One other important thing to consider when you draw down RRSP is where that money is going. If you have it invested and you don’t need it for cash flow then it will probably need to be reinvested in a non registered account assuming your TFSA is topped up.
You guys totally rock. I love how you are subtly calling out the sales guys who call themselves "financial planners". I've been studying this stuff for years, and you are genuine. Respect.
I found you during lock down best advice ever! I use your advice with our financial planner especially the strategy of RRSP burn down and yeah! He agreed! Your way of making us non finance types understand is your greatest skill!
Great advice. I really appreciate the comments about financial advisors telling you not to take out your RRSP and taking your CPP instead. That happened to us and in changing over to a new advisor that does financial planning and listening to your video we regret it. Clearly our old financial advisor had a conflict of interest as he was making money even when our investments were tanking.
As someone once said, not everyone needs a financial planner but everyone DOES need a financial plan. For my wife and I we decided to hire a fee based, fiduciary planner and are set.
i'm currently "retired" but not withdrawing from my RRSPs. My wife's income is enough to support us at this point given how Covid has limited activities and travel. So my question is - Can you convert part of your RRSP to a RRIF, draw down on that and convert the rest at 65 so you draw less because you now have CPP and OAS coming in?
Excellent video thanks! There is one piece of information confusing. If you state that most retirees don’t spend enough in the first say 10 years and slow down spending later than why delay CPP later than 60 years old?
th-cam.com/video/bi1SdCGpoZw/w-d-xo.html This video will help explain it. It's all about tax planning around your other accounts. The video we released yesterday also complements the theory well.
I know I love to watch your show and your advice sounds so smart and logical... ¿The question that always runs through my head is.. haven't we already paid taxes on this money ..the RIf's Even the CPP /OAP .¿.. Didn't we pay taxes when we earned it and made the contributions; before it went into the retirement plans, the RSp's etc ..why are we paying taxes again?
@Parallel Wealth I have two holding companies and one of them holds the bulk of our retierment nest egg. Can you do a video on how a person should structure income stream to the two shareholders (me and my spouse). Currently she does not work so it seems she has some room to receive dividends without drawing a large marginal tax rate. I am retiring at the end of 2021. We also both have RRSPs and perhaps we need to draw down on those first?
Ted, way too complex for a video to be honest. Situations like this need a structured plan around your personal situation. Happy to help you with this - or if you have a planner have them put a sound plan in place for you.
Just found you, and subscribed. I am a divorced retired mother of 2. I understand that because I was a homemaker until our younger child turned 7... first 12 years of marriage, I can claim a portion of my ex husbands CPP? Please advise...
My big concern about converting rrsp’s to rrif’s and how much to take out is how it’s going to impact my GIS. I’d like to get all i can out of this evil government. Why do you guys never answer my questions ???
We try to get to as many questions as we can. We run a full time practice and thus don't get to all. We will have more content out on GIS in the future, but it's a very very small percent that qualify so we try to do videos that are for the masses....which this isn't.
I think investors should always put their cash to work, especially In 2025, we'll start to see more market diversification. I'm hoping to invest about $350k of my savings in stocks against next year. Hope to make millions in 2025
Yes true, I have been in touch with a brokerage Advisor. With an initial starting reserve of $80k, my advisor chooses the entry and exit commands for my portfolio, which has grown to approximately $550k.
My CFA NICOLE ANASTASIA PLUMLEE a renowned figure in her line of work. I recommend researching her credentials further... She has many years of experience and is a valuable resource for anyone looking to navigate the financial market..
Great content in all your episodes, many thanks for all your time in financially educating people. Would really like to see an episode dealing with unused contribution room in your RRSP. A scenario could be if you have accumulated say $50, 000 in unused room over the years in your RRSP, can you make a $50, 000 contribution plus your tax year's RRSP amount into your RRSP? In other words, if you make $100, 000 / year can you make it appear that you made $32, 000 for that tax year ($100, 000 - [50, 000 + $18, 000])? What is the best threshold amount to take your income to for a tax year? Again, thanks for creating this TH-cam channel.
You could certainly make it as if you made 32k, though the best strategy is always to decrease your marginal rate, so you will be better off making two 25k contributions in two consecutive years for example.
Hi Adam. Would it make sense (and is it even possible) to setup a secured line of credit just before or after (?) you retire so that if you need a sudden large amount of cash (eg roof, car, trip, girlfriend, etc) that you can borrow at a lower rate than your RRSPs marginal tax rate. And then pay it back at a slower pace… Assuming that you don’t have the cash available elsewhere (TFSA, bank, etc). Asking for a friend… ;)
Yes; if you are financially responsible, it is a fantastic tool. Want to buy a car? Write a cheque. We have had HELOCs on that last 3 houses we owned, and use them like a business current account. We run up a balance, pay it off, run up a balance, pay it off, over and over. If money burns a hole in your pocket however, it'll just get you in trouble.
This is good as a fall back, but we would recommend the HELOC as a tool to invest and make the spread - if it's the right fit for you. You can then write off the interest
@@ParallelWealth this was our thinking. We have a HELOC that is 100% only for investing. We have a second HELOC that is only for purchasing land to build on for retirement (and judging by the price of real estate we won’t be tapping into it any time soon). And we setup a line of credit as an emergency option for the future. It would have to be a significant emergency but I prefer to be looking at it and not looking for it.
This is the best channel I've found in relation to financial planning. Things are explained in language that everyone can understand and apply. I've learned a lot from watching them. I have a financial adviser who has been very helpful but people should really consider using this company. They really have your best interest in mind. And they make money when you are successful.. it's a win win.
1) Withdraw RRSP before 71 could lower the minimum required withdrawal amount after 71; therefore could potentially lower tax rates after 71 (otherwise minimum required RRIF withdraw+ CPP + OAS could push to the next tax bracket), meaning leaving more money to yourself. 2) using RRSP before 71 to fund a person’s lifestyle could resulting in delaying CPP and/or OAS - higher lifetime guaranteed income 3) using RRSP earlier is beneficial in the estate perspective, especially those who are single. Otherwise a huge amount of money will be taxed at about 50%.
Question regarding larger expenses like new roof, driveway, etc when retired and have a home equity line of credit. Have a couple of older uncles already retired and their advice, which was give to them by their advisors, is to use the HELOC for those expenses and only make interest payments until older and sell the house. Sounds sensible to me, not wasting retirement savings on that. Thoughts or already have a video on that?
@@ParallelWealthExcellent, thanks. Can you reply with a link to it once up? And thanks for all the great advice in layman's terms. Didn't know squat about wife's LIRA until I watched your one video on them 👍
@@saintkaufman8113 RRSPs are pretax. The amount you can contribute each year year is driven by how much you earn (work-related) and of course government rules. Starting at 71 (72 at the latest) the government forces you start withdrawing this money so they can start collecting tax on it. Before this step you're forced to convert your RRSP into what's called a RIFF (Registered Retirement Income Fund) by 12/31 in the year you turn 71.
OAS has clawbacks if you have too much other income, ergo, RSP income. The idea is to go into age 71, the OAS date, with your RSPs lower to avoid the clawback
@@raycamenzuli8746 RMD is the U.S. term for minimum withdrawal from their version of RSP. I don’t know the minimum age or rates, but like us they must withdraw a certain amount. I intend to delay CPP until 70 and I’m expecting to withdraw virtually everything from my RSP by about age 71 since CPP is guaranteed and indexed. My RSP is neither.
@@saintkaufman8113 Makes sense. In our plan RSP holders must convert to what is called. RIF at age 71 and start mandatory withdrawals. At 71 the required withdrawal is 5.28% and it gradually escalates to 20% at age 95.
I will only take out some each month from my private pension after 65; when my private LTD benefit ends at age 65 And only if Old Age Security doesn't pan out eh :) Leaving my RRSP until later; keeping average lifespan in mind and my pacemaker and post stroke disability (disability tax deduction qualified)
I am 68 and investing in a new apartment. I need to put a 20% down payment (roughly 80k ) and I am planning to use either my RRSP or Tfsa to contribute 10%. I have a 60k pension income. Do you have any advice on which funds ( tfsa or rrsp) to use? . Thanks very much.
After someone has passed, their estate is responsible for paying off any debts owed, including those from credit cards. The debt does not just go away. Relatives typically aren’t responsible for using their own money to pay off credit card debt after death.
One other important thing to consider when you draw down RRSP is where that money is going. If you have it invested and you don’t need it for cash flow then it will probably need to be reinvested in a non registered account assuming your TFSA is topped up.
You guys totally rock. I love how you are subtly calling out the sales guys who call themselves "financial planners". I've been studying this stuff for years, and you are genuine. Respect.
Haha thanks Rob. Gotta call it like it is.
I found you during lock down best advice ever! I use your advice with our financial planner especially the strategy of RRSP burn down and yeah! He agreed! Your way of making us non finance types understand is your greatest skill!
Love that! Thanks.
Great advice. I really appreciate the comments about financial advisors telling you not to take out your RRSP and taking your CPP instead. That happened to us and in changing over to a new advisor that does financial planning and listening to your video we regret it. Clearly our old financial advisor had a conflict of interest as he was making money even when our investments were tanking.
Sorry to hear Peter
Thanks for the video and your channel. Great advice.
Thanks James!
As someone once said, not everyone needs a financial planner but everyone DOES need a financial plan. For my wife and I we decided to hire a fee based, fiduciary planner and are set.
Spot on!
Our office does a lot of fee for service plans. Great solution for many.
I did that too with nicola.. who did go with? And are you happy? Markets are down.. is your portfolio down?
Thank you for your advice. Making a plan before retirement is very important.
Absolutely!
Great series - very informative.
Thanks Richard
As usual, great tips!
Thank you. Greatest appreciated.
Great vedio , thanks so much
Do you use TFSA to offset Tax level hikes?
New subscriber here, thank you for your informative videos
Thanks for subbing!
Thanks
i'm currently "retired" but not withdrawing from my RRSPs. My wife's income is enough to support us at this point given how Covid has limited activities and travel. So my question is - Can you convert part of your RRSP to a RRIF, draw down on that and convert the rest at 65 so you draw less because you now have CPP and OAS coming in?
Yes you can convert just part of the RRSP to RRIF.
Excellent video thanks! There is one piece of information confusing. If you state that most retirees don’t spend enough in the first say 10 years and slow down spending later than why delay CPP later than 60 years old?
th-cam.com/video/bi1SdCGpoZw/w-d-xo.html
This video will help explain it. It's all about tax planning around your other accounts. The video we released yesterday also complements the theory well.
I know I love to watch your show and your advice sounds so smart and logical... ¿The question that always runs through my head is.. haven't we already paid taxes on this money ..the RIf's Even the CPP /OAP .¿.. Didn't we pay taxes when we earned it and made the contributions; before it went into the retirement plans, the RSp's etc ..why are we paying taxes again?
RRSP provide a tax deduction - so no you haven't paid tax yet!
@Parallel Wealth I have two holding companies and one of them holds the bulk of our retierment nest egg. Can you do a video on how a person should structure income stream to the two shareholders (me and my spouse). Currently she does not work so it seems she has some room to receive dividends without drawing a large marginal tax rate. I am retiring at the end of 2021. We also both have RRSPs and perhaps we need to draw down on those first?
Ted, way too complex for a video to be honest. Situations like this need a structured plan around your personal situation. Happy to help you with this - or if you have a planner have them put a sound plan in place for you.
@@ParallelWealth Thanks, I will look into.
Hi Adam do u have any videos that talk about retiring with a mortgage as I’ll have a mortgage payment built in my retirement budget
I don't specifically Lisa. I'll add to the list tho
Just found you, and subscribed. I am a divorced retired mother of 2. I understand that because I was a homemaker until our younger child turned 7... first 12 years of marriage, I can claim a portion of my ex husbands CPP? Please advise...
Yes you likely can. This kind of detail is usually listed in your divorce settlement.
My big concern about converting rrsp’s to rrif’s and how much to take out is how it’s going to impact my GIS. I’d like to get all i can out of this evil government. Why do you guys never answer my questions ???
We try to get to as many questions as we can. We run a full time practice and thus don't get to all. We will have more content out on GIS in the future, but it's a very very small percent that qualify so we try to do videos that are for the masses....which this isn't.
I think investors should always put their cash to work, especially In 2025, we'll start to see more market diversification. I'm hoping to invest about $350k of my savings in stocks against next year. Hope to make millions in 2025
Yes true, I have been in touch with a brokerage Advisor. With an initial starting reserve of $80k, my advisor chooses the entry and exit commands for my portfolio, which has grown to approximately $550k.
I’ve been looking to switch to an advisor for a while now. Any help pointing me to who your advisor is?
My CFA NICOLE ANASTASIA PLUMLEE a renowned figure in her line of work. I recommend researching her credentials further... She has many years of experience and is a valuable resource for anyone looking to navigate the financial market..
I searched for her full name online, found her page, and sent an email to schedule a meeting. Hopefully, she responds soon. Thank you
Great content in all your episodes, many thanks for all your time in financially educating people. Would really like to see an episode dealing with unused contribution room in your RRSP. A scenario could be if you have accumulated say $50, 000 in unused room over the years in your RRSP, can you make a $50, 000 contribution plus your tax year's RRSP amount into your RRSP? In other words, if you make $100, 000 / year can you make it appear that you made $32, 000 for that tax year ($100, 000 - [50, 000 + $18, 000])? What is the best threshold amount to take your income to for a tax year? Again, thanks for creating this TH-cam channel.
You could certainly make it as if you made 32k, though the best strategy is always to decrease your marginal rate, so you will be better off making two 25k contributions in two consecutive years for example.
Hi Adam. Would it make sense (and is it even possible) to setup a secured line of credit just before or after (?) you retire so that if you need a sudden large amount of cash (eg roof, car, trip, girlfriend, etc) that you can borrow at a lower rate than your RRSPs marginal tax rate. And then pay it back at a slower pace… Assuming that you don’t have the cash available elsewhere (TFSA, bank, etc). Asking for a friend… ;)
Yup. Do it before you retire. We have a video on this. Check our library
Yes; if you are financially responsible, it is a fantastic tool. Want to buy a car? Write a cheque. We have had HELOCs on that last 3 houses we owned, and use them like a business current account. We run up a balance, pay it off, run up a balance, pay it off, over and over. If money burns a hole in your pocket however, it'll just get you in trouble.
This is good as a fall back, but we would recommend the HELOC as a tool to invest and make the spread - if it's the right fit for you. You can then write off the interest
@@ParallelWealth this was our thinking. We have a HELOC that is 100% only for investing. We have a second HELOC that is only for purchasing land to build on for retirement (and judging by the price of real estate we won’t be tapping into it any time soon). And we setup a line of credit as an emergency option for the future. It would have to be a significant emergency but I prefer to be looking at it and not looking for it.
Would it be a good idea to start riffing my rrsps ( moving minimum amount ) to my TFSA while I am still working?
Likely not unless your income now will be less than in retirement.
@@ParallelWealth Thank you !
This is the best channel I've found in relation to financial planning. Things are explained in language that everyone can understand and apply. I've learned a lot from watching them. I have a financial adviser who has been very helpful but people should really consider using this company. They really have your best interest in mind. And they make money when you are successful.. it's a win win.
Thanks Scott. Appreciate the kind words.
Wish travel was easy again
Miss it
I'm new to the channel and have subscribed, great info and clearly explain everything, superb.
Cheers
Thanks Frank. Great handle by the way
Thanks!!! Lol
If your 46 and facing financial hardship can I unlock cpp
No, not until 60.
9
Money is only a tool. It will take you wherever you wish
What benefit is it to me to take it out before 71????
1) Withdraw RRSP before 71 could lower the minimum required withdrawal amount after 71; therefore could potentially lower tax rates after 71 (otherwise minimum required RRIF withdraw+ CPP + OAS could push to the next tax bracket), meaning leaving more money to yourself.
2) using RRSP before 71 to fund a person’s lifestyle could resulting in delaying CPP and/or OAS - higher lifetime guaranteed income
3) using RRSP earlier is beneficial in the estate perspective, especially those who are single. Otherwise a huge amount of money will be taxed at about 50%.
@@hannapiano781 excellent answer!
Question regarding larger expenses like new roof, driveway, etc when retired and have a home equity line of credit. Have a couple of older uncles already retired and their advice, which was give to them by their advisors, is to use the HELOC for those expenses and only make interest payments until older and sell the house. Sounds sensible to me, not wasting retirement savings on that. Thoughts or already have a video on that?
Video coming today on this!
@@ParallelWealthExcellent, thanks. Can you reply with a link to it once up? And thanks for all the great advice in layman's terms. Didn't know squat about wife's LIRA until I watched your one video on them 👍
Are you saying that you SHOULD take all your RRSP out before 71????
@@saintkaufman8113 RRSPs are pretax. The amount you can contribute each year year is driven by how much you earn (work-related) and of course government rules. Starting at 71 (72 at the latest) the government forces you start withdrawing this money so they can start collecting tax on it. Before this step you're forced to convert your RRSP into what's called a RIFF (Registered Retirement Income Fund) by 12/31 in the year you turn 71.
OAS has clawbacks if you have too much other income, ergo, RSP income. The idea is to go into age 71, the OAS date, with your RSPs lower to avoid the clawback
@@saintkaufman8113 Excuse my ignorance but can you please explain a little about RMD's, what are they and how do they work?
@@raycamenzuli8746 RMD is the U.S. term for minimum withdrawal from their version of RSP. I don’t know the minimum age or rates, but like us they must withdraw a certain amount. I intend to delay CPP until 70 and I’m expecting to withdraw virtually everything from my RSP by about age 71 since CPP is guaranteed and indexed. My RSP is neither.
@@saintkaufman8113 Makes sense. In our plan RSP holders must convert to what is called. RIF at age 71 and start mandatory withdrawals. At 71 the required withdrawal is 5.28% and it gradually escalates to 20% at age 95.
I will only take out some each month from my private pension after 65; when my private LTD benefit ends at age 65 And only if Old Age Security doesn't pan out eh :) Leaving my RRSP until later; keeping average lifespan in mind and my pacemaker and post stroke disability (disability tax deduction qualified)
didn't know one existed
Why is there a maximum withdrawal restrictions in a RLIF?
LOL, I know frustrating right?! I have no idea why, but they need to change that.
If you are 46 and facing hardship can u unlock cpp
what is a tax free account?
Watch our very first YT video in our library!
I am 68 and investing in a new apartment. I need to put a 20% down payment (roughly 80k ) and I am planning to use either my RRSP or Tfsa to contribute 10%. I have a 60k pension income. Do you have any advice on which funds ( tfsa or rrsp) to use? . Thanks very much.
If you run out of money, max out all your credit cards, use money wisely. Your credit card dept dies with you! Banks don’t want you to know this.
After someone has passed, their estate is responsible for paying off any debts owed, including those from credit cards. The debt does not just go away. Relatives typically aren’t responsible for using their own money to pay off credit card debt after death.
in case no one else mentions this .. those damn lights in the background are ANNOYING
We get more good comments on the lights than anything else. 🤣🤣