Comments on: How Registered Retirement Income Funds (RRIF) Work

By: Guaranteed Income Supplement (GIS) and GIS Clawback | Million Dollar Journey

Mon, 10 Aug 2009 10:30:28 +0000

[...] I received an email from a senior reader (married) recently who was wondering what he can do about avoiding the GIS clawback as he was soon due to convert his RRSP to an RRIF thus a forced withdrawal. [...]

By: cannon_fodder

cannon_fodder — Tue, 26 May 2009 13:51:31 +0000

FT,

Looks like annuities would be a good topic for a future article. It would be interesting to compare what annuities net you now, at historically low interest rates, to just a few years ago and compare that with inflation.

I understand there are different types of annuities – an expert’s explanation would be welcome.

By: Tax-Free Savings Account (TFSA) – How should we use it? | Million Dollar Journey

Tue, 03 Feb 2009 11:31:04 +0000

[...] great control in minimizing your taxes by deciding exactly how much to withdraw from your RRSP (or RRIF) and how much to withdraw tax-free from your [...]

By: cannon_fodder

cannon_fodder — Tue, 06 Jan 2009 04:52:18 +0000

I hope that the government at some point before I retire, allows for periods of poor performance by permitting the deference of the prescribed withdrawal amount.

For example, if you are supposed to withdraw 10%, you are permitted to withdraw less but that difference is to be made up within 2 years.

Ideally, I’d like my RRSP to fund the first leg of my retirement and then TFSA and non-reg investments the last leg. Then I have more independence in how I retire.

By: A Lap Of The Blogs : WhereDoesAllMyMoneyGo.com

A Lap Of The Blogs : WhereDoesAllMyMoneyGo.com — Thu, 01 Jan 2009 23:38:40 +0000

[...] Dollar Journey produced a primer on RRIF accounts (Registered Retirement Income Funds). Maybe he’s retiring earlier than we [...]

By: FrugalTrader

FrugalTrader — Mon, 29 Dec 2008 23:52:54 +0000

Thanks again for the tips guys.

By: Jack

Jack — Mon, 29 Dec 2008 18:44:30 +0000

oops… I should have said SOME RPP payments aren’t eligible for pension splitting (variable pension benefits paid from a money purchase provision of an RPP).

A better example of pension splitting would be if S1 had transfered say 14000 of pension income to S2 and S2 had had no other income. S2’s basic personal and age credit (for 65+) would have wiped out tax payable on the 14000 transfered and he/she wouldn’t have needed their pension credit at all. Then the entire pension credit from S2 could be transfered to S1 (giving S1 a 4000 pension credit).

By: Jack

Jack — Mon, 29 Dec 2008 18:29:32 +0000

Don’t forget that the Pension Credit is a 15% credit so it will only make a pension withdrawl “tax free” if you’re only in the lowest tax bracket. Also, the pension credit can be transfered from one spouse to another. So if S1 has $3,500 of pension income eligible for splitting then they can transfer up to half to S2. At the moment, both spouses are using 1750 of each of their pension credits. If S1 also has $500 of pension income NOT eligible for splitting (ie. RPP payments) then S2 can transfer their remaining 250 of credits to S1 thereby (possibly) wiping out tax payable on their pension income.

By: Four Pillars

Four Pillars — Mon, 29 Dec 2008 16:07:01 +0000

Good explanation of RRIFs! I’ve been meaning to post on these as well (someday!).

A couple of minor points

- RRSPs have to be collapsed by the end of the year you turn 71 – not by your birthday.

- There is no mandatory withdrawal in the first year you set up the rrif. If you convert your rrsp to a rrif in the year you turn 71 then the first mandatory withdrawal will be in the year you turn 72.

By: FrugalTrader

FrugalTrader — Mon, 29 Dec 2008 13:49:51 +0000

Good call George, I will fix the article to reflect your suggestion. Thanks!

By: George

George — Mon, 29 Dec 2008 13:03:13 +0000

One thing you don’t note about the 3 “choices” is that they aren’t mutually exclusive – at or before age 71, somebody with an RRSP can choose to take out some cash, convert some of the RRSP to an annuity, and to convert the rest to a RRIF.

Put another way, you aren’t forced to go with only one of those options – you can combine them in any way that you like, as long as the RRSP is collapsed by age 71.