Even more unfair is because I have saved my money, invested well, I am no eligible for Old Age Pension because I make too much money. By the way, I am a happy single guy
My approach is to wait until December to pull from my RRSP. I buy a tax program. I then enter my taxable income and see how much room I have before the next tax bracket. Then that is what I pull from my RRSP. This way I can draw down my RRSP at a lower tax rate. Because I pull my money out of the RRSP in December the withholding amount is for a short period of time.
I am retiring in another year and plan to do the same thing. I will have a DB pension and I plan on analyzing all my total income by December of the year and then decide what is the "top up" needed from the RRSP to maximize my RRSP meltdown but at the same time keep me out of a higher tax bracket. I wont know what that amount is until the end of the tax year. If I only do one withdraw a year, that $50 fee to withdraw is not much in the grand scheme of things....
Good timing, as I just met with my wealth manager today regarding my portfolio now that I am retired on this very same topic! Thank you for another great, comprehensive and helpful video!
Timely and excellent video. I was working on my first RRIF withdrawal the same day i watched.. I decided to make more than one withdrawal under $15K to limit withholding tax. I'd rather owe than be owed at tax time.
Thank you, great timely information. My wife is looking to draw income from her rrsp for the next 7 years until he reaches 70 and starts CPP and OAS , we are thinking of converting about 28% of the RRSP into a rrif to provide predictable monthly income through age 70 as well draw the occasional lump sum from the RRSP to prevent the RRSP from growing much more. Your video is helpful.
Excellent video! I've been planning on retiring for over a year now and read up on everything I possibly could and actually wowed my financial planner. The one thing I didn't know was being able to put a rrif BACK into a rrsp. Ya learned me something there. Oh, and a first year average tax rate of 10-12%? I wish......I have to cut back on expenses BIG time to get to that rate. Thanks again for this info!
The RIF minimum withdrawal amount is calculated from the portfolio's balance as of the end of the previous year. If the value of the securities held in the RIF year over year increases or declines, the the minimum withdrawal amount will reflect this valuation change also. 1/(90-age) x RRIF market value.
Great video. So let's say you want to take out an additional $15,000 ( over and above the RRIF minimum), you would pay 30% = $4,500. What if you made 3 withdrawals on 3 separate days of $4,999.99? Would the bank then only withhold 10% on each withdrawal ( so in effect you would only pay $1,500 instead of $4,500?). If you did this 1st week of Jan you would have use of the $3,000 difference until next April 30th. Is this correct? or does the bank do an additional adjustment when you take out the 2nd $4,999.99 and an additional adjustment on the 3rd $4,999.99 withdrawal to ensure 30% withdrawal tax has been kept on $15K withdrawn in the space of a week?
The biggest mistake was buying RRSP'S. Better to tell kids to put in TFSA and invest. Now Trudeau changed to tax base to 15%, It used to be $500. taken off my $5000.RRSP withdrawal. Now it is $750. off my $5,000. RRSP withdrawal I would never take money from a RIF and put it back into an RRSP.
Thank you for the insight. In order for one to take the best decision, it would have been nice to cover as well the impact of having a RRSP or RRIF on the CPP.
Also if no survivors for the RRIF, to avoid final taxes on a BIG residual balance. Otherwise, half of it could go to the government, instead of your estate.
When you make a RRSP or RRIF withdrawal, the withholding tax must be part of the withdrawal. You cannot pay the withholding tax separately if you have available cash elsewhere. This means you are forced to sell more of your funds in order to pay this tax and then get a tax refund next year. This seems unfair especially if you are forced to sell your investments during a market downturn.
You should, as a senior, have a fairly large portion of your investments in bonds/GIC's. Draw from these and replenish from your equities when equities are up. Don't draw directly from your equities and you won't get stung by selling when the market is down.
Why does our government make governing or money so difficult? Wife and I retired this year and between us have 7 pensions and two separate RRSP accounts. We're doing our estate planning now and thankfully we have a great CFP to guide us through. Investing is not something we're good at. We simply carved off a bit of money from our salaries for many (many) years and kinda forgot about it. Sure adds up over time, but if you don't plan out your consumption of that nest egg, between taxes and inflation, it will get eaten up pretty quick.
Can you please do a video on retiring with debt... maybe you have assets but do still have debt ... how best to decide what to do... liquidate pay off debt or some other plan
Good info. as usual Adam. I just set up a RIF and moved my RRSP holdings into it. Now I get a monthly withdrawal done automatically and for free, deposited into my chequing account vs, paying a $25 (plus tax) fee to do withdrawals manually from my RRSP. The bank allows me to take out the first $15K without tax withholding, then after that, withholds 30% per withdrawal. As you noted in your video, this year will see me with a larger than normal tax refund, as the RRSP withdrawals had tax withheld at 30% on each of my manual withdrawals. Hopefully a little less tax taken out this year so I can keep more $$ in my bank....instead of CRA's.
You shouldn’t have to rif your rrsp at 71 and withdraw at a set rate. You should be able to leave it in your rrsp and withdraw as needed then pay a big tax when you die.
Hello, thank you very much for very helpful video. Due to health reasons, Im retired since 2023. I am turning 62 this year. I have a little RRSP saved , could you please tell me if I can transfer my RRSP to RIF? I have no income except for small amount from company pension and cpp. Thank you very much. Your help is greatly appreciated
When consolidating your RRSP’s into one account, don’t forget that the account is only covered by deposit insurance (CDIC) to a maximum of 100K. Also, if you have a RPP at the same institution, your Pension account and RRSP account are combined and insured to a maximum of 100K. (That was the case as of 2023). Don’t keep your eggs all in one basket as they say.
Hi Adam, great info, appreciate this video ! I am 60 yrs and just retired this year. I have a margin, tfsa and rrsp account. 2/3 my income comes from my margin account from dividends ( not selling anything) and 1/3 comes from dividends ( accumulated all year and put into a cash etf so it makes money while sitting ) from my rrsp. My tfsa is my rainy day fund. What I am doing is melting down my rrsp account into my margin account so I can have more freedom as to what I want . I am moving investments from the rrsp to the margin and the dividends the margin made that year are being used to pay the withholding tax ( 30% , which will end being too much ) so I'll get a refund. I plan to do this only once a year. I will try doing this for the first 2 or 3 years hopefully. What is your opinion? I may at some time have to convert to a rrif and sell investments to pull out the minimum but that day has not arrive.
This is a similar situation to my own where I am living off the dividends from my margin account and melting down my RRSP, moving it into my Margin and TSFA accounts. At age 65 (I am 59), I plan to convert a portion of my RRSP to a RRIF to take advantage of the $2000 pension income tax credit. CPP and OAS will hopefully be deferred until age 70.
This is similar to our plan. I’m melting down my RRSP early to transfer into TFSA and non-registered dividend investments. I’m lucky in that my wife has a good defined benefit pension so we can be more aggressive with other investments. I’ll convert the remainder of my RRSP to a RRIF when we decide to have CPP and OAS kick in.
Too many words to say a little. It’s pretty simple. Also you don’t need to make a $15,000 lump sum withdrawal from RRSP or RRIF. You can take $5,000 a month over 90 days and the source deduction is only 10%.
Thanks for your video. I have a question regarding pension splitting. I am 68 and my spouse is 64 in 2023. If I take out $4,000 in an RRIF IN 2023 and split the RRIF equally at tax time to my spouse would my spouse also get a $2,000 deduction if she is only 64 years of age in 2023.
I have a Quebec LIF and I am 65 years old this year, I thought I have a min and max % allowed for withdrawl(around 7% max) so I would need more than 30K in the LIF in order to withdraw $2000k / year to get the pension tax credit ,,,,,so I could not send 2k/year from RRSP to RRIF and withdraw the $2k to get the tax credit
Very helpful Adam. I do have a follow-up question to your positive response to another query that both a Superannuation pension and a RRIF can be income split. Do both spouses need to be over 65? I am over 65 and plan to convert my RRSP in 2024 to RRIF to income split both my Superannuation pension and RRIF withdrawals with my wife who is not yet 60. Thanks very much.
I have 150k RRSP contribution room. I am contemplating to take 150k from my TFSA and stick into spousal RRSP. This will save me about 45% in tax and my wife, who does not work, can start pulling it out paying 10% after 3 years (2 whole year + 1 week). A return of 35% over 2 years (on a portion anyway) is quite tempting. Other than assuming that I will maintain the same income level in the future, what am I missing here?
After the age of 65 any money taken out of my RRIF will clawback my GIS. Can I apply the 2000 dollar pension income tax credit to prevent the first 2000 dollars from being clawbacked from my GIS???
I don’t think so but maybe Adam can confirm. You may have to strategize based on your scenario - defer RRIF withdrawals to maximize GIS? Note that any TFSA withdrawals will not impact GIS.
Oh look, even when you retire you can't just sit back and enjoy life, you have to do all this juggling to figure out how to best withdraw your money. I guess they want to keep you busy till your lights go out.
Our clients hire us to remove this stress. It's really up to you, take it on yourself or let someone else handle. Sure there is a fee to do it, so weigh the cost and benefit.
Adam very informative video. But, and this is the 30-year editor in me, the word investment is spelled wrong in your graphic when talking about the RRSP and RRIF umbrellas. Again, I learned some new information which I always appreciate.
Hi great content on all your vids. I will be retireing in May 2024 at 65. my question is can i income split with my partner. She is 58 but has no income does not work. do I have to wait till she is 65? Thanks
Dang good question! My wife works part time and I'm the main bread winner. I've been afraid I have to pull too much out of my RRIF and watch it dwindle. Income splitting may be the way to go. Hope you find your answer as well as I and happy retirement!
Turning 65 in 2025, and still planning on working until 70. Is it a good strategy to create a RRIF with say $25,000 (from a RRSP) in 2024 and then withdrawl $2000 from the RRIF in 2025 and claim the pension credit. Even if my taxable income is $100,000, that $2000 would be effectively tax free right?
Transferring the investment instruments from an RRSP to a RRIF is called an “In Kind” transfer. He’s quite correct that, if you don’t have $2K in work pension income, you should take at least a $2K withdrawal from your RRIF after you are 65 in order to use the pension income tax credit.
I received my first RIFF as lump sum this February after I turned 72 in January. Planning to put into my TFSA. I wonder is it better to draw monthly than yearly. I only want the minimum to last my lifetime.
If your TFSA isn't maxed out that is the best place for investment money. It is worth paying for a fee for service planner or CPA to make a plan that works for you.
My wife and I are self employed and over 65 and still working, nolonger paying CPP. We are still contributing to our RRSP's. Can we contribute to our RRSP's and move some monies to a RIF and redraw $2000 and still use the Pension income tax credit, even if we are still contribute to out RRSP's. I forgot to say we are not drawing OAS or CPP and do not any other form of pension income.
I believe it is NOT true that you need to pay the bank (50 dollars you say at minute 1:30) when/ any time you withdraw money from RRSP. The bank only withholds the tax (10%-30%). Am I wrong? If not, then your video is misleading, either by mistake or on some sort of purpose, or it is not fully or clearly explained.
If I turn 65 partway through a year (ie. May) am I eligible for the pension income tax credit in that year I turn 65, or do I have to wait for the following year ?
Very helpful - thanks. Question - If a person converts to a self directed RRIF, is the minimum withdrawal amount based on the initial value of the RRIF OR the value of the RRIF at the end of the calendar year OR ...??????. So, for example, if I converted an RRSP to a self-directed RRIF and it was initially 50,000, but at the end of the year it was 65,000 (including what I needed to minimally withdraw at the 50,000 dollar point), would I pay the minimum IN YEAR TWO based on the INITIAL 50,000 OR the new value of 65,000?
I will be converting an RRSP before the end of the year as I turn 71 in dec. Can I withdraw just 2 thou in dec and then in the new year withdraw the min + required for a year To take advantage of the tax break.
I moved my money recently from my RRSP to a RIF to avoid getting charged a fee for each time I withdrew funds. In the RIF, it's done free and you can setup the frequency of the withdrawals monthly (at least at TD).
At retirement when you pull from a RIFF can we pull the amount in one amount in december or the pull has to be gradually made over the year in order to be able to fragmente it?
Each bank, institution will guarantee 4 $100K GIC investment accounts with CDIC insurance per account holder. You will need to spread your money around and keep tabs on accrued interest for taxes. For $800k you would need to put the money in 2 separate institutions. If you have a spouse, then each of you could have a total of $400k in an investment account at a single institution.
Is there a specific date that I have to withdraw funds from the RIF on the tax year? Can I withdraw Dec 31 of that year so the tax withholding time is kept to a minimum.
RRIF income is eligible for pension income tax credit only if one is at age 65 or over. For spousal RRIF, is the age restriction on the age of the contributor or the age of the spouse who receives the RRIF income?
I have also asked my bank at the maturity date of some funds to reinvest in one account but they day you cannot do that. Is there another way? I understand that RRSP have to be transferred to RIF. But i do not like to withdraw from different accounts. I do not know what to do?
I wonder, what happened if both spouses died, how do you transfer these RRIF acount to your next of kin, without too much tax implication? Does it go into ptobate?
Good video Question...can you do both pension splitting and RRIF splitting? My wife is self employed and as such has no pension. We have been pension splitting for a few years now to reduce my taxes since she has a fair amount of deductions as a result of being a business owner.
Question: If my RRIF is invested in a market that is continually fluctuating, what value amount is used for my minimum payout percentage calculation? Thank you.
Question about the LIFO aspect of attribution….in your scenario if one took $10K out, would only $5K be attributed to the contributing spouse or would all of it? i.e. is it truly LIFO or does each contribution reset the 3 year-ish attribution rule?
Hi Adam, I just did some calculations and would it be possible for you to just confirm my formula based on what I think I understood in this video, I’m not a spreadsheet guru. I’ll be 61 in a few weeks, if I transfer $60K to a RRIF and in 2024 I withdraw $10K. Based on the tax withholding % here’s my math. My exempt amount would be $2070 (age 61 3.45% minimum withdrawal), I would pay 10% taxes on $2930 ($5k- $2070) and 20% on the difference above $5K $2930 and the same would apply for my Quebec taxes but @ 5% and 10%. Total amount after deductions $8458.90. Does this sound right? Thanks for your help.👍🏻
Hi i will retire at 70 . I have too many small amounts of Gics locked into RRSP. These funds are maturing on different dates. How do I put them into when account ?
Some careful planning might be needed to ensure you have the cash in the account, if withholding tax will be applied. It might be necessary to strategize not automatically rolling GICs once their term is up. This will also allow you to “bundle up” larger pools of cash into a new GIC, if desired and meets your cash flow needs. Using a cashable GIC is another option.
I am getting conflicting information about the MAXIMUM amount you can withdraw annually from a RRIF / LIF? It seems to be really clear for minimum but I cannot seem to get really clear information for the maximum. Maybe because the minimum for LIF and RRIF are the same but the maximum is a different rule? We are under 55 if that makes a difference.
@@ParallelWealth Thank you for the quick reply. I have been using the brackets for my LIF already but somehow I thought it was the same for RIF. Thank you for the clarification. Big fan by the way!
Last year I converted one of my RRSP to a RIFF and I am withdrawing the minimum amount. I recently discovered that I no longer need the minimum amount. Is there a way to convert part of my RIFF back to an RRSP so I can reduce my minimum withdrawal amount ? (I am 64).
@@ParallelWealth Thank you for the prompt reply. They informed me it could not be done. I'm reaching out because Parallel Wealth appears to offer excellent content and insights and may be able to advise on the first few steps I need to take to convert part of my RIFF back to RRSP. Any feedback is appreciated.
This guy makes RRSP and RRIP so complicated and they are not, withholding tax is no big deal as you can take out in Dec and let $ there to compound for 11 months!
@@marcelmed4574 "Regardless, you can still invest your monthly withdrawals." This becomes taxable income instead of tax deferred income inside RRIP that you have more options !
Every time I hear "income split", I want to cry as a happily single woman who gets no breaks. However, great upload. I learned quite a bit. Thanks!
The state has a heavy bias against single people. There should an equal rights lawsuit in there somewhere.
I hear you. I remember how my mom's income shot up once my father passed. She paid far more to CRA than she ever lived on.
single income u can claim GIS depend how much u make ?
Even more unfair is because I have saved my money, invested well, I am no eligible for Old Age Pension because I make too much money. By the way, I am a happy single guy
@@jimclarence5441 I would rather have more income and be ineligible than have less and old age, it may seem unfair.....
My approach is to wait until December to pull from my RRSP. I buy a tax program. I then enter my taxable income and see how much room I have before the next tax bracket. Then that is what I pull from my RRSP. This way I can draw down my RRSP at a lower tax rate. Because I pull my money out of the RRSP in December the withholding amount is for a short period of time.
EY has a personal tax calculator for which you can enter income and it will display your tax rate for your province. Could help you.
So does wealthsimple
I am retiring in another year and plan to do the same thing. I will have a DB pension and I plan on analyzing all my total income by December of the year and then decide what is the "top up" needed from the RRSP to maximize my RRSP meltdown but at the same time keep me out of a higher tax bracket. I wont know what that amount is until the end of the tax year. If I only do one withdraw a year, that $50 fee to withdraw is not much in the grand scheme of things....
Brilliant. Thanks for the info!
I will take the RRIF minimum on January 2nd and withdraw the rest of my meltdown amount on December 31st.
Absolutely a great video on RRSP/RIF , Thank you for taking time to spread knowledge .
My pleasure!
Great video as always. I will have to watch it again and take notes. I really appreciate you passing along your knowledge. Thanks Adam.
Glad it was helpful!
These videos are just so incredibly helpful. Thank you Adam!
Good timing, as I just met with my wealth manager today regarding my portfolio now that I am retired on this very same topic! Thank you for another great, comprehensive and helpful video!
Great video! Another possible reason to consolidate accounts is potential reduction in management fees for larger balances depending on holdings.
I really enjoy your videos. I even sometimes go back and view them again and get more out of it that i missed the first time.
I appreciate that!
Great video…thank you!
Adam, you are so informative and gentle . Thanks so much for your much appreciated guidance. Please keep it up. Thanks again.
Timely and excellent video. I was working on my first RRIF withdrawal the same day i watched.. I decided to make more than one withdrawal under $15K to limit withholding tax. I'd rather owe than be owed at tax time.
Better for you to keep your $ and pay later than have it refunded to you a year after it was paid.
Thank you, great timely information. My wife is looking to draw income from her rrsp for the next 7 years until he reaches 70 and starts CPP and OAS , we are thinking of converting about 28% of the RRSP into a rrif to provide predictable monthly income through age 70 as well draw the occasional lump sum from the RRSP to prevent the RRSP from growing much more. Your video is helpful.
Excellent briefing. Thank you.
Excellent video! I've been planning on retiring for over a year now and read up on everything I possibly could and actually wowed my financial planner. The one thing I didn't know was being able to put a rrif BACK into a rrsp. Ya learned me something there. Oh, and a first year average tax rate of 10-12%? I wish......I have to cut back on expenses BIG time to get to that rate. Thanks again for this info!
The RIF minimum withdrawal amount is calculated from the portfolio's balance as of the end of the previous year. If the value of the securities held in the RIF year over year increases or declines, the the minimum withdrawal amount will reflect this valuation change also. 1/(90-age) x RRIF market value.
So informative and helpful. Thank you.
Very informative idea.
Great video. So let's say you want to take out an additional $15,000 ( over and above the RRIF minimum), you would pay 30% = $4,500. What if you made 3 withdrawals on 3 separate days of $4,999.99? Would the bank then only withhold 10% on each withdrawal ( so in effect you would only pay $1,500 instead of $4,500?). If you did this 1st week of Jan you would have use of the $3,000 difference until next April 30th. Is this correct? or does the bank do an additional adjustment when you take out the 2nd $4,999.99 and an additional adjustment on the 3rd $4,999.99 withdrawal to ensure 30% withdrawal tax has been kept on $15K withdrawn in the space of a week?
The biggest mistake was buying RRSP'S. Better to tell kids to put in TFSA and invest.
Now Trudeau changed to tax base to 15%, It used to be $500. taken off my $5000.RRSP withdrawal.
Now it is $750. off my $5,000. RRSP withdrawal
I would never take money from a RIF and put it back into an RRSP.
Thank you, your discussion was very helpful.
Thank you for the insight. In order for one to take the best decision, it would have been nice to cover as well the impact of having a RRSP or RRIF on the CPP.
Thank you so much, i need to learn since im close to my retirement👍❤️
Planning your RRIF is critical to avoiding the tax pitfalls.
Also if no survivors for the RRIF, to avoid final taxes on a BIG residual balance. Otherwise, half of it could go to the government, instead of your estate.
Thank you for the useful info.
Thank you for another very informative video!
Thank you Adam. Good information and you also explained everything very clearly.
Glad you enjoyed it!
Thanks Adam! Great review!
Glad you liked it!
My favourite video so far
Thanks, glad you enjoyed it
Thank you for your advise
Great info Adam, this will definitely help us, I'll be making some calculation 😉👍🏻 Thanks
When you make a RRSP or RRIF withdrawal, the withholding tax must be part of the withdrawal. You cannot pay the withholding tax separately if you have available cash elsewhere. This means you are forced to sell more of your funds in order to pay this tax and then get a tax refund next year. This seems unfair especially if you are forced to sell your investments during a market downturn.
You should, as a senior, have a fairly large portion of your investments in bonds/GIC's. Draw from these and replenish from your equities when equities are up. Don't draw directly from your equities and you won't get stung by selling when the market is down.
Great info, thanks
Thank you ! You’ve explained this so clearly
Good video, can you double check: if you are over 65, line 12900 RRSP gives you the $2000 tax credit at line 31400....pretty sure !
Why does our government make governing or money so difficult? Wife and I retired this year and between us have 7 pensions and two separate RRSP accounts. We're doing our estate planning now and thankfully we have a great CFP to guide us through.
Investing is not something we're good at. We simply carved off a bit of money from our salaries for many (many) years and kinda forgot about it. Sure adds up over time, but if you don't plan out your consumption of that nest egg, between taxes and inflation, it will get eaten up pretty quick.
Hi Adam, could you do a video on RRSP deduction limit and Unused RRSP contributions on Notice of assessment?
Yes I can
Can you please do a video on retiring with debt... maybe you have assets but do still have debt ... how best to decide what to do... liquidate pay off debt or some other plan
Wow, excellent video. You communicated clearly and answered some of the questions I had.
Good info. as usual Adam. I just set up a RIF and moved my RRSP holdings into it. Now I get a monthly withdrawal done automatically and for free, deposited into my chequing account vs, paying a $25 (plus tax) fee to do withdrawals manually from my RRSP. The bank allows me to take out the first $15K without tax withholding, then after that, withholds 30% per withdrawal. As you noted in your video, this year will see me with a larger than normal tax refund, as the RRSP withdrawals had tax withheld at 30% on each of my manual withdrawals. Hopefully a little less tax taken out this year so I can keep more $$ in my bank....instead of CRA's.
What bank is charging you a $25 transaction fee for withdrawals from your RRSP?
@@realticupisicu TD. They don't charge anything on a RIF account, which I've converted to.
@macker0077 I have RRSP with TD as well, and I didn't notice they charged me any transaction fee for withdrawing from it.
@@realticupisicu Suggest you check your RRSP account. It can either come out of the withdrawl amount OR as a separate charge.
I need this video in French please
I’m 28 and I want to do this before retirement age, is it possible or how is the best way to do this?
You shouldn’t have to rif your rrsp at 71 and withdraw at a set rate. You should be able to leave it in your rrsp and withdraw as needed then pay a big tax when you die.
Yes!
Hello, thank you very much for very helpful video. Due to health reasons, Im retired since 2023.
I am turning 62 this year. I have a little RRSP saved , could you please tell me if I can transfer my RRSP to RIF?
I have no income except for small amount from company pension and cpp.
Thank you very much. Your help is greatly appreciated
My agent asked me to convert my rep to a rif. Still waiting. She accused me of trying to get her fired. Now I will be
When consolidating your RRSP’s into one account, don’t forget that the account is only covered by deposit insurance (CDIC) to a maximum of 100K. Also, if you have a RPP at the same institution, your Pension account and RRSP account are combined and insured to a maximum of 100K. (That was the case as of 2023). Don’t keep your eggs all in one basket as they say.
Great video.
Thanks!
If you are with Wealthsimple there are no fees to withdraw so you can keep withdraws under $5000 and only pay the 10% withholding tax
Hi Adam, great info, appreciate this video ! I am 60 yrs and just retired this year. I have a margin, tfsa and rrsp account. 2/3 my income comes from my margin account from dividends ( not selling anything) and 1/3 comes from dividends ( accumulated all year and put into a cash etf so it makes money while sitting ) from my rrsp. My tfsa is my rainy day fund. What I am doing is melting down my rrsp account into my margin account so I can have more freedom as to what I want . I am moving investments from the rrsp to the margin and the dividends the margin made that year are being used to pay the withholding tax ( 30% , which will end being too much ) so I'll get a refund. I plan to do this only once a year. I will try doing this for the first 2 or 3 years hopefully. What is your opinion? I may at some time have to convert to a rrif and sell investments to pull out the minimum but that day has not arrive.
N,uy 16:03
This is a similar situation to my own where I am living off the dividends from my margin account and melting down my RRSP, moving it into my Margin and TSFA accounts. At age 65 (I am 59), I plan to convert a portion of my RRSP to a RRIF to take advantage of the $2000 pension income tax credit. CPP and OAS will hopefully be deferred until age 70.
This is similar to our plan. I’m melting down my RRSP early to transfer into TFSA and non-registered dividend investments. I’m lucky in that my wife has a good defined benefit pension so we can be more aggressive with other investments. I’ll convert the remainder of my RRSP to a RRIF when we decide to have CPP and OAS kick in.
Too many words to say a little. It’s pretty simple. Also you don’t need to make a $15,000 lump sum withdrawal from RRSP or RRIF. You can take $5,000 a month over 90 days and the source deduction is only 10%.
Thanks for your video. I have a question regarding pension splitting. I am 68 and my spouse is 64 in 2023. If I take out $4,000 in an RRIF IN 2023 and split the RRIF equally at tax time to my spouse would my spouse also get a $2,000 deduction if she is only 64 years of age in 2023.
I have a Quebec LIF and I am 65 years old this year, I thought I have a min and max % allowed for withdrawl(around 7% max) so I would need more than 30K in the LIF in order to withdraw $2000k / year to get the pension tax credit ,,,,,so I could not send 2k/year from RRSP to RRIF and withdraw the $2k to get the tax credit
Very helpful Adam. I do have a follow-up question to your positive response to another query that both a Superannuation pension and a RRIF can be income split. Do both spouses need to be over 65? I am over 65 and plan to convert my RRSP in 2024 to RRIF to income split both my Superannuation pension and RRIF withdrawals with my wife who is not yet 60. Thanks very much.
I have 150k RRSP contribution room. I am contemplating to take 150k from my TFSA and stick into spousal RRSP. This will save me about 45% in tax and my wife, who does not work, can start pulling it out paying 10% after 3 years (2 whole year + 1 week).
A return of 35% over 2 years (on a portion anyway) is quite tempting.
Other than assuming that I will maintain the same income level in the future, what am I missing here?
After the age of 65 any money taken out of my RRIF will clawback my GIS. Can I apply the 2000 dollar pension income tax credit to prevent the first 2000 dollars from being clawbacked from my GIS???
I don’t think so but maybe Adam can confirm. You may have to strategize based on your scenario - defer RRIF withdrawals to maximize GIS? Note that any TFSA withdrawals will not impact GIS.
Oh look, even when you retire you can't just sit back and enjoy life, you have to do all this juggling to figure out how to best withdraw your money. I guess they want to keep you busy till your lights go out.
Our clients hire us to remove this stress. It's really up to you, take it on yourself or let someone else handle. Sure there is a fee to do it, so weigh the cost and benefit.
Ya they never rest in Peace even in Retire years...our money..need to scratch head
RRSP to move RRIF
I CAN DO TRADE MARKET. STOCK...
you should always take at least $2000 from RRIF rather than from RRSP as this $2000 is not taxable, line 31400
If you have a spouse regardless of age you should withdraw $4,000 minimum. When you pension split, $2,000 each you both get the pension amount.
Adam very informative video. But, and this is the 30-year editor in me, the word investment is spelled wrong in your graphic when talking about the RRSP and RRIF umbrellas. Again, I learned some new information which I always appreciate.
I'll talk to my editor 🤔
Hi great content on all your vids. I will be retireing in May 2024 at 65. my question is can i income split with my partner. She is 58 but has no income does not work. do I have to wait till she is 65? Thanks
Dang good question! My wife works part time and I'm the main bread winner. I've been afraid I have to pull too much out of my RRIF and watch it dwindle. Income splitting may be the way to go. Hope you find your answer as well as I and happy retirement!
Turning 65 in 2025, and still planning on working until 70. Is it a good strategy to create a RRIF with say $25,000 (from a RRSP) in 2024 and then withdrawl $2000 from the RRIF in 2025 and claim the pension credit. Even if my taxable income is $100,000, that $2000 would be effectively tax free right?
Transferring the investment instruments from an RRSP to a RRIF is called an “In Kind” transfer.
He’s quite correct that, if you don’t have $2K in work pension income, you should take at least a $2K withdrawal from your RRIF after you are 65 in order to use the pension income tax credit.
What if your RRSP AMOUNT has a CAPITAL LOSS? Can you claim a capital loss against it?
Are you still taxed against the amount you withdraw?
Can't claim loss and withdrawal is taxed - since contributions were tax deductible
I received my first RIFF as lump sum this February after I turned 72 in January. Planning to put into my TFSA. I wonder is it better to draw monthly than yearly. I only want the minimum to last my lifetime.
If your TFSA isn't maxed out that is the best place for investment money. It is worth paying for a fee for service planner or CPA to make a plan that works for you.
What if your RRSP has different currencies? Some of my investments are in USD and some in CAD. Do you need two separate RRIFs for each currency?
Can you draw from it and still pay into it at the same time.
My wife and I are self employed and over 65 and still working, nolonger paying CPP. We are still contributing to our RRSP's. Can we contribute to our RRSP's and move some monies to a RIF and redraw $2000 and still use the Pension income tax credit, even if we are still contribute to out RRSP's. I forgot to say we are not drawing OAS or CPP and do not any other form of pension income.
Yes you can, so long as you have available RSP contribution room and it is earlier than December 31st of the year you turn 71.
so if li draw money from my rrsp I cannot income split this money, however if it was from a rrif I could?
what if Non Registraded account when pull out, is it normal Tax ?
I believe it is NOT true that you need to pay the bank (50 dollars you say at minute 1:30) when/ any time you withdraw money from RRSP. The bank only withholds the tax (10%-30%). Am I wrong? If not, then your video is misleading, either by mistake or on some sort of purpose, or it is not fully or clearly explained.
Rrsp withdrawal has a fee at most institutions.
If I turn 65 partway through a year (ie. May) am I eligible for the pension income tax credit in that year I turn 65, or do I have to wait for the following year ?
Can I convert my mutual fund rrsps from one provider which has high management fees to a rrif with another provider with low fee etfs?
Yes, there will likely be a transfer fee, but just ask the current firm what that would be.
Very helpful - thanks. Question - If a person converts to a self directed RRIF, is the minimum withdrawal amount based on the initial value of the RRIF OR the value of the RRIF at the end of the calendar year OR ...??????. So, for example, if I converted an RRSP to a self-directed RRIF and it was initially 50,000, but at the end of the year it was 65,000 (including what I needed to minimally withdraw at the 50,000 dollar point), would I pay the minimum IN YEAR TWO based on the INITIAL 50,000 OR the new value of 65,000?
Min is based on year end value
@@ParallelWealth Thanks!
I will be converting an RRSP before the end of the year as I turn 71 in dec. Can I withdraw just 2 thou in dec and then in the new year withdraw the min + required for a year To take advantage of the tax break.
Can you do monthly RIFF withdrawals and is there a admin cost associated? Thanks and I enjoy the content! Great job!
Should be a charge, and yes you can do monthly.
I moved my money recently from my RRSP to a RIF to avoid getting charged a fee for each time I withdrew funds. In the RIF, it's done free and you can setup the frequency of the withdrawals monthly (at least at TD).
At retirement when you pull from a RIFF can we pull the amount in one amount in december or the pull has to be gradually made over the year in order to be able to fragmente it?
How does one get around multiple 100k CDIC insured GIC RRIF's? ie: 800k RRIF would require 8 institutions
Each bank, institution will guarantee 4 $100K GIC investment accounts with CDIC insurance per account holder.
You will need to spread your money around and keep tabs on accrued interest for taxes.
For $800k you would need to put the money in 2 separate institutions. If you have a spouse, then each of you could have a total of $400k in an investment account at a single institution.
Is there a specific date that I have to withdraw funds from the RIF on the tax year? Can I withdraw Dec 31 of that year so the tax withholding time is kept to a minimum.
Great video. If you can income split your rrif with your spouse then what’s the point of a spousal rrsp?
If you retire before age 65. Only split RRIF 65+
@@ParallelWealth Thank you. I learnt something new today. That’s why your content is so great.
@@ParallelWealthAdam, isn’t it also true that income splitting was introduced long after Spousal RRSPs were established?
@@James_48 I believe it was. But both still exist for good reason.
If a person is still working with a very decent wage 65k assuming you can withdraw a RRIF to pay down a bit debt. What are the tax implications?
Added to your income and pay tax at the marginal rate.
RRIF income is eligible for pension income tax credit only if one is at age 65 or over. For spousal RRIF, is the age restriction on the age of the contributor or the age of the spouse who receives the RRIF income?
Age of owner - so spouse in this case.
I have also asked my bank at the maturity date of some funds to reinvest in one account but they day you cannot do that. Is there another way? I understand that RRSP have to be transferred to RIF. But i do not like to withdraw from different accounts. I do not know what to do?
I wonder, what happened if both spouses died, how do you transfer these RRIF acount to your next of kin, without too much tax implication? Does it go into ptobate?
It would be added to the taxable income of 2nd death. That's why the RRSP meltdown can be so important.
If u r under 70 and change your RRSp to a rrif,
Confirming
You do you need to take the money out that year...?
No, the following year
Good video
Question...can you do both pension splitting and RRIF splitting? My wife is self employed and as such has no pension. We have been pension splitting for a few years now to reduce my taxes since she has a fair amount of deductions as a result of being a business owner.
Yes you can.
@ParallelWealth
Thanks Adam.
Question: If my RRIF is invested in a market that is continually fluctuating, what value amount is used for my minimum payout percentage calculation? Thank you.
Value on Dec 31
Is 55 the earliest one can convert to RRIF? Or there is no age limit?
No age limit
Thanks for the confirmation.
Question about the LIFO aspect of attribution….in your scenario if one took $10K out, would only $5K be attributed to the contributing spouse or would all of it? i.e. is it truly LIFO or does each contribution reset the 3 year-ish attribution rule?
Only $5k
I cannot retire because OAS and CCP is not enough to pay monthly expenses. The fear of retirement is definitely scary thing to happen to me.
Have you not saved any money? RRSP, Pension or TFSA
Yes but if I withdraw minimum that won't be enough and if I withdraw maximum half of the money will go to tax?
Go and seek the advice of any financial advisor
Do you qualify for some GIS?
No
Hi Adam, I just did some calculations and would it be possible for you to just confirm my formula based on what I think I understood in this video, I’m not a spreadsheet guru. I’ll be 61 in a few weeks, if I transfer $60K to a RRIF and in 2024 I withdraw $10K. Based on the tax withholding % here’s my math. My exempt amount would be $2070 (age 61 3.45% minimum withdrawal), I would pay 10% taxes on $2930 ($5k- $2070) and 20% on the difference above $5K $2930 and the same would apply for my Quebec taxes but @ 5% and 10%. Total amount after deductions $8458.90. Does this sound right? Thanks for your help.👍🏻
Would be 20% on full amount above min RRIF
@@ParallelWealth Thanks Adam 👍🏻
Hi i will retire at 70 . I have too many small amounts of Gics locked into RRSP. These funds are maturing on different dates. How do I put them into when account ?
Some careful planning might be needed to ensure you have the cash in the account, if withholding tax will be applied. It might be necessary to strategize not automatically rolling GICs once their term is up. This will also allow you to “bundle up” larger pools of cash into a new GIC, if desired and meets your cash flow needs. Using a cashable GIC is another option.
If you are under 65 and have pension income can you deduct the $2,000 on your taxes?
Pension Income Tax Credit only starts at age 65
ops i used it last year @@ParallelWealth
If you withdraw minimum RRIF monies, would you put it in your TFSA? No taxes ?
You pay tax on any RRIF withdrawal unless you have no other income.
Even on the minimum percentage withdrawal?
@tomvanleeuwen3914 correct, any RRIF withdrawal is part of your income for that year. Just no withholding tax on min.
I am getting conflicting information about the MAXIMUM amount you can withdraw annually from a RRIF / LIF? It seems to be really clear for minimum but I cannot seem to get really clear information for the maximum. Maybe because the minimum for LIF and RRIF are the same but the maximum is a different rule? We are under 55 if that makes a difference.
No max on RRIF. LIF is based on value at year end and age. Google the brackets.
@@ParallelWealthActually, the max is 100% of the balance in the RIF (LOL)
@@ParallelWealth Thank you for the quick reply. I have been using the brackets for my LIF already but somehow I thought it was the same for RIF. Thank you for the clarification. Big fan by the way!
Last year I converted one of my RRSP to a RIFF and I am withdrawing the minimum amount. I recently discovered that I no longer need the minimum amount. Is there a way to convert part of my RIFF back to an RRSP so I can reduce my minimum withdrawal amount ? (I am 64).
Yes you can, just speak to wherever you hold the accounts
@@ParallelWealth Thank you for the prompt reply. They informed me it could not be done. I'm reaching out because Parallel Wealth appears to offer excellent content and insights and may be able to advise on the first few steps I need to take to convert part of my RIFF back to RRSP. Any feedback is appreciated.
Can a RRIF be opened before age 65?
He answered this a couple of comments earlier. No age limit.
Great video Adam : can you create a riff each year and claim the $2000 dollar tax deduction or is it a one time thing?
It's an annual deduction
Is the ATB better than the big banks?
What happens when I withdraw an rrsp that’s lost value in a self guided investment account? Say down 25%.
This guy makes RRSP and RRIP so complicated and they are not, withholding tax is no big deal as you can take out in Dec and let $ there to compound for 11 months!
@@marcelmed4574
"Regardless, you can still invest your monthly withdrawals." This becomes taxable income instead of tax deferred income inside RRIP that you have more options !