Retiring With An RRSP? Here's What To Do

In this video we'll discuss what happens to your RRSP when you retire, and how you can efficiently drawdown the account.

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TIMESTAMPS
0:00 - Intro
0:58 - How RRSPs work
2:10 - RRSP to RRIF conversion
3:49 - Partial RRSP conversion
5:15 - RRIF minimum withdrawal
7:49 - Withholding tax
9:48 - Retirement income taxation
10:42 - Retirement income sources

•••••

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The above affiliate links are provided for your convenience. If you click on a link and end up purchasing a product or service, this channel may receive compensation for the referral. We have personally vetted each product and service we provide links to.

[dennisspackman]

When I retired I put all of my RRSP into a RIFF. First thing I do early each January is take out a lump sum of cash and put it into maximize my TFSA for the tax year.

[murraytown]

Began withdrawing from my RRIF at 57. Will be completely melted down by 70. I don’t know why people get in a twist over the withholding tax. It’s simply a down payment on taxes. At the end of the year it’s a wash.

[nickyfurlano]

I took all my money and RRSP's and RRIF's and moved to Mexico now instead of a 100 percent clawback on my OAS I get my full OAS and interest rates in Mexico pay about 10 percent instead of 4.5 percent on a GIC in Canada. My tax advisor told me to move to Mexico.

[CharlotteNoah]

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

[ddavidson]

As far as I know you can convert a RRSP to a RRIF as early as age 55, not at ANY age as is stated in the video (so age 55 to age 71). For most people it's academic but for those FIRE people if you are expecting to start your retirement when you are 50 or whatever a RRIF isn't an option, you'll be making withdrawals directly from your RRSP.

[lauraw.]

Another great video Adam!! 🤩
Especially appreciate your comments on the tax implication of moving more $$ to RRIF to avoid pre-tax payments on your withdrawal - this is especially true if you are still working, contributing to ur RRSP and at age 65 you want to take advantage of the ‘free’ $2k pension income. Thx 🎉

[ALaurendeau]

An important note on the witholding tax for Quebec. While it's true that the federal withoulding rate is lower for Quebec, a 14% Quebec witholding tax is also applied on top of it. Per example, if you retire 10, 000 from your RRSP, an amout of 10% Federal + 14% Provincial with be witholded for tax on the payment (total of 24%). Also, for a RRIF, the 14% witholding tax also does not apply on the minimum redrawal.

[joebender]

You shouldnt have to convert it into a rif but be able to withdraw money as needed not as ordered.

[lizp.]

It's not worth it to me to convert to a RRIF. Single, so can't income split. No fees from my bank for withdrawing. I am only 57 and plan to withdraw each December when I will know my total income for the year. I don't pay tax at source on my DB pension and the withholding tax will more than cover my tax obligation for the year. I set aside 15% from my pension each month just in case something unexpected happens, this ends up being "spare" money that can be used elsewhere. Most of the money I withdraw from my RRSP each year will be put into my TFSA accounts. This will be my first year of RRSP meltdown...hopefully I've calculated things properly lol. Between now and 60 or 65, this will be the lowest income years of my retirement, so believe this is the best time for me to withdraw from my RRSP before I start collecting CPP and OAS.

[keenanp]

Hi Adam, you're helping me out each and every day. I just read in a finance magazine that there is a delayed annuity now available through Desjardins. Is this something that you could do a video on? It feels like something that may be advantageous for those of us that will struggle to efficiently withdrawal our RRIF/ RRSP.

[philc]

this was a good video, do you have a LIRA and LRIF video as well ?

[BenzGL]

For some (like myself) who have an employer sponsored group plan that follows them into retirement, it's best to transfer into a RRIF only what you're going to withdraw within that year. The reason being that in most cases, those group plans will have lower managing fees than an individual RRIF account. Group plans are put in place as a work benefit to help employees save during their career, so withdrawal accounts are obviously not part of that umbrella.

[Pill-AI]

This really well explained… thank you. I am 55 and this information is really helpful. Adam do think TFSA contribution limit could potentially increase in future… $6500 to $10000 maybe?

[KP-ujwf]

Great video! I'm 65 with a defined benefit government pension along with a smallish ($100k) RRSP. I actually still have a $40k RRSP deduction limit if I want to use it on my 2024 taxes. Question... Is it worth using this $40k, then moving my RRSP to a RRIF in 2025? Or forget about it and convert my $100k RRSP to a RRIF this year and starting minimum withdrawals in 2025? (PS.. I'm holding off taking CPP and OAS for 5 years). I realize you can't give specific answers... just a general comment about adding to my RRSP before changing to RRIF would be greatly appreciated. Thanks!

[NBPostman]

Both my wife and myself are retired and with what we get from pension sources we do not a have enough income to pay taxes. The question how much income do I have to start paying Taxes and how does that relate to withdrawing from a RRIF?

[henryhunter]

Is there any benefit to melting down your RRSP early if you are already at the highest marginal tax bracket and expect to continue to be so throughout your retirement? In that situation, wouldn’t you be best off deferring the conversion to a RRIF until the last possible moment to benefit from the ongoing tax deferred investment income?

[franpaull]

Love watching your channel. Just a note, just went through my first withdrawal, and the first year the tax is payable on minimum withdrawal. There will be no tax next year on minimum amount.

[AvgJoeCda]

I own rentals, so I'm already going to be taxed a good amount...let alone adding RIF income to it.

[patti]

Withdrawing more then minimum at 60. = 3.33%
Can we instruct financial institution to withhold more tax at this point. Not just on the difference between min and actual amount.

[tessiechanp]

Do I need to hold a minimum amount of cash in a RRIF? Or would the investment be sold to get the minimum withdrawal amount automatically?