Pension deduction on taxes once a senior... 2K not taxed if taken out of RIF. Provincial pension deduction in some provinces also. Example Saskatchewan 1K tax free
@5:27 You say that at 65 the withdrawal from RRIF qualifies for pension credit. I read somewhere that you can qualify for pension credit from the RRIF withdrawal as early as 55.
@@dianetownsend9813 I got this from Google. "The Pension Income Tax credit is available to you if you are 55 years of age or older. Basically, it enables you to deduct, from taxes payable, a tax credit equal to the lesser of your pension income or $2,000.00. Depending on which province you live in, this equates to $440-$720 in actual tax savings each year." If I'm reading that correctly, anyone collecting a pension from their employer at age 55 and up can claim the credit. So I'm guessing that it is the RRIF that stipulates the 65 or older age for qualification
@@garth217I believe this is true for a defined benefit pension, but not funds withdrawn from a RIF. In order for RRIF withdrawals to be eligible for the pension credit the recipient must be at least 65 years old.
This is not true. As James said, you can use a defined benefit pension as pension income at 55, but not a RRIF until 65. I think this is on the CRA website. RBC also has an article on it that I read. I think I Googled "pension income splitting." I am not sure about LIF's because I wasn't looking for that.
Converting to a RRIF allows your cash to be considered as eligible pension income for income splitting. You also can avoid withholding tax when withdrawing your cash. (You will get taxed on what you withdrew at tax time.) These two things don't happen if your money is still in RRSP mode.
You shouldn’t have to convert to a rif but should be allowed to withdraw what you need when you need rather than being forced to withdraw even when it is unneeded.
You can take your money out instead of a RRIF. Banks are giving you the option. You get hit with withholding tax but at least you get most of your money. But of course the banks WILL talk you into a RRIF.
@@susanmainville510 Except that after you are over 71 you have to rif your rrsp and withdraw money at the rate prescribed by the govt whether you need that money then or not. I think you should be able to withdraw as much or as little as you want in any given year. Now that would be a proper retirement plan.That seems fair to me anyway.
@@jimjackson4256 Man, this is the second time in two days I've found comments of yours making this really bad argument. Leaving money in an RRSP is the worst thing you can do, unless you're cool with your estate getting taxed in half after you die. I truly hope you hire a professional to help you sort through these things because you're clearly not qualified to manage your own retirement finances.
Can you name some good books on this theme with a Canadian focus so people can educate themselves to know if the person they are talking to is knowledgeable or just reading off a script to make a sale?
The earliest age to convert your RRSP to a RRIF is 55. You can however, withdraw funds from your RRSP before that. In both cases, withdrawals count as taxable income.
Hi Marc. Can you address Spousal RRSP/RRIF? My wife and I have personal RRSPs and Spousal RRSPs. Would my wife be the annuitant of my Spousal RRSP (i.e., can make withdrawals from my Spousal RRSP) and I am the annuitant of her Spousal RRSP? Or would I be the annuitant of my Spousal RRSP account which I can melt down along with my personal RRSP account? When I convert my RRSPs to RRIFs, do I convert my Spousal RRSP to a Spousal RRIF or to my new personal RRIF? On the one hand, if I am not the annuitant of my Spousal RRSP, then I would not be able to draw from my new Spousal RRIF? In this case, should my wife convert her Spousal RRSP and roll over the savings to my new personal RRIF so I can draw from my personal RRIF? On the other hand, if I am the annuitant of my Spousal RRSP and I convert it to a RRIF, does it have to be a Spousal RRIF or can my personal RRSP and Spousal RRSP be combined and the savings rolled over to a single personal RRIF? Do I need a Spousal RRIF? Thank you for your insight.
Thank you for your questions! Unfortunately, I can't provide specific financial advice in the comment section. For personalized financial guidance, you can find my contact information here: transcanadawealthmanagement.com/marcsabourin/
overall tough question to answer here, depending on the size of his RRIF, our RRSP's and overall investments, you could have a lot of options. If you have to take $$ out of his RRIF, look to invest that into your TFSA, but remember there could be tax implications!.. If you don't need the $$$, and you are in good health let it grow in the RRIf, however recognize that if something happens to you. CRA will take 50% of his RRIF, and yours!
If you have a RIF or LIF at age 65 and pension split with a younger spouse, can they also claim the $2k pension credit, or do they have to wait until they are 65 to claim?
I won't be able to answer your question in this forum, but I'd be happy to chat more about this. Please send me an email at msabourin@harbourfrontwealth.com
Yes, but not in the calendar year you create the RRIF. Your age (or optionally your spouses age) on Jan 1st only determines the withdrawal rate for each year. The balance of the RRIF on Dec 31 of the previous year times that rate determines the minimum withdrawal amount. On a new RRIF the balance on Dec 31 of the previous year would be zero as it didn't exist yet, just there is no minimum withdrawal required in the calendar year the RRIF is created.
not explained very well...first he says convert rrsps to rif, to not pay withdrawal fee at the source( guess bank fees)....then he recommends withdrawing 2000 from rrsps to convert it to rif to gain pension credit.....so that withdrawal from rrsps of 2000 into rif , every year ... you are charged fees ??? not sure what is he recommending here.... so confusing...
The banks don't normally charge a fee to move funds from an RRSP into a RRIF or a LIRA to a LIF nor do they charge for withdrawals from a RRIF or LIF. You can also move just part of the funds to a RRIF/LIF, though a LIF is more restrictive. Also each move can be to either a new or existing RRIF/LIF. If you already have pension funds (of $2000 or more) coming in from another source then you'd already qualify for the $2000 pension credit. If you don't then it probably makes sense to do. I agree that things were not explained well.
Excellent RRIF presentation ✅
Pension deduction on taxes once a senior... 2K not taxed if taken out of RIF. Provincial pension deduction in some provinces also. Example Saskatchewan 1K tax free
@5:27 You say that at 65 the withdrawal from RRIF qualifies for pension credit. I read somewhere that you can qualify for pension credit from the RRIF withdrawal as early as 55.
Think you must be 65 for pension deduction on taxes.
@@dianetownsend9813 I got this from Google. "The Pension Income Tax credit is available to you if you are 55 years of age or older. Basically, it enables you to deduct, from taxes payable, a tax credit equal to the lesser of your pension income or $2,000.00. Depending on which province you live in, this equates to $440-$720 in actual tax savings each year."
If I'm reading that correctly, anyone collecting a pension from their employer at age 55 and up can claim the credit.
So I'm guessing that it is the RRIF that stipulates the 65 or older age for qualification
@@garth217I believe this is true for a defined benefit pension, but not funds withdrawn from a RIF. In order for RRIF withdrawals to be eligible for the pension credit the recipient must be at least 65 years old.
This is not true. As James said, you can use a defined benefit pension as pension income at 55, but not a RRIF until 65. I think this is on the CRA website. RBC also has an article on it that I read. I think I Googled "pension income splitting." I am not sure about LIF's because I wasn't looking for that.
Great information. Thank you 😊
Thank you!
As soon as you retire pretty simple.
I've subscribed.
At 67 and already converted my RRSP to RIFF, is this a good idea ?
Converting to a RRIF allows your cash to be considered as eligible pension income for income splitting. You also can avoid withholding tax when withdrawing your cash. (You will get taxed on what you withdrew at tax time.) These two things don't happen if your money is still in RRSP mode.
You shouldn’t have to convert to a rif but should be allowed to withdraw what you need when you need rather than being forced to withdraw even when it is unneeded.
You can take your money out instead of a RRIF. Banks are giving you the option. You get hit with withholding tax but at least you get most of your money. But of course the banks WILL talk you into a RRIF.
@@susanmainville510 Except that after you are over 71 you have to rif your rrsp and withdraw money at the rate prescribed by the govt whether you need that money then or not. I think you should be able to withdraw as much or as little as you want in any given year. Now that would be a proper retirement plan.That seems fair to me anyway.
@@jimjackson4256 This is true, and mine will be closed before I reach 71.
@@jimjackson4256 Man, this is the second time in two days I've found comments of yours making this really bad argument. Leaving money in an RRSP is the worst thing you can do, unless you're cool with your estate getting taxed in half after you die.
I truly hope you hire a professional to help you sort through these things because you're clearly not qualified to manage your own retirement finances.
@@Hyperpandas Please don’t comment on anything i write .
Can you name some good books on this theme with a Canadian focus so people can educate themselves to know if the person they are talking to is knowledgeable or just reading off a script to make a sale?
Very informative! Can you please clarify one question. Can one convert RRSP to RRIF at age 50 or sooner?
I’d love to chat some more about this. Please send me an email at msabourin@harbourfrontwealth.com
The earliest age to convert your RRSP to a RRIF is 55. You can however, withdraw funds from your RRSP before that. In both cases, withdrawals count as taxable income.
Hi Marc. Can you address Spousal RRSP/RRIF? My wife and I have personal RRSPs and Spousal RRSPs. Would my wife be the annuitant of my Spousal RRSP (i.e., can make withdrawals from my Spousal RRSP) and I am the annuitant of her Spousal RRSP? Or would I be the annuitant of my Spousal RRSP account which I can melt down along with my personal RRSP account?
When I convert my RRSPs to RRIFs, do I convert my Spousal RRSP to a Spousal RRIF or to my new personal RRIF? On the one hand, if I am not the annuitant of my Spousal RRSP, then I would not be able to draw from my new Spousal RRIF? In this case, should my wife convert her Spousal RRSP and roll over the savings to my new personal RRIF so I can draw from my personal RRIF?
On the other hand, if I am the annuitant of my Spousal RRSP and I convert it to a RRIF, does it have to be a Spousal RRIF or can my personal RRSP and Spousal RRSP be combined and the savings rolled over to a single personal RRIF? Do I need a Spousal RRIF?
Thank you for your insight.
If I have a disabled child, are there any tax strategies that i can use? Im 58 and have $500k between RRSP, TFSA and Lira accounts.
Thank you for your questions! Unfortunately, I can't provide specific financial advice in the comment section. For personalized financial guidance, you can find my contact information here: transcanadawealthmanagement.com/marcsabourin/
My husband passed away and I am the beneficiary to his RRIF.. I am 57 and still working .. what is the best thing to do with his RRIF?
overall tough question to answer here, depending on the size of his RRIF, our RRSP's and overall investments, you could have a lot of options. If you have to take $$ out of his RRIF, look to invest that into your TFSA, but remember there could be tax implications!.. If you don't need the $$$, and you are in good health let it grow in the RRIf, however recognize that if something happens to you. CRA will take 50% of his RRIF, and yours!
If you have a RIF or LIF at age 65 and pension split with a younger spouse, can they also claim the $2k pension credit, or do they have to wait until they are 65 to claim?
I’d love to chat some more about this. Please send me an email at msabourin@harbourfrontwealth.com
Once one spouse hits 65 you can pension split with your spouse. You do need to submit a specific tax form highlighting this to revenue Canada.
Hello and thank you. If you convert a RRSP to a RRIF in any year before turning 71/72, Do you have to draw from the RRIF ?
I won't be able to answer your question in this forum, but I'd be happy to chat more about this. Please send me an email at msabourin@harbourfrontwealth.com
It will pay the minimum based on your age do at age 60 it’s 3.33% of your RRIF balance.
Yes, but not in the calendar year you create the RRIF. Your age (or optionally your spouses age) on Jan 1st only determines the withdrawal rate for each year. The balance of the RRIF on Dec 31 of the previous year times that rate determines the minimum withdrawal amount. On a new RRIF the balance on Dec 31 of the previous year would be zero as it didn't exist yet, just there is no minimum withdrawal required in the calendar year the RRIF is created.
@@haraldsolvberg2699 Thank you. That helps a lot. No with this BARE TRUST thing hanging over head. I want to start filling my mattress.
@@southerncomfort971the bare trusts requirements have been rescinded. Save your mattress.
not explained very well...first he says convert rrsps to rif, to not pay withdrawal fee at the source( guess bank fees)....then he recommends withdrawing 2000 from rrsps to convert it to rif to gain pension credit.....so that withdrawal from rrsps of 2000 into rif , every year ... you are charged fees ??? not sure what is he recommending here.... so confusing...
The banks don't normally charge a fee to move funds from an RRSP into a RRIF or a LIRA to a LIF nor do they charge for withdrawals from a RRIF or LIF. You can also move just part of the funds to a RRIF/LIF, though a LIF is more restrictive. Also each move can be to either a new or existing RRIF/LIF. If you already have pension funds (of $2000 or more) coming in from another source then you'd already qualify for the $2000 pension credit. If you don't then it probably makes sense to do. I agree that things were not explained well.
What are you talking about. Some emigrants never work and get retirement
How? Are you talking about supplemental pension? That’s for some who absolutely fail to plan for retirement in their life.