Understanding The RRSP To RRIF Conversion

[@MegsCarpentry-lovedogs]

This was a very important deep dive into RRIF strategies. Bookmarked for future reference. Very well done on the visuals as well 💯to help with those of us who are visual learners. 🙏🇨🇦

[@gordthompson824]

Thanks Adam, good info here. Not sure you really want limit the withholding tax. Depending on your pension income it may not even be enough . I’d rather be in a refund situation than a pay situation at tax time. Gord

[@ParallelWealth]

That just means the government had your money and paid you nothing for it....I would prefer to pay, as long as I know what I have to pay....just a thought.

[@MegsCarpentry-lovedogs]

Yes, Adam, it is a Gordon Pape thought as well. To not let ones money sit in the account of the government while it makes interest, but to have that money in your own pocket or savings making interest and then pay the CRA when it is called for. Our Canadian Gordon Pape years ago taught me this strategy. He suggested to his readers to talk with the employer to NOT have any income taxes taken off each pay cheque. But to be prepared that when tax time comes you might have a big income tax situation, but at least while waiting the money was in your hands either in an investment making dividends or in a savings account making some interest...but the extra money generated was going to you and not the CRA. It takes a bit to get your head around the idea.....and to get used to a bigger tax bill due to one not having ones paycheck "skimmed off" for the government to take its slice every month. ☺📈🇨🇦

[@johnadamsfinancial]

@@MegsCarpentry-lovedogs I would like to know which book from Gordon Pape taught you this. Just so i can get it. Ty.

[@MikeSiemens88]

@rpentry-lovedogs The problem with a bigger tax bill is you may end up paying installments to the CRA for the following tax year. In the end the CRA gets your money one way or another. Despite my RIF payments already having withholding tax for 2023, my 2024 tax bill will have me paying installments in 2024. Seems I'm making too much income in my old age..... a good problem vs being poor but when that 'balance owing' number comes up after completing your tax return it's quite a shock.

[@rc1983]

@@ParallelWealth

[@vannasoukphilavong6996]

I don’t mind taking more than the minimum amount. My portfolio always generates interest.

[@MegsCarpentry-lovedogs]

Noted with thanks. 👍 Bridge benefit ends at 65, then say during age 64 switch RRSP to RRIF to get ready for when age 65 comes along and bridge benefit ends. Then withdraw from RRIF minimum amount , at this point age 65 is 4%, no withholding tax, and work on drawing down the RRIF . Do not take CPP or OAS and when RRIF at 71 has less in the "pot" then start up the CPP and OAS. During this period keep topping up the TFSA and keep investing the money to grow amount from the dividends without touching the TFSA. Less tax for your estate if you draw down as much as possible to eventually 0 in the RRIF because 1/2 of RRIF or RRSP goes to the government as part of the Estate taxes. Yes, indeed! Noted With Thanks. We are so fortunate to have your team help us. Gratefully, Prince Edward Island, Meg, Chiming in....always bookmark your vids to keep referring back to as you update us and reemphasize keep tax planning strategies. 💜🙏

[@HansooKang-k6s]

Isn’t understanding the differences(if any) w.r.t pension income splitting with RRIF vs RRSP more important information?

[@donaldmulrooney942]

Started collecting Quebec Pension at 60, but continued working 5 or 6 months a year, started drawing OAS at 65. Decided to stop drawing EI then, kept working 3 or 4 months a year till 69. Then converted my RRSP to a RRIF and started drawing from it. Never reached any thresholds, and got a nice tax return every year, even got GIS.

[@ralphmortensen7640]

If I only have $6000.00 RRSP DO I still have to convert it to a RIFF, or can I withdraw the entire RRSP without paying taxes? Please respond. Thanks.

[@investmentinrentalproperti2163]

Great video on RRSP->RIF

[@stevephillips5239]

When is the soonest time I can convert my RRSP into a RRIF? I'm looking to retire at 50 or 51. Is this possible to convert it at this age or is 60 the minimum age?

[@ParallelWealth]

Yes, 50 is fine.

[@hozb1]

Can you still contribute to an RRSP if you convert part of the RRSP into a RRIF? Assuming you are under 71.

[@ginocolello4241]

Great video as usual. Thanks Adam and thank you to all people that posted questions and answers very useful information!!

[@ParallelWealth]

Thanks for watching Gino!

[@lizaroberts9167]

Your videos are so informative -- thank you!

[@AMG-BENZ-1]

I would also add that a RRIF withdrawal qualifies for income splitting while a RRSP does not.

[@ParallelWealth]

Past 65

[@tcmazz]

The impression I got was that if you take out $2000 from your RRIF, the entire $2000 will be tax-free as the result of the $2000 tax credit pension income. But digging into this further only 15% or up to a maximum of $2000. So if you take out $2000 RRIF, you only get 15% of $2000 = $300. So, in order to get the full $2000 pension income credit, you would have to show $13333 of RRIF income for the year. $13333 x .15 = $2000 That's not as attractive as it sounds! It's a bit confusing, unless I missed it How come you don't mention the 15% up to a maximum of $2000 Thanks for your reply

[@joebender3662]

You should be able to leave your money in your rrsp as long as you like rather than being forced to take it out whether you need it or not in any year.That would be a real self directed retirement plan.The remaijing balance is taxed at your maximum marginal rate when you die anyway.

[@James_48]

I envision taking the RIF minimum on January 2nd, and the rest of my annual meltdown withdrawal as close to December 31st as possible to minimize the time between withholding tax and refund 😏

[@nickyfurlano8531]

You take the minimum amound at the very end of the year and then at the very start of the next year.

[@James_48]

@@nickyfurlano8531 I'm not sure I follow your strategy Nicky, as I intend to take 2-3 x the minimum (at least) out every year. My guess is you meant this as an "every other year" approach, but that wouldn't work for me, but if I misunderstood your response please share more information on your strategy....Thanks!

[@sorooshd7895]

Can you also make a video on different scenarios of using RRSP & RRIF if you retire earlier than 65?

[@nickyfurlano8531]

Fruitless as you don't qualify for the pension tax credit.

[@brucewiebe6490]

If you have other pension income, say Company pension, then you do qualify for the pension tax credit

[@nickyfurlano8531]

It's the year in which you turn 65 not being age 65 or older for the pension tax credit.

[@BBRubble]

Does anyone out there in the hivemind know what the formula is for withdrawing non-registered funds vs. RRIFs in a retirement plan? I know this is a complicated question because of the variables, but is there a ratio that is generally reliable? Be gentle...

[@ParallelWealth]

Generally speaking, no ratio. Too many variables. The end goal is to level out your average tax rate, while eliminating the RRSP by mid 80s. That's the high level thought process.

[@erikk5992]

Can you make a video about taking CPP and working ? Thanks

[@pattymartin3339]

Just saying, most people don't have 500,000.00 in RSP. Maybe you could speak on the more normal savings of canadains

[@TechPeasant404]

the concept is still the same. the withholding tax of 30% over $15000 and the other points he mentioned are still valid. According to a Ratehub report, the average 65-year-old Canadian has around $129,000 in their RRSP.. had to look it up. that's rather sad. I am unsure what special points need to be changed to make this video more relevant to people with smaller RRSPs

[@pinavescio8937]

Great video! Thank you for the great, useful information!

[@brianhartwick6579]

Your comment on to many RRSP accounts. What if you want to be covered by CDIC as they only cover 100,000

[@ParallelWealth]

If that's a concern, then sure.

[@tracyli1957]

Ask financial institutions about CIPF to cover directing investment up to 1 million if qualifies, even money in RRSP or TSFA, if they are mutual funds, stocks, ETF, CDIC won’t cover

[@jimchen4662]

If someone already has a defined benefit pension income that is =>$2000, it would not increase the pension income tax credit by withdrawing money from RRIF.

[@ParallelWealth]

Correct

[@sc225]

just take out RRSP 5000.00 twice holding Tax 1,000

[@ParallelWealth]

Not always - seen many FI charge 20% on the second withdrawal. Just an FYI

[@roberttaylor3594]

I'm assuming that withholding tax counts towards my total tax when I file...so if the withholding tax is $1200 and my year end total taxes are $2000, I only owe $800.

[@ParallelWealth]

Correct

[@flyawayhorses]

So, if at age 61 I move my RRSP into a RRIF, that transaction does not involve a withholding tax?

[@TechPeasant404]

@@flyawayhorses it technically does not involve moving the money it's just changing the label or "umbrella" as Adam calls it. there is no withholding tax. if you incorrectly withdrew the money from the RRSP and tried to form an RRIF you would lose your contribution room and get a huge tax bill the year you withdrew your RRSP. you just need to contact the institution that holds your RRSP to reassign all or a portion of the RRSP to an RRIF.

[@jamegrabham9992]

That is a great explanation Adam...the $2,000 tax-free pension credit is for all pension income, not just RRIF income...ie. pension from your employee's "defined benefit" pension plan would also qualify...p.s. I really enjoy your channel...

[@DoneByD]

Qualified Pension Income --- For taxpayers who are less than 65 for the entire year: - life annuity payments from a superannuation or pension plan - payments from a RRIF, or annuity payments from an RRSP or from a DPSP, which have been received as a result of the death of a spouse or common-law partner - since tax year 2010, annuity payments from the Saskatchewan Pension Plan (SPP) Many more income qualify for pension credit once you hit 65 years of age... Information taken from tax tips site

[@marksopinionservice]

Very good info. At 2:30, attribution rules were mentioned and the 3-year rule. Adam does this apply to ANY spousal RSP or would there NOT be attribution for an older RSP with no new contributions for 4+ years? My wife has 3 RSPs, only one has received new $ in past 3 years. Thanks!!

[@ParallelWealth]

It's last in, first out. So be aware that you may have older accounts with no deposits, but the new deposits reset the clock in some way. So let's say you put in $5k to a spousal RRSP in the past few years and now are taking out money. Regardless of which spousal RRSP, the first $5k will be taxed in your hands. The only way to avoid this may be to convert to spousal RRIF and just take the RRIF minimum.

[@WhiteRavenBookRook]

….?.? Would this be the same with a locked in savings LIRA and converted to a LiF .. (bc resident.. 7O you this fall..)

[@Dragan-b1t]

Can I ask a question.If you have LIF and RRIF,can banks play,invest that money like they can do with GIC? Also is it true that TFSA and GIC can be open and funds taken away in case of owing money to the government. Thanks!

[@albertiafrate7463]

Nice one Adam. Great vid. My Mum is hoping to save on her taxes for 2024. She converted her physical gold(held in a TFSA account) and transferred it into an RSP. She is 68, and will turn this into a RIF at age 71. Will my Mum help out her T4(meaning less taxes paid to the government) by now having her physical metals in a brand new RSP. This transfer was finalized in November of 2023. My Mum is hoping that this will now be viewed as contributing to an RSP, and will receive a tax rebate for 2024. Thank you Adam!

[@sp90009]

Good info, thanks! I am trying to figure out - what if I partially convert to RRIF at say 52 or 53? Is this even possible? What will be the minimum withdrawal rate? Official and other sources don't cover RRIFs well enough, it appears.

[@shomitadhya6269]

Hi Adam, great video. Question ... my wife is looking to retire after this year. She is in her mid-50s. Plan is to take $48K out from her rrsp each year. If I withdraw $4K/month, every month for next 10 years, I assume withholding rate will only be 10% since each withdrawal is less than $5K (vs 30% because annual is > $15K)? I don't want to convert to RIF yet in case she decides to work part-time in the future. Thoughts?

[@ParallelWealth]

Will be based on annual amount above the min. Likely a higher WH tax, depending on your account size.

[@DoneByD]

@@ParallelWealth There may also be added fees for each withdrawal from RRSP versus no fees on the RRIF.

[@shomitadhya6269]

One more related question to my last Q, if my wife were to withdraw $48K a year, is it worth contributing to the rrsp account (say $5K/year) in order to offset income tax or even generate a refund? (I'll still be working for another 9 years so could keep contributing to her account if it makes sense)

[@ParallelWealth]

Nope. Once you start RRIF no more RRSP deposits unless a large unexpected income

[@shomitadhya6269]

​@@ParallelWealth understood, but what if we left it as a RRSP account in case there are future earnings. Would it be worth it then (to contribute small portion for any taxes from rrsp withdrawl)?

[@theok4712]

Great channel Adam! Enjoy all the strategy and info you share. Do you have a video with people that can live using their dividends and when they should start collecting CPP and OAS?

[@ParallelWealth]

Any of our meltdown videos. Don't focus too much on the dividends, but overall return. You still need to melt down the registered accounts - and ideally front load it to your TFSA if the cash isn't needed.

[@theok4712]

@@ParallelWealth thanks for the reply.

[@psst8795]

Does that $2000 of 'eligible pension income' trigger a clawback of GIS benefits? If so, is it still a preferred strategy to take out the $2K each year from my RRIF, and forego some of the GIS that I would qualify for till age 72?

[@MikeSiemens88]

Thx for the overview as well as the useful links. Answers many questions. Past age 65, currently drawing from RIF while bulk of investments remain in RSP account. All are Mutual Funds that continue to earn income. I reckon I may as well move the remaining RSP portfolio into the RIF at this point. Nearing the age where RSP contributions are no longer an option for me. Even if I contribute, the tax savings are minimal to nil.

[@Frogfrog1234]

Any min age to withdraw from RRIF? 55? Can we do it earlier than age 55?

[@ParallelWealth]

Yes you can

[@vickyminich9029]

Hi Adam. My hubby who is 66 is collecting CPP and OAS only. He has no other pension. Converting his RRSP to a RRIF to take advantage of the $2000 pension tax credit won't help him at all because he pays no taxes due to his low income. My understanding is that he can transfer that credit to me. Can you confirm that? Will it benefit me much anyways if this is in fact correct? I am still working and earning a good income. tx

[@hozb1]

Can you still contribute to an RRSP if you convert part of the RRSP of it to a RRIF? Assuming you are under 71.

[@TechPeasant404]

yes. you can contribute to an RRSP. the RRIF is the only account that is withdraw only. you can even start up a new RRSP up until Dec 31 of the year you turn 71 or hold off converting your existing RRSP to RRIF till dec 31 of that year.

[@hozb1]

@@TechPeasant404 Thanks for the info.

[@alnoormanji4689]

Hi Adam…that you very much for this video. I’d like your view on the following. In 2023, my financial institution allowed us to specify a custom Withholding Tax for the amount withdrawn from RRIF and LIF. My withdrawals are always above the minimum based on my portfolio, age etc as it is now my primary income. In order to avoid paying a large single tax lumpsum the following year, I set my monthly withdrawal with a custom mandatory withholding tax of around 20% to be clawed back through the institution. This is along the lines that monthly smaller withdrawals of taxes benefits from the dollar cost averaging vs waiting for the following year to withdraw the tax lump sum. This year, the institution does not allow for a custom withholding tax to be withheld; it uses the CRA rules of only withholding tax for the amount that is above the mandatory minimum. Their rationale for doing is that they wanted to avoid any liability caused by clients specifying incorrect values in the withholding tax. Rethinking, there is always the advantage of the portfolio growing for the next 12 months without additional taxes being drawn but there is always the possibility that I may have to withdraw the outstanding tax amount as a lump sum next year when markets are down. Alternatively, I could draw down extra than what I need and manage the that extra as a separate tax reserve cash fund. Any guidance please on a prudent strategy to maximize my portfolio and also minimize taxes?

[@pzappa9725]

Hi Adam, you failed to mention that Min amount is calculated once RIF crosses into the next year… I hope watching people did not get impression that Min, tax free amount, gets established and appeasers as soon as the transfer of RRSP into RRIF takes place. Regards, Paweł

[@sunandanarayanan7016]

I have some bank shares in a RRSP, can I convert them into a RRIF?

[@ParallelWealth]

Yes

[@dianetownsend9813]

Withholding taxes are a good idea. If You own the $ on a RRIF. Take out in Dec. Do taxes and any excess taxes are paid back In like May.😢

[@milenkoatkinson4163]

Wow what a great video and so well laid out with simple to follow explanations. All your videos are terrific and clearly demonstrate to me your fiduciary advisor role in ensuring all Canadians have an opportunity to be educated about their retirement. Great work!

[@tracyli1957]

Thanks Adam for great content❤ question: if I transfer RRSP to RRIF at age of 65, do I have to withdraw minimal amount 4% of $200000, that will be taxed for $6000 on top of my income on that year ? If i am still working until 67 and wait to withdraw money from RRIF with low income, would pay less tax? Thanks

[@ParallelWealth]

Whatever you pull from RRIF is added to total income, so if you are still working with decent income then consider just doing the $2k for tax credit

[@DoneByD]

You don't have to move $200K, transfer $50K to RRIF leave the other $150K in RRSP as not forced to move any amount into RRIF till age 71. Now on the $50K RRIF you'll only have to withdraw (4.17% and 4.35% respectively for ages 66 & 67) which will end up being close to the $2000 watermark for the pension credit. This also assumes you don't have a registered defined benefit/contribution pension plan which would be income that qualifies you for the pension credit amount already at any age.

[@tracyli1957]

Thank you

[@DoneByD]

Also like to add @Traveling fish you don't have to make your first withdrawal from a RRIF until the year after it's set up. Assuming because the minimum withdrawal is based upon the previous years Dec 31 balance which is zero in year of set up.

[@christurner2340]

Nice! Exactly what I needed to know. Thanks

[@donmaxwell3020]

Question about Passiv - If I choose the current brokerage I use for some of my registered investments, can I only use the tool to work with those investments or can I also roll other investments into the tool to work with my entire portfolio?

[@yurivasiliev1509]

Thanks much Adam for your extremely helpful videos. Question- can Group RRSP be converted into RRIF directly or first Group RRSP should be converted into Personal RRSP and only after that - to RRIF? Cannot find anything on that matter. Thanks

[@ParallelWealth]

Converted straight to RRIF.

[@MiySadochok]

I'm 68 and I invested 10,000 CAD into RRSP GIC for 5 years. What will happen to this GIC after I will be 71 y.o. ? Thanks !

[@ParallelWealth]

Typically they will pay out the minimum - but just check with the financial institution you invested at

[@DJW007]

So if you’re over 65 and haven’t taken CPP. The RRSP draw-down plan should actually be a RRIF draw-down plan?

[@ParallelWealth]

100%

[@roberttaylor3594]

I'm 60 and I am starting to think I should look at RRSP's instead of TFSA @100%...I like the simplicity of the TFSA, but...

[@nickyfurlano8531]

It's assumed everyone has maxed out their TFSA.

[@darwinreyes3]

Sir RRIF it’s also tax free shelter in investment.

[@Chisyo8]

one more question, can i have the $2000 tax credit at 65 years old for EACH of my pension benefits ( LIF, RRIF and Fixed-term Annuity). In this case, a total of $6K.

[@nickyfurlano8531]

No only a $2,000 tax credit in total. $2,000 is the maximum.

[@FinaISpartan]

By switching to an RRIF, you lose the benefit of growth. This could be a huge disadvantage depending on how early it's done. I personally will not switch to a RRIF until 65, which is when I'm eligible for income splitting.

[@ParallelWealth]

Why do you lose the potential of growth? The investments can stay the same in a RRIF as they are in a RRSP

[@Chisyo8]

If i convert my rrsp to rrif, since there is only a minimum withdrawal requirement, does that mean i can withdraw any amount as my maximum? I know this will result in a maximum (30%) withholding tax. Just wondering if i can do this any amount of withdrwals. My objective is to empty the rrif within 5 years for example.

[@nickyfurlano8531]

Yes y8ou can pull;any amount in a year as long as y8u pull at least the minimum.

[@James_48]

Hey Adam, in that last scenario, where I move $100k to a RIF and leave $400k in my RSP. What happens with the next tranche of RSP -> RIF? Will a new RIF account get created or can the next sum be moved into the existing RIF?

[@ParallelWealth]

Moved to existing RRIF

[@blackninjai]

Is it possible to reinvest dividends in a RRIF? Thx

[@ParallelWealth]

yes

[@blackninjai]

Thx for the response. Asking for my parents who are withdrawing at age 72.

[@dianetownsend9813]

As I have zero RRSP can I set one up convert it to a RRIF the SAME year and withdraw 2K in the same year from the RRIF to utilize the pension deduction on taxes as I'm 'of senior age'

[@ParallelWealth]

If you are under 71

[@mrslcom]

I guess you can minimize the drawback of the withholding tax by withdrawing from your RRSP at the end of the year if possible.

[@ParallelWealth]

Will help a bit. As long as you don't need the cashflow

[@cindymcintosh8727]

If you are 65 and not retired should you begin converting your RRSPs to RIFFs or do you have to wait until you are retired?

[@ParallelWealth]

You can start anytime. But always balance your tax situation...

[@luciat662]

thank you for the info. , much appreciated!

[@g.belanger8302]

Hi Adam. Very interesting video. I'm confused regarding the federal pension income tax credit. When visiting CRA website that talks about this credit (line 31400), it seems to say that an RRSP income IS eligible pension income for the tax credit (amount from form T4RSP box 16 that feeds line 12900). Am I reading that right? If so, then I wouldn't have to convert my RRSP into RRIF to take advantage of this tax credit.

[@ParallelWealth]

Has to be RRIF

[@g.belanger8302]

@@ParallelWealth Many thanks for replying and reconfirming. Much appreciated!

[@piyushgaglani5255]

thank u for letting us know of RRIF at 65 age - can we put just 2000$ in RRIF at 65yrs and take it out tax free ?

[@nickyfurlano8531]

You still have to pull minimum 4 percent at age 65 if the RRIF is a higher amount.

[@scubeedu2]

For a couple who have retired @ age 60, would it make sense to convert a portion of the RRSP and SRRSP to a RIF so that you can take advantage of income splitting that way? Not having to pay withdrawal fees is a bonus for sure!

[@ParallelWealth]

Not splitting, but leveling out income is a huge benefit. Also to start creating a steady average tax rate through retirement.

[@billsnow3469]

I have a DB company pension. The $2k tax exempt rule still apply to my riff

[@TechPeasant404]

you get a total of a 2k tax credit each year. it is not multiples of the 2k tax credit if you have multiple accounts. if you have DB payments you can claim this tax credit even if you are under 65. (I'm starting mine in 2 years at age 50) the RRIF you have to wait till the year you turn 65 (not your actual birthday) for the tax credit if you don't have a DB to claim it with first. also you can hold of converting your RRSP to RRIF till Dec 31 of the year you turn 71 not just your birthday.

[@mikewatson2034]

Great video on this topic

[@ParallelWealth]

Thanks Mike

[@adazon]

Don't think you explained what a withholding tax is Is that the tax you owe on the withdrawal as income? If they withhold more than you end up owing at the end of the year, do you get a tax refund?

[@ParallelWealth]

Correct, you would get a refund

[@The786Aziz]

Another wonderful and educational video. Thank you, Adam. I have a question: I turn 65 on December 29. Which date is the earliest I can move $2000 from RRSP to RRIF?

[@ParallelWealth]

Anytime in the year. And you will want to pull that $2k prior to your birthday as most FI can't process it that late. So in theory do it now, and then you would claim on taxes next April

[@The786Aziz]

@ParallelWealth Thank you for your expeditious reply and once again, I love watching your all your videos. Very informative!!!!

[@kathleen8092]

Is a LIRA different from a "Locked in RRSP" in terms of defined benefit commuted value. My bank says I need a Locked in RRSP but all paperwork from pension plan states LIRA. It's very confusing terminology. Is it the same thing?

[@ParallelWealth]

Usually a locked in RRSP is federally legislated, where a LIRA is provincial. But yes, pretty much the same account except for the name

[@bobminor1141]

If the funds arose from employment in a federal job, eg, military, rcmp, etc, then it's a federal lira. There's a definition of "included employment" in the pension benefits standards act that covers all the jobs that it applies to. If the funds are from what you might call other regular employment, eg work for a private company, it will be a provincial lira. In Ontario that's covered by the Ontario pension benefits act, section 3 of the act defines the scope. I suppose each territory or province has their own legislation. My bank told me my funds are in a lira but my funds came from work in the UK so they simply cannot be liras under Canadian law, either federal or provincial. They can only be rrsp. I've engaged a lawyer in Toronto who is an expert in pension law and they confirm my position. Anyway, your own work history in Canada, will dictate whether your funds are federal or provincial liras.

[@chrisaguirre8509]

Why convert at 65 when the funds could continue to grow tax free still and you can take later?

[@ParallelWealth]

Chris, they would transfer in kind and continue to grow. You can take out $2k per year tax free...plus other tax planning tools within...that's why.

[@renzoodorico7848]

Does the attribution rule apply to RIFFs as well as RRSPs? My wife's RRSP is a spousal RRSP and I am the contributor. I have set up a RIFF for her but have not funded it from the RRSP yet. If the attribution rule applies to RIFFs does the three year wait period commence from when I set up the RIFF or from when the RIFF is funded?

[@JohnSmith-mr8wc]

Contribution conversion no more contribution.

[@renzoodorico7848]

@@JohnSmith-mr8wc Thanks

[@southerncomfort971]

I wish I had known about the $2000.00 tax free when I turned 65. I am now turning 71 and need to convert to a RRIF and your saying I don't have to convert all of my RRSP ? Does that apply once a person has turned 71. I live in Ontario if that matters.

[@TechPeasant404]

you have to convert All your RRSPs to RRIF on the year you turn 71 however you have till Dec 31 of that year to do it.(im guessing this answer came too late as you posted your question 8 months ago)

[@southerncomfort971]

@@TechPeasant404 yes it is a little late but thank you any way. I am sure it may have helped someone else as well

[@pkam1881]

If I am 65 and still working and continue to contribute to my RRSP, am I still qualified for the $2000 RRIF withdrawal tax credit?

[@ParallelWealth]

Yes

[@pkam1881]

@@ParallelWealth Thanks for the quick reply. Much appreciated.

[@nickyfurlano8531]

It's the tax year you turn 65 not being age 65.

[@neodenjin]

Could you please make a video on the options available for moving assets out of a RRIF. Specifically, if you want to move the assets AS IS to a non reg account. What is the best way to do this if you have both USD listed funds and CAD listed funds. Must the withholding tax be paid in CAD? Can you move the USD listed funds as is and move a certain amount of CAD cash as well to pay the withholding tax?

[@mrslcom]

It depends if your financial institution will let you customize the withdrawal like that.

[@ParallelWealth]

Every custodian will be different. Most will do the withholding tax and rest can move in kind to a non reg. You could then move to TFSA from there

[@carolinap4150]

great explanation - thank you Adam!!

[@ParallelWealth]

You are welcome Carolina

[@GaneshD123]

Thank you!

[@jeanmarchockeypro]

If I plan to convert my RSP to a RIF at age 55 because I don’t know how long I’m going to live, is it true that if I only withdraw the minimum amount year after year, the RIFF balance will be $0 around the age of 77.5? (Sum of minimum withdrawal percentages from age 55-77.5 is ~%100. Or are the percentages recalculated based on the new RIF balance every year which would take much longer to reach a balance of $0?)

[@ParallelWealth]

Likely not, but will all depend on your returns

[@DoneByD]

The minimum withdrawal amount is based of the previous years Dec 31 balance so will definitely not hit zero by 77-78. I guess the only way it could happen is if you are getting negative returns during those 22 years. Although thinking more about negative returns it still wouldn't go to zero because the amount you withdraw would end up being a lesser amount as you are always only taken a percentage of the previous years balance. Since that percentage is less than 100% it would never run out just get very small when into 90s and then 95 when you hit the 20% withdrawal rate. I did a calculation and if you started at $100K and withdrew the minimum amount from age 55 to age 82 (2.86% to 7.38%) you would still have $25K (this is with a zero percent return) remaining.

[@rockingcheers]

@@ParallelWealth Could converting RSP's to a RIF early (let's use 55 as the age) be used as a great strategy to melt down those RSP's? That would be an interesting video, especially when discussing the tax advantages.

[@nickyfurlano8531]

@@DoneByD They certainly could see a full fledged 22 year bear market or longer in U.S. stocks. Even the summer of 1929 wasn't as overvalued aa today.

[@brucewiebe6490]

I ran a calculator taking out the required minimum. The percentage withdrawal is based on the previous years year-end balance and it increases each year until age 95 and then is set at 20% withdrawal per year. There was still money left at age 100 which is when the calculator hit its limit.

[@Jacquie_Kirk_111]

Wow, great explanation!

[@ParallelWealth]

Thanks!

[@mikewestern9925]

Hi Adam, is it the same for LIRA to LIF

[@ParallelWealth]

Yes.

[@DoneByD]

Thanks Adam - just a point of clarification - I'm under the impression that you can take money from a spousal plan as long as you are not taking from funds deposited in the past 3 years... IE withdraw funds from a spousal RRSP Dec 2022 and then 30 days later I could deposit money into a spousal RRSP and there will not be any attribution rules applied on the Dec 2022 withdrawal. The following year Dec 2023 my spouse could also withdraw RRSP funds as long as the fund has more dollars in than what has been deposited into it over the past 3 years... Is this not correct?

[@ParallelWealth]

Last in first out.

[@ParallelWealth]

We have a full video on spousal RRSPa that break this down well.

[@DoneByD]

@@ParallelWealth thank you I will take a look for the spousal plan video. Have a great day.

[@DoneByD]

​@@ParallelWealth Okay I think I get it now... Let say $5000 was deposited in Jan 2023, because that $5000 deposit was made in 2023 the entire spousal RRSP funds would lock for the first $5000 of withdrawal of that Plan into the attribution rules until Jan 1, 2026 when all money in plan would once again become available to the annuitant. So if $10,000 was withdrawn anytime prior to Jan 1, 2026 then $5000 will be subject to the attribution rules and the remaining $5000 would be income to the annuitant. Correct?

[@ParallelWealth]

correct@@DoneByD

[@henjer2150]

Hey Adam,great video. Question, I accidentally overcontributed to my RRSP and I was wondering how do I pay the penalties? I know its 1% per month and I will withdrawal the amount I overcontributed. Do you have any videos on this? Oh ya I did go over the $2,000.

[@ParallelWealth]

Wait for CRA. Withdraw the excess asap and then wait to see if they do charge you.

[@henjer2150]

@@ParallelWealth I think we all will be waiting for some time with the strike going on. Also will this affect my sons child tax benefits?

[@ParallelWealth]

@@henjer2150 I don't think it would.

[@henjer2150]

@@ParallelWealth One more Question. When doing my taxes should I put in the total contributions RRSP(receipts) or wait to hear from CRA??

[@ParallelWealth]

@@henjer2150 you will have to put in what you deposited per your slips. I would work with a CPA on this.

[@Joeyaway]

Thanks 😊

[@ParallelWealth]

You're welcome!

[@victorpetrenko2736]

Quite interesting! One thing I could not find anywhere - when drawing from RRSP in several chunks thru the year, does bank keep track of your previous withdrawals and apply higher withholding tax rate on your later withdraws?

[@gordthompson824]

If from the same bank and acct. yes. If not than no.

[@victorpetrenko2736]

Thank you!

[@jimchen4662]

No, at least not in Direct Investing.

[@Snauzers]

If your rif was 100,000 that would be 40,000 minimum no withholding tax, correct?

[@TechPeasant404]

unfortunately not. if you look at the government website it shows you the % of your total RRIF you need to withdraw based upon your age. at 65 you need to withdraw 4% of the total RRIF if you have an RRIF. so if your account had 100,000 you need to withdraw $4000 not 40000. if you took 40000 out that year you would get a 30% withholding tax on $36000 since you exceeded your required withdrawal by $36000. at age 95 and up you need to take 20% out each year so if you withdrew $40,000 you would get a 30% withholding tax on $20,000.

[@austinorphan6688]

Adam, help! What is the most cost effective way to transfer my yearly RRIF withdrawal to Europe? Service charges for exchanging and transferring funds from Canada to Portugal are outrageous!

[@ParallelWealth]

Austin, not sure to be honest - but there has to be some good YT content out there on this.

[@andreanelson8110]

Look into opening a Wise account.

[@billsnow3469]

excellent! thanks

[@ParallelWealth]

You're welcome!