Adam, I can understand your suggestion to consider deferring CPP and OAS from 65 to 70 yrs of age and during that time "drawing down" the RRIF to reduce about 85% of the amount because by the end of ones life the CRA will take 50% of RRSP or RRIF's as taxes. Might as well defer cpp and get the 8.4% return per year until 70 and then get a larger cpp sum at that point compared to if one took cpp at 60 or 65. Using up the RRsp or rrif so that you pay less Estate tax and more money gets into your pocket to use sooner rather than later. Great planning...will be difficult to adjust to selling stocks in RRIF to draw down the RRIF account after years of building it up...but...knowing that cpp and Oas income will start at 70 makes financial planning psychology a lot easier for the shift. Hope a lot of Canadians get to listen to your vids...so many are not aware...I keep sharing your channel....I see you reached 60 k in subscribers...and now another increase of .1K....very happy for you and your team ⭐️💯⭐️🇨🇦 Shout out to the editing department as well. Concise and to the point presentation...and when you put the visuals in....top notch stuff!👍
My investment advisor suggested taking CPP at 60 because I retired early at 54. That means I have a significant increase in non contribution years, plus my low income years of 18 to 24. I would be taking a hit on CPP because of that. I also have a bridge benefit on my pension until 65 . I can take my CPP at 60 and invest it. That's roughly 45,000 before 65. I would like my money during my Go Go years.. plan correct and your money will last until death.. remember CPP is also taxable.
@@garth217 Interesting and good to read how people have different financial situations. All good. Yes, Cpp is taxable, and so is OAS. Good point. I wasn't aware that a person could have both the bridge in a pension and taking CPP at the same time? IF so then bravo for figuring out the best way for you. ✔️👍 I guess Adam explained that deferring Cpp gives an 8.4% annual return each year you deferr. I too invest in the stock market and there was a time when 8.4% annual return was more easily to attain, but not now a days. At least for me who picks safe divvy paying companies. Lets enjoy our Go Go years especially now that the pandemic is less threatening💯😀
I'm doing that as well. I'm retired but wife is still working until she turns 65 next year, and I'll be 67. We're deferring CPP/OAS until I'm 70, she's 68, and the result is a guaranteed combined income stream of about 53k in today's dollars, critically, indexed to CPI. To bridge that sum when my wife quits, I''ve moved a couple hundred from my investment accts to two EQ Bank deposit insured RRSP savings accts, enough to draw from to fully bridge the CPP/OAS amounts to age 70, with 5%+ inflation adjustments included if necessary. This means I can depend on the CPP/OAS guaranteed amount straight away when she retires because the bridging source is a deposit insured liquid account. I have a modest DB pension as well, and investment income will only make up about a 3rd of our income stream, totaling about 120k/year. If my investments drop massively and I have to reduce withdrawals by, say, 50%, this is only works out to about a 15% net pay cut, and we'll have a decent baseline pension income that is CPI indexed. This strategy has made me much more relaxed.
@@MegsCarpentry-lovedogs Everyone has slightly different circumstances. My pension is adjusted to inflation . I'm aware of the increase in CPP if you delay, but in my circumstances the increase in CPP by the delay is partially offset by the increase in non contribution years. Again the increase in CPP may also put me in OAS clawback in later years. I'll be drawing on my RRSP as well. That will be Go Going early because at the end of the day you don't know when you will get the call that closes out your time on earth.
@@garth217 Yes Scott, "the call!" You are clever to be aware of the OAS clawback. Starts with when your net income is $79,054 or higher in 2021. Adam talked about this as well. You have that off set of non contributory years to consider. Interesting. It is like playing a game of strategies with the unknown of that "call" eh! We do what we can with the info and psychology that we have. One step at a time as we process everything and what is best for our individual circumstances. Happy planning and enjoy your early retirement...its awesome😀
Converted my RRSP to a RRIF in January at age 57. It could not have been more simple. I’d de-risked part of my RRSP to cover two years of withdrawals. I’m with a ‘Big Bank’ but happily pay zero in de registration fees. The monthly amount is deposited to my account with my pension like clockwork. The only thing I would do differently is that I closed my RRSP at the same time - not sure if that’s automatic - knowing I would have earned income in ‘21 and generated RRSP contribution room for ‘22. Now I’m opening up an RRSP again. My recommendation would be to leave a small amount in the RRSP and leave it to one’s 71. I’m young enough that I have no idea whether I’ll have earned income between now and my 71. (And generate additional RRSP space.)
That was very good information on what one can do with a LIRA when the time comes but what I need to know first is how residency affects the process. In particular, if one transfers a LIRA to a LIF (@71 years of age) then ends up moving to the USA the next year say , what happens to the LIF, do things continue as normal ( ie you continue to take your yearly withdrawals (@25% tax rate) ) or is one forced to close the LIF and take a lump sum payment (@25% tax rate) much like you would do if you were already a US resident at the time you turned 71. Trying to avoid the lump sum payment @25% tax rate if at all possible.
I just converted my lira to a lif and was told that I couldn’t take an income till next year according to the government, do you know why this is or is Questrade telling me the wrong information
Here's a question I've always been curious about for anyone out there who may be able to answer. If you have a bunch of stocks or etfs in a RRIF account and no cash, how is the required minimum withdrawal made? Does something automatically get sold or is there a plan in place for this situation when the account is created? Looking forward to hearing back. Thank you all.
Good question.....l'm assuming if you didn't have it in cash and had it in stocks or ETF's then there would be selling costs as well each month.....and what gets sold?....who determines that?.....or do you just sell and leave in cash what your expecting to withdraw for the year....one sell cost instead of 12?
I have this question also. I’m hoping to turn off my DRIPs about a year before retirement so that there’s enough cash flowing in to cover the minimum withdrawals, at least for a while, but what if there isn’t?
@@James_48 I turned off all DRIPS in January 2022. I'm generating all cash. I plan on taking out 70% of it and of that 70% (15k) there will be a 30% withholding tax. My Govt pension will round that out and I plan on only using TFSA if needed, that is cash generating non drip as well. My retirement date is Jan 2023 so as you mention, good to have cash flow and not be forced to sell stocks in a downturn
Hi. I watched your videos but have a question. I converted my company RSP to a LiF. When you unlock 50% can you transfer to a non taxable account like TFSA or does it has to be only in a Riff? Thanks
Would you able to go a little specific on pension plans (rpp) ? Are they any different from rrsp regarding transfers (between government jobs or transfer out to regular bank or transfer out when 65).
Adam, I have a question about RIF withdrawals/payments . I haven't converted my RSP to a RIF yet but before I do in 2 yrs time, I want to ensure I have enough cash in the cash portion to make the payments . I have my funds in shares & the dividends reinvested. Should I stop my Dividend Reinvestment Plan (DRIP) now or a year before? My current annual dividends wouldn't be enough to fund the annual minimum withdrawal amount in 2-3 yrs time. Or would it be better to wait & sell shares on an as required basis? Thank you. The videos have been very informative.
Im 60 years old and I have a lira. I live in ontario. Can I move the money from a lira directly to a rrif and what would the tax implications of that. Second question can I move the money to a lif at age 60 then maybee at age 65 can I move the rest of money in lif to a rrif. Thanks
Thanks for the video Adam. I have a US$30K Ontario LIRA. Say I want to move all the funds into my RRSP. but I don't need the income yet. Tell me if I have this right: First, at the age of 55, I can to convert the LIRA to a LIF. Second, (within 60 days) I can convert 50% of new LIF assets to my RSP. Third, given my residual in the LIF is below 40% of YMPE, I should be able to move the residual LIF assets into my RRSP (and close LIF)?
I have about 300K in Alberta LIRA, i am turning 50 early 2025, please advise the best step i should take, i want access to maximum amount out of 300K. Thanks
Excellent video! Clarified this very simply! :). Two quick questions: What happens if your RRSP is maxed out? In the unlocking process where you move 50% of the LIRA into the LIF, where else could you move the other 50% of your LIRA? Also would you be able to draw on both halves if your province permitted this? E.g. for a 100K LIRA, could I draw on 1) The maximum % (6.51% in Ontario) and say 5% of the other 50% from the other fund holding vehicle? Thank you kindly :)>
The part that you can unlock has to go to RRSP/RRIF. From there you can draw up to the max from the remainder of the LIF and whatever you want from the RRSP/RRIF
@@ParallelWealth oh, okay, got it! So it doesn't matter if my RRSP no longer had contribution room prior to the transfer from the LIRA, we could still transfer to it regardless of the contribution room? Else if the contribution room is an issue, I'm not sure where else I could put the other 50% :).
Here's a dilemma for you. I opened a LIRA in 2014, transferred company pensions from the UK into an account approved by UK tax authorities (hence no tax withheld in UK). Declared it as foreign income, 60(j) receipt issued allowing full amount to be deductible. I live in Ontario. Thought it would be considered an Ontario LIRA. But is it? Is it an Ontario LIRA or Federal or neither? I ask because the CRA's Registered Plans Directorate say it's provincial whereas FSRAO (Ontario's financial authority) says it's not under the Ontario Pension Benefits Act because the funds were accrued from employment outside Ontario. So, if federal law doesn't apply and neither does provincial, what law in Canada does? Bizarrely the bank where the account is held say the legislation covering it is UK. All of this arose because the bank wants me to move the account and say it can only go to another account approved by the UK (there are only 6 now in Canada). I wrote to the UK tax authorities and got a very clear summary in writing - I can move it to another non-approved account and I would face no UK tax charges because I satisfy the UK's "5-year residency rule". So now I'm thinking I have to take the bank to court to move the account, which is odd since they asked me to move it. And then go in front of a judge to explain that Canadian law doesn't apply in Canada! Basically both the bank and Ontario's regulatory authority must have it wrong, but as a lone customer I have no power here.
I am 65 years old my company pension I am trying to send to a bank for Lira and lif account bank saying its good to invest in mutual funds by the way its federal pension what should I do
I am currently working and am 56. I have a Lira around 60k. Could I move it to a LIF now and get monthly payments in which I just put into my RRSP so I don't get taxed on it while I am working still so I can start to draw it down by moving into my RRSP?
For the unlocking portion can you transfer in kind to your RRSP or does it have to be cash? Is the unlocking amount also impacted by remaining RRSP contribution room or is it just added to your existing RRSP account?
A LIRA is an account that results from leaving a company where your employer contributed to a pension plan (and likely you did also). You cannot contribute anything to a LIRA account but you could continue to contribute to an RSP account, assuming you have contribution room. The limits for contribution to the pension plan are calculated based on RSP contribution room. Typically, it’s 18% of income but there are annual maximums. You cannot have more funds contributed to a defined contribution plan than your RSP limit would permit. Your employer manages this to make sure you don’t over contribute, but you have to make sure you don’t over contribute into an RRSP beyond that.
@@James_48 Thanks. My situation is that I am about to retire medically but almost at the point where I can retire regularly (55). My rrsp are maxed and I can pull my pittance (13 years) of a defined benefit pension if I quit before 55. I look at the info from my plan and half goes to a lira, rest is income and will be taxed. No room in rrsp. So, I would like to Lira it all but loosing half is crazy. Am I getting the stock answer from these guys of half and half? By the way, I intend to get a professional read on my retirement but wanted to get my numbers solid before talking to someone. Too many variables and this is one. Thats where my question came in.
@@jeffho1727 do you not have the option to just leave the pension where it is? It could be the better choice especially since it sounds like you have a decent RSP account. Commuting the pension, which I think is what you’re describing, might not be the best choice because of the tax implications you are describing. Trying to do that in a year where you wouldn’t have other income might really help (e.g. next year?)
@@James_48 Thanks, I think that taking is the best. We only have the options of resigning a day short of 55 and taking the commuted value or entering the pension plan. I think Im doing the right thing, the LIRA implications was an unknown quantity for me. Hate leaving things on the table so knowing all my options is best as always.
I’m not certain but I think you’d either have to create the LIF first, and then move it to the bank or move the LIRA to the bank and then create the LIF account.
@@CanadianBi-WeeklyInvestor it is a pain in the butt process to move to RRSP....too many red tapes..suggest waiting at 65 to convert to LIF to claim 2k Pension income credit and pension splitting
@@pwong0227 Mike Bailey may very well have another pension plan at his new employer that would give him the ability to claim the $2K pension income credit prior to age 65, so might be worth the red tape to transfer to RRSP at 55 if he can.
What happens if you live in Quebec with the unlocking rules at 0% and you move to Ontario before you convert to a LIRA or LIF, do the unlocking rules of Ontario apply ?
I believe the rules pertain to where the account is registered (normally the location of employment) and those rules apply forever - they don’t change if your province of residency changes. This can be confusing sometimes for workers who work in a province that is different from where their home is.
On the same question of Quebec LIRA, there's also a "temporary income" that can be withdrawn, if the LIF you convert to allows it (not all LIFs do)... But is that MY choice when I convert to a LIF? Or is it somewhere in the rules for my LIRA that I cannot convert it to a LIF that allows a temporary income??
I have a RESP for my sons. When they are finished school I hope to transfer any remaining income from the RESP into my RRSP. Is this still allowed if the RRSP has been converted to a RRIF?
You should be able to leave your money in your rrsp as long as you like and withdraw what you feel is appropriate in an particular year not be compelled to withdraw certain percentages each year whether you need it or not.That would give you some flexibility as you get older.
You should be able to leave uour money in your rrsp and be allowed to withdraw funds as needed not as mandated by the govt whether you need that money in any particular year or not. That would be a real self directed retirement plan. If you check out the mandated withdrawl rates especially in the later years by the time you are 90 there is virtually nothing left . Who wants to be broke when you are 90? What kind of a sociopath came up with a retirement plan which leaves you busted when you are 90? I dont know why you dont bring this up on one of your podts. Govt employees keep getting their pensions after 90 and until they die that is gor sure.
Hi Adam, I wish it's that easy. Went to my bank 2 weeks ago and want to unlock my LIF acct so I can withdraw the funds without restrictions but my advisor told me that it takes 2 weeks for this to process. I just talked to him and he told me that he will get back to me next week. By the way, what is TRST27?
@@ParallelWealth Thank you so much for your reply Adam. After my meeting with my advisor, TRST27 and RRIF are the 2 accounts I noticed added under my investment accounts. I am assuming the TRST27 is the name of the account that will replace my LIF account since RRIF will replace my RRSP one day.. I have watched a few of your videos about retirement and never heard you mention about the TRST27 and that is why I wonder why this account name was added under my investment account. Thank you so much for all the informative videos you shared
Thank you Adam for another great video. I was part of a mass layoff at Bell Canada in 2020 and my DC pension plan was released to me. As an employee,we were given an option to take it out get a Lira and go on your own. Another option given was to keep my DC pension with Morneau Shepell, (after it was released to me), the company that handled our DC pension at Bell so that my money will be with other Bell retiress. I chose this option and my DC pension is under a GRRSP , does this mean I am on a Group RRSP? On my account online, it says I can take it out at 55 or 65. And another question is am I able to withdraw the entire amount at 55 or 65 and what would it cost me to withdraw all of it when that time comes as I'm planning to retire back home? Thank you.
The Bell Benefit Pension plan should be able to provide you with all the commuted values at 55 if you are planning to withdraw all the amounts. If not , it will be just another DC pension at 65.
A lira portfolio of 200g 40g in tocc etf 25g in canoe income fund 25g in hyld 25g in Toca 25g in fortis 25g in embridge 25g in hyld.u 10g in vfv Starting today for 22yrs What do u think
If it were me, I’d avoid the higher distribution funds in favour of more growth oriented positions until I retired, only then I might consider switching to the high distribution funds. Totally a personal choice though.
Since my RRSP contribution room had been adjusted according to the pension contributions, would my LIRA to LIF transfer in Ontario be 50% max, or would the max amount be dependent on my current RRSP contribution room? I'm in another DB pension at my current employer, and diy invest in some USD ETFs and stocks in my RRSP, so contribution room is quite small.
Your contribution room in your RRSP has nothing to do with the ability, under Ontario law, to unlock 50% of your LIRA at the time you open your LIF and transfer 50% of your Lira to it and 50% to your RRSP.
Yes, a very important question; rrsp to a rrif...when...how...why? Thanks Adam! Another very relevant topic.👍🇨🇦
Adam, I can understand your suggestion to consider deferring CPP and OAS from 65 to 70 yrs of age and during that time "drawing down" the RRIF to reduce about 85% of the amount because by the end of ones life the CRA will take 50% of RRSP or RRIF's as taxes. Might as well defer cpp and get the 8.4% return per year until 70 and then get a larger cpp sum at that point compared to if one took cpp at 60 or 65. Using up the RRsp or rrif so that you pay less Estate tax and more money gets into your pocket to use sooner rather than later. Great planning...will be difficult to adjust to selling stocks in RRIF to draw down the RRIF account after years of building it up...but...knowing that cpp and Oas income will start at 70 makes financial planning psychology a lot easier for the shift. Hope a lot of Canadians get to listen to your vids...so many are not aware...I keep sharing your channel....I see you reached 60 k in subscribers...and now another increase of .1K....very happy for you and your team ⭐️💯⭐️🇨🇦 Shout out to the editing department as well. Concise and to the point presentation...and when you put the visuals in....top notch stuff!👍
My investment advisor suggested taking CPP at 60 because I retired early at 54. That means I have a significant increase in non contribution years, plus my low income years of 18 to 24. I would be taking a hit on CPP because of that. I also have a bridge benefit on my pension until 65 . I can take my CPP at 60 and invest it. That's roughly 45,000 before 65. I would like my money during my Go Go years.. plan correct and your money will last until death.. remember CPP is also taxable.
@@garth217 Interesting and good to read how people have different financial situations. All good. Yes, Cpp is taxable, and so is OAS. Good point. I wasn't aware that a person could have both the bridge in a pension and taking CPP at the same time? IF so then bravo for figuring out the best way for you. ✔️👍 I guess Adam explained that deferring Cpp gives an 8.4% annual return each year you deferr. I too invest in the stock market and there was a time when 8.4% annual return was more easily to attain, but not now a days. At least for me who picks safe divvy paying companies. Lets enjoy our Go Go years especially now that the pandemic is less threatening💯😀
I'm doing that as well. I'm retired but wife is still working until she turns 65 next year, and I'll be 67. We're deferring CPP/OAS until I'm 70, she's 68, and the result is a guaranteed combined income stream of about 53k in today's dollars, critically, indexed to CPI. To bridge that sum when my wife quits, I''ve moved a couple hundred from my investment accts to two EQ Bank deposit insured RRSP savings accts, enough to draw from to fully bridge the CPP/OAS amounts to age 70, with 5%+ inflation adjustments included if necessary. This means I can depend on the CPP/OAS guaranteed amount straight away when she retires because the bridging source is a deposit insured liquid account. I have a modest DB pension as well, and investment income will only make up about a 3rd of our income stream, totaling about 120k/year. If my investments drop massively and I have to reduce withdrawals by, say, 50%, this is only works out to about a 15% net pay cut, and we'll have a decent baseline pension income that is CPI indexed. This strategy has made me much more relaxed.
@@MegsCarpentry-lovedogs Everyone has slightly different circumstances. My pension is adjusted to inflation . I'm aware of the increase in CPP if you delay, but in my circumstances the increase in CPP by the delay is partially offset by the increase in non contribution years. Again the increase in CPP may also put me in OAS clawback in later years. I'll be drawing on my RRSP as well. That will be Go Going early because at the end of the day you don't know when you will get the call that closes out your time on earth.
@@garth217 Yes Scott, "the call!" You are clever to be aware of the OAS clawback. Starts with when your net income is $79,054 or higher in 2021. Adam talked about this as well. You have that off set of non contributory years to consider. Interesting. It is like playing a game of strategies with the unknown of that "call" eh! We do what we can with the info and psychology that we have. One step at a time as we process everything and what is best for our individual circumstances. Happy planning and enjoy your early retirement...its awesome😀
Converted my RRSP to a RRIF in January at age 57. It could not have been more simple. I’d de-risked part of my RRSP to cover two years of withdrawals. I’m with a ‘Big Bank’ but happily pay zero in de registration fees. The monthly amount is deposited to my account with my pension like clockwork. The only thing I would do differently is that I closed my RRSP at the same time - not sure if that’s automatic - knowing I would have earned income in ‘21 and generated RRSP contribution room for ‘22. Now I’m opening up an RRSP again. My recommendation would be to leave a small amount in the RRSP and leave it to one’s 71. I’m young enough that I have no idea whether I’ll have earned income between now and my 71.
(And generate additional RRSP space.)
Clever financial thinking. Keep up the good work👍
That was very good information on what one can do with a LIRA when the time comes but what I need to know first is how residency affects the process. In particular, if one transfers a LIRA to a LIF (@71 years of age) then ends up moving to the USA the next year say , what happens to the LIF, do things continue as normal ( ie you continue to take your yearly withdrawals (@25% tax rate) ) or is one forced to close the LIF and take a lump sum payment (@25% tax rate) much like you would do if you were already a US resident at the time you turned 71. Trying to avoid the lump sum payment @25% tax rate if at all possible.
Thanks for sharing.
Adam, advice people who keep working by choice?
Thank you Adam for the clear explanation. I did this process (LIF & RIF)months ago and was very simple.
I just converted my lira to a lif and was told that I couldn’t take an income till next year according to the government, do you know why this is or is Questrade telling me the wrong information
Here's a question I've always been curious about for anyone out there who may be able to answer. If you have a bunch of stocks or etfs in a RRIF account and no cash, how is the required minimum withdrawal made? Does something automatically get sold or is there a plan in place for this situation when the account is created? Looking forward to hearing back. Thank you all.
Good question.....l'm assuming if you didn't have it in cash and had it in stocks or ETF's then there would be selling costs as well each month.....and what gets sold?....who determines that?.....or do you just sell and leave in cash what your expecting to withdraw for the year....one sell cost instead of 12?
I have this question also. I’m hoping to turn off my DRIPs about a year before retirement so that there’s enough cash flowing in to cover the minimum withdrawals, at least for a while, but what if there isn’t?
@@James_48 I turned off all DRIPS in January 2022. I'm generating all cash. I plan on taking out 70% of it and of that 70% (15k) there will be a 30% withholding tax. My Govt pension will round that out and I plan on only using TFSA if needed, that is cash generating non drip as well. My retirement date is Jan 2023 so as you mention, good to have cash flow and not be forced to sell stocks in a downturn
Pretty sure you'll have to sell some equities in order to meet at least the minimum payout required each year.
I would think that you are responsible for generating cash by making your own trades.
Hi. I watched your videos but have a question. I converted my company RSP to a LiF. When you unlock 50% can you transfer to a non taxable account like TFSA or does it has to be only in a Riff? Thanks
Would you able to go a little specific on pension plans (rpp) ? Are they any different from rrsp regarding transfers (between government jobs or transfer out to regular bank or transfer out when 65).
Adam - when is the best time to unlock LIRA to transfer to RRSP - as soon as it is allowed like at age 55 (Ontario) or at the retirement time?
I think his last video on LIRAs said asap, as it has a min withdrawal, but also a maximum withdrawal.
I have a DB pension what's best I should do
Adam, I have a question about RIF withdrawals/payments . I haven't converted my RSP to a RIF yet but before I do in 2 yrs time, I want to ensure I have enough cash in the cash portion to make the payments . I have my funds in shares & the dividends reinvested. Should I stop my Dividend Reinvestment Plan (DRIP) now or a year before? My current annual dividends wouldn't be enough to fund the annual minimum withdrawal amount in 2-3 yrs time. Or would it be better to wait & sell shares on an as required basis? Thank you. The videos have been very informative.
Does a RRIF continue to grow hopefully as would the RRSP?
Im 60 years old and I have a lira. I live in ontario. Can I move the money from a lira directly to a rrif and what would the tax implications of that. Second question can I move the money to a lif at age 60 then maybee at age 65 can I move the rest of money in lif to a rrif. Thanks
Do you have to covert LIRA to LIF and RRSP to RIF in same year or can LIRA to LIF happen earlier?
Can be different years
Thanks Adam - is it possible to download an excel sheet like the one you showed earlier on the video ? Thanks
It's part of our planning program. You get it as part of our Financial planning services
Adam, is a DPSP treated like a DCC plan at retirement? Will it also be converted to a LIRA/LIF?
99% of the time. Only once have I seen it go to a RRSP.
Thanks for the video Adam.
I have a US$30K Ontario LIRA.
Say I want to move all the funds into my RRSP. but I don't need the income yet. Tell me if I have this right:
First, at the age of 55, I can to convert the LIRA to a LIF.
Second, (within 60 days) I can convert 50% of new LIF assets to my RSP.
Third, given my residual in the LIF is below 40% of YMPE, I should be able to move the residual LIF assets into my RRSP (and close LIF)?
100% correct. Only slight change would be the 50% unlocking goes straight from LIRA to RRSP, not into LIF first usually
I have about 300K in Alberta LIRA, i am turning 50 early 2025, please advise the best step i should take, i want access to maximum amount out of 300K. Thanks
Excellent video! Clarified this very simply! :). Two quick questions: What happens if your RRSP is maxed out? In the unlocking process where you move 50% of the LIRA into the LIF, where else could you move the other 50% of your LIRA? Also would you be able to draw on both halves if your province permitted this? E.g. for a 100K LIRA, could I draw on 1) The maximum % (6.51% in Ontario) and say 5% of the other 50% from the other fund holding vehicle? Thank you kindly :)>
The part that you can unlock has to go to RRSP/RRIF. From there you can draw up to the max from the remainder of the LIF and whatever you want from the RRSP/RRIF
@@ParallelWealth oh, okay, got it! So it doesn't matter if my RRSP no longer had contribution room prior to the transfer from the LIRA, we could still transfer to it regardless of the contribution room? Else if the contribution room is an issue, I'm not sure where else I could put the other 50% :).
If I set up a LIF this year, can I withdraw the minimum right away for my age(e.g. 65) or do I have to wait till I'm 66 to withdraw the min % at 66?
Here's a dilemma for you. I opened a LIRA in 2014, transferred company pensions from the UK into an account approved by UK tax authorities (hence no tax withheld in UK). Declared it as foreign income, 60(j) receipt issued allowing full amount to be deductible. I live in Ontario. Thought it would be considered an Ontario LIRA. But is it? Is it an Ontario LIRA or Federal or neither? I ask because the CRA's Registered Plans Directorate say it's provincial whereas FSRAO (Ontario's financial authority) says it's not under the Ontario Pension Benefits Act because the funds were accrued from employment outside Ontario. So, if federal law doesn't apply and neither does provincial, what law in Canada does? Bizarrely the bank where the account is held say the legislation covering it is UK. All of this arose because the bank wants me to move the account and say it can only go to another account approved by the UK (there are only 6 now in Canada). I wrote to the UK tax authorities and got a very clear summary in writing - I can move it to another non-approved account and I would face no UK tax charges because I satisfy the UK's "5-year residency rule". So now I'm thinking I have to take the bank to court to move the account, which is odd since they asked me to move it. And then go in front of a judge to explain that Canadian law doesn't apply in Canada! Basically both the bank and Ontario's regulatory authority must have it wrong, but as a lone customer I have no power here.
Hi Adam,
I just turned 50 and I live Alberta. I have some LIRA in my account, would you recommend to convert 50% of my LIRA to LIF? Thanks,
Yes, half will go to LIF and half to RRSP
Do you have clients inmanitoba?
We sure do. And the investment firm we use for many clients is based in Winnipeg too
I am 65 years old my company pension I am trying to send to a bank for Lira and lif account bank saying its good to invest in mutual funds by the way its federal pension what should I do
Interview a few ppl to find a good fit for what you want. Don't default to your bank
They want open rif and Lira account and asking to invest in mutual funds is this a good idea
I am currently working and am 56. I have a Lira around 60k. Could I move it to a LIF now and get monthly payments in which I just put into my RRSP so I don't get taxed on it while I am working still so I can start to draw it down by moving into my RRSP?
When unlocking a LIRA (Ontario) can you move the unlocked 50% to a Spousal RSP or does it need to stay in the same name as the LIRA owner?
No you can't
Is this only in Canada , I am in USA do we have the same process
No
For the unlocking portion can you transfer in kind to your RRSP or does it have to be cash? Is the unlocking amount also impacted by remaining RRSP contribution room or is it just added to your existing RRSP account?
Yes, you ca transfer in kind. You don't have to sell your investments first. It is just added to your existing RRSP account.
What's percentage for withdrawal from RRSP
Will depend on age. Just Google rrif min and it will pop up
I am 65. if I convert my LIRA and RRSP into LIF and RRIF now. Do I have to start withdrawing the money or I can wait another year?
Have to start the year after conversion.
Does a LIRA account have unlimited space?? Always thought it was a function of your RRSP room?
A LIRA is an account that results from leaving a company where your employer contributed to a pension plan (and likely you did also).
You cannot contribute anything to a LIRA account but you could continue to contribute to an RSP account, assuming you have contribution room.
The limits for contribution to the pension plan are calculated based on RSP contribution room. Typically, it’s 18% of income but there are annual maximums.
You cannot have more funds contributed to a defined contribution plan than your RSP limit would permit. Your employer manages this to make sure you don’t over contribute, but you have to make sure you don’t over contribute into an RRSP beyond that.
@@James_48 Thanks. My situation is that I am about to retire medically but almost at the point where I can retire regularly (55). My rrsp are maxed and I can pull my pittance (13 years) of a defined benefit pension if I quit before 55. I look at the info from my plan and half goes to a lira, rest is income and will be taxed. No room in rrsp. So, I would like to Lira it all but loosing half is crazy. Am I getting the stock answer from these guys of half and half? By the way, I intend to get a professional read on my retirement but wanted to get my numbers solid before talking to someone. Too many variables and this is one. Thats where my question came in.
@@jeffho1727 do you not have the option to just leave the pension where it is? It could be the better choice especially since it sounds like you have a decent RSP account.
Commuting the pension, which I think is what you’re describing, might not be the best choice because of the tax implications you are describing. Trying to do that in a year where you wouldn’t have other income might really help (e.g. next year?)
@@James_48 Thanks, I think that taking is the best. We only have the options of resigning a day short of 55 and taking the commuted value or entering the pension plan. I think Im doing the right thing, the LIRA implications was an unknown quantity for me. Hate leaving things on the table so knowing all my options is best as always.
Is it equally as simple to take a LIRA with a group plan provider (like SunLife) and move it to a LIF with a different FI (like a big 5 bank) ?
I’m not certain but I think you’d either have to create the LIF first, and then move it to the bank or move the LIRA to the bank and then create the LIF account.
Question, I have a "Locked In RRSP - Saskatchewan" is that a LIRA?
Yes it is LIRA
@@pwong0227 I look forward to moving those funds to a RRSP in 23 years lol
@@CanadianBi-WeeklyInvestor it is a pain in the butt process to move to RRSP....too many red tapes..suggest waiting at 65 to convert to LIF to claim 2k Pension income credit and pension splitting
@@pwong0227 Good suggestion and yes, that pension income credit of 2 grand is a nice feature.👍
@@pwong0227 Mike Bailey may very well have another pension plan at his new employer that would give him the ability to claim the $2K pension income credit prior to age 65, so might be worth the red tape to transfer to RRSP at 55 if he can.
What happens if you live in Quebec with the unlocking rules at 0% and you move to Ontario before you convert to a LIRA or LIF, do the unlocking rules of Ontario apply ?
I believe the rules pertain to where the account is registered (normally the location of employment) and those rules apply forever - they don’t change if your province of residency changes.
This can be confusing sometimes for workers who work in a province that is different from where their home is.
On the same question of Quebec LIRA, there's also a "temporary income" that can be withdrawn, if the LIF you convert to allows it (not all LIFs do)... But is that MY choice when I convert to a LIF? Or is it somewhere in the rules for my LIRA that I cannot convert it to a LIF that allows a temporary income??
I have a RESP for my sons. When they are finished school I hope to transfer any remaining income from the RESP into my RRSP. Is this still allowed if the RRSP has been converted to a RRIF?
Yes, but I would recommend taking the whole thing out now under your kid's low tax rates and then have way more flexibility.
@@ParallelWealth Thank you
You should be able to leave your money in your rrsp as long as you like and withdraw what you feel is appropriate in an particular year not be compelled to withdraw certain percentages each year whether you need it or not.That would give you some flexibility as you get older.
You should be able to leave uour money in your rrsp and be allowed to withdraw funds as needed not as mandated by the govt whether you need that money in any particular year or not. That would be a real self directed retirement plan. If you check out the mandated withdrawl rates especially in the later years by the time you are 90 there is virtually nothing left . Who wants to be broke when you are 90? What kind of a sociopath came up with a retirement plan which leaves you busted when you are 90? I dont know why you dont bring this up on one of your podts. Govt employees keep getting their pensions after 90 and until they die that is gor sure.
After you convert your RRSP to RRIF, are you still allow to trade stock in your RRIF account. Thanks
Yes
@@ParallelWealth Thank you Adam
Hey, good question....👍
Hi Adam, I wish it's that easy. Went to my bank 2 weeks ago and want to unlock my LIF acct so I can withdraw the funds without restrictions but my advisor told me that it takes 2 weeks for this to process. I just talked to him and he told me that he will get back to me next week. By the way, what is TRST27?
Judith, yes the process will take 2-4 weeks on average. Never heard of TRST27?
@@ParallelWealth Thank you so much for your reply Adam. After my meeting with my advisor, TRST27 and RRIF are the 2 accounts I noticed added under my investment accounts. I am assuming the TRST27 is the name of the account that will replace my LIF account since RRIF will replace my RRSP one day.. I have watched a few of your videos about retirement and never heard you mention about the TRST27 and that is why I wonder why this account name was added under my investment account. Thank you so much for all the informative videos you shared
Thank you Adam for another great video. I was part of a mass layoff at Bell Canada in 2020 and my DC pension plan was released to me. As an employee,we were given an option to take it out get a Lira and go on your own. Another option given was to keep my DC pension with Morneau Shepell, (after it was released to me), the company that handled our DC pension at Bell so that my money will be with other Bell retiress. I chose this option and my DC pension is under a GRRSP , does this mean I am on a Group RRSP? On my account online, it says I can take it out at 55 or 65. And another question is am I able to withdraw the entire amount at 55 or 65 and what would it cost me to withdraw all of it when that time comes as I'm planning to retire back home? Thank you.
Whoosh! That is a very specific situation for a specific answer. Hope you found a way to get clarification.
The Bell Benefit Pension plan should be able to provide you with all the commuted values at 55 if you are planning to withdraw all the amounts. If not , it will be just another DC pension at 65.
@@MegsCarpentry-lovedogs thank you. Adam recently discussed about DC Pension and he had an amazing guest as well 😊
@@pwong0227 Thank you Peter. If you commute the value at age 55, how much do you think will it be taxed?
@@silverrain940 Awesome
A lira portfolio of 200g
40g in tocc etf
25g in canoe income fund
25g in hyld
25g in Toca
25g in fortis
25g in embridge
25g in hyld.u
10g in vfv
Starting today for 22yrs
What do u think
If it were me, I’d avoid the higher distribution funds in favour of more growth oriented positions until I retired, only then I might consider switching to the high distribution funds. Totally a personal choice though.
@@James_48 ok thanks for the response. What would u recommend for a 8.5 percent min return per year for 17yrs
Since my RRSP contribution room had been adjusted according to the pension contributions, would my LIRA to LIF transfer in Ontario be 50% max, or would the max amount be dependent on my current RRSP contribution room?
I'm in another DB pension at my current employer, and diy invest in some USD ETFs and stocks in my RRSP, so contribution room is quite small.
Your contribution room in your RRSP has nothing to do with the ability, under Ontario law, to unlock 50% of your LIRA at the time you open your LIF and transfer 50% of your Lira to it and 50% to your RRSP.