsa so that i can continue to qualify for my GIS or should i start my withdraws from rrsp to rrif account (maybe put 100k ) into rrif as im gonna need about 10,000 to 15,000 more each year for expenses? i know its a tough question but just wonder cause i could collect about 40k of tax free money from GIS for about 5 yrs. but at the same time i need to start withdrawing from my rrsp so that it dosent hurt me later with a higher tax rate. what do you think? thanks again.
Are you using the 2022 rate of the minimum amount to be withdrawal as in 2020 the amount was reduced by .25%?
Can you transfer your investments (in kind ) from your RRSP to a RIFF when you are required to transfer funds at 71?
Yes they roll over in kind. It's really just the name of the account that changes, what's inside it stays the same (unless you change it of course!)
Hi Adam, Understood that your RRSP has to be transferred to RRIF at the age of 71. Does the Spousal RRSP have to be transferred to RRIF at the same time or transferred when your spouse turns 71.
Both have to be transferred by the owner of the account turning 71. But you can base minimum payments off the younger spouse. Probably makes sense to convert prior to 71 in most scenarios - but let you financial plan decide that.
If you are single without DB and have over $500,000 in LIRA/RRSP, is there a strategy where it may make sense to take more than you need out of your RRSP early and transfer it either into TFSA, if room, or regular investment account in order to save tax for you or your estate later?
Sure is. Saved a client $600k in taxes just this morning doing exactly that.
If I make four withdraws per year from my RRIF can I take the minimum out four times without tax? Example withdraw 16,000 out of a 100,000 RRIF without holding tax. Or is the minimum only once a year and the other withdraws have tax withheld?
Total withdrawals in the year above your minimum will have withholding taxes.
Do you offer on line consulting service ? If so how to contact you
We do all our work remotely. You can learn more at www.parallelwealth.com/planning
My wife has a government pension and I have no pension. If she has me claim up to 50% of her pension cheque does that amount let me claim the $2000 pension credit amount ? - Thanks
Yes
I’m 56 with 1100000 in LRSP. and plan on retiring at 63. Should I start taking out now since my income will be higher when I retire ?
Thx
Depends on your income now and factors in retirement. Have your financial planner build a plan for you - in this scenario it will be money well spent.
Hi Adam,
I am about to initiate an RRSP melt down (I am 58 will be 59 in April); and I am wondering if I have to withdraw money from my RRSPs in $5K increments with 1 or 2 weeks apart to save on income tax or can I withdraw $24K all at once? Thank you!
Well, if you take it out in 5k incrementally the withholding tax will be 10% each time if you take. If you take all 24k in one swoop it will be 30% but don't forget when you do your taxes it will all even out so let's say you took out 24k all at once and paid the 30% withholding but your at actually in a 26% tax bracket, you'd get the 4% back on your taxes. Alternately if you took out the 24k in 5k incrementally you would owe 16% of the total at tax time, as you had paid 10% up front as withholding tax. So yes if you want to take it incrementally you save some withholding tax at the beginning but you pay it later.... in this senario you would have 20% of 24k (4800) less witholding in your pocket gir most of the year wich uou coukd jnvest i guess, for 10 months if uou wanted... seems a hassel to me, now is all this math clear as mud?😉😉😉
@@shannonbarthelette4749 thanks for your advice. I also inquired with my financial advisor and he said that he would also charge $50 each time I withdrew $5K and that it would all equal about the same amount in the end. He also mentioned to me that I would end up not owing any income tax at the end of the year due to my low income.
@@connielapierre1892 wow I never thought of the $50. Don't think banks charge it, they didn't used to. Didn't think about private funds.
@@shannonbarthelette4749 I was surprised to hear of the fee myself but I realize that Banks as well as private companies require pay per service for managing our money as well as being paid by the Bank.
Why I inquired about the melt down of my RRSPs was that I met someone that works for Sunlife and they said to take the money out in increments of $5K a couple days apart to show that they are separate transactions so not to pay a higher withholding tax.
When I discussed this 1 year ago with Liberty Tax he said that I will be paying way more income taxes than what my financial advisor told me.
As you can see I am confused as to whom is advising me correctly as was laid off in 2020 and given a small DB as well as medical benefits as a semi-retired ex-employee.
@@connielapierre1892 Hi, I just transferred my TFSA between institutions and saved th $50. By going to both banks in person. Yes confusing. I was in the industry so I learned all this in detail. Google the combined tax rate for my province and it will give you a approx total tax rate of combined federal and provincial. Remember the 1st 13,000 is tax free and also the first 2000 from a pension plan or rrif. So 15000 is deducted from your taxable jncome. In Bc that will be 20% on the first 41,000 minus 15,000 (personal exemption and pension plan wd) so that is 5200. In taxes on 41000 income. Cheers.
Is there a minimum for the RRIF between 50 and 55 yrs old? I want to start drawing this down beginning at 50 (retirement) and then use CPP OAS and work pension as income after that.
Keep in a RRSP and then no min.
My question is if I have 6,000. rrsp in a bank and I have other rrsp in another institution as I am 64 now, I am allowed to turn that 6,000.into rif this year? And leave the rest as is(rrsp).thanks for the advice.
Yes
My income is 24888.00 do I qualify for GIS
Hi Adam. If you are only pulling income from your RRIF based on the dividends generated each month as your income stream at age 65 ( no other income) would I be correct that based on a 4K monthly withdrawal that the withholding tax would be 30% of 4K for each monthly withdrawal?
No, 10% and remember withholding tax is applied to your income tax at year end, it's like a pre payment. So 4k x 12 months = 36,000 yearly income. In bc the marginal tax rate on income under 41k is 20%, also the first 13k federal an 10k provincial is exempt so of your income is 36k the exception is subtracted from that.
Hello Adam. Saw your video on pension income tax credit. I have a maxed tfsa, maxed rrsp, and non registered accounts. Turning 65 next may, I have had little or no income for the past 10 years. Is there a way for me to benefit from the pension tax credit?
Very little would qualify before 65 - so look to utilize the credit next year when you turn 65.
@@ParallelWealth Adam, I understand I have to wait until 65 to claim the pension income tax credit. My question is, I only had CRA-taxable income of approx. $6500, upon which I did not have to pay income tax. My question is, for tax year 2022 (given I will turn 65 on May 4th, 2022) can I claim the PITC if I have no taxable income to apply it against? I'm planning to take OAS and (hopefully) GIS at 65, and wait with CCP until 70. Your thoughts? Thanks!
@@hildabaumhard9c106 FYI: RRSP is a registered account. You have 1st $13,000 NO income-tax every year at any age
This is what I did to save some tax $ is instead of receiving a monthly income from my RIF's, I withdraw the required minimum in one lump sum in December. Any income earned is tax protected for almost a year.
How much do I draw out from RRSP into rrif to withdraw a minimum $2000 from rrif to benefit from pension tax credit of $2000 if I'm 57 years old and on the way to retire
Mei, you just need to move $2,000 to your RRIF and then redeem it. There will be a 10% withholding tax over the minimum RRIF amount, so left with just over $1800 in your pocket. Depending on your tax rate you could get back your withholding tax and you get the full tax credit on the full $2k redemption.
Hi Adam, is there any advantage to converting a portion of RRSPs to a RRIF before 65? I realize there’s no withholding tax on the minimum required withdrawal, but I don’t see this as a benefit. I’d rather pay a withholding tax and potentially see some or all of it back later. Thanks!
If you aren't concerned about the withholding tax then wait until 65.
@@ParallelWealth thanks!
Hi Adam, thank you for your videos. Are there strategies to avoid RIFF withdrawal fees. ie. fewer withdrawals or not changing the withdrawal amounts. To be clear, I am not referring to taxes but fees to be paid. Could this be something that you could provide a video on. Thank you for making these informative videos.
RRIF should not have fees. If you are being charged withdrawal fees on your RRIF it's time to move the money elsewhere.
@@ParallelWealth Thank you! I am not there yet, just looking at options of melting down the RRSP first or converting to a RIFF. I was reading that ...There is typically a fee charged on every RRSP withdrawal. These RRSP withdrawal fees are called “partial deregistration fees” and they can range anywhere from $50 to $100+ depending on the financial institution.
I love your sessions. Can you maybe do a session on what affect the possible China invasion of Taiwan will have on our retirement investments? Thank you!
I am retiring in about a month and have a defined benefit pension, cpp and oas, along with about 100k in an rrsp. What would you suggest l do with the rrsp. Should l convert it to an RRIF or just draw out a certain amount from my RRSP. I really don't need the extra money so should l just leave it till 71?
It all depends on your DB pension amount. If you don't need money from your RRSP and fall into a higher tax bracket then I would wait until 71. If you can draw out slowly over next 10+ years in a low tax bracket then look to do that. Happy to connect by phone if you want. We offer fee for service planning, which would be valuable in this situation to make the right choice moving forward.
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If you are getting income from a RRIF and you are not 65 yrs old, can you still get the Pension income tax credit?
Only over 65 for RRIF