Find Your RRSP Meltdown Sweet Spot

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What is the RRSP meltdown sweet spot, and how do you find it? Because if you don’t, then a poor withdrawal strategy will cost you thousands.

Today, we’re diving into the concept of an RRSP meltdown—a strategy that can help reduce the taxes your estate will owe down the road. The timing of your RRSP withdrawals plays a huge role here: if you’re too slow or avoid withdrawals, you’ll face a hefty tax bill at the end of life. If you’re too fast, you might pay more taxes today than necessary. Time to find the sweet spot!
-Marc Sabourin, CFP®, CIM®

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[misspethamhouse]

Wish there was an easy way to determine the sweet meltdown spot!! Thanks for an interesting and thoughtful video!

[signal]

A more refined version of a meltdown is to define the drawdown according to the go-go slow-go no-go phases of retirement.

[DL-blqp]

This is exactly what I've been struggling with. It hasn't helped with how to plan it, but it has helped me see that swift RRSP draw down may not be in our best interest. Back to the draw down board, I guess!Thanks!

[tcmazz]

I wished that you would of touched on the fact that one or two of these scenarios would of meant that the couple would be faced with an OAS clawback.

[DoneByD]

I like a slow meltdown (a little more aggressive than the sweat spot)... IE not trying to have RRIF funds until death but also not drawing down RRSP/RRIFs all prior to early 70s. I am targeting age 78-80 to have all RRIF money fully deregistered. Hopefully no deaths before that date... RRIF funds pulled into income but not needed for lifestyle expenses will be reinvested into TFSAs first and then unregistered accounts. Again hopefully we are both still alive at age 80 which will then place us in a very good financial position, regarding the financial impact of one of us passing. The surviving spouse will have all financial needs covered with foundational income sources (DB pensions, CPP, CPP survivor, OAS) and then will still have full TFSA accounts, open investments and a house should LTC be needed... The balance remaining at death of last survivor should still be a significant amount to pass on to our two children rather than giving a huge chunk (up to 50%) to CRA in taxes.

[sharky]

Both of my parents lived to age 88 and my wife and I are both healthy and take care of our health better so by the grace of God we SHOULD live to around 90 or longer with the constant improvements in medicine. Great video. I was on the more aggressive track but I think I'll try to relax my melt down strategy a bit spread it out longer. We have also consolidated many of our accounts to streamline thing to make it easier for us right now as well as for our kids when we're gone. Thanks, great video

[billyrock]

Outstanding factually accurate video. 💯

Excellent real life example as well ✅

[carloscanizares]

I retired last Aug at 42 and am living off dividends in my TFSA (approx 15-20k per month), should I just melt down my RRSP now (within BC Basic Personal Amounts) so I won’t have anything to RRIF?

[paulcarr]

Average life expectancy is not 90. Plan for 80. Anything after 80 is usually crap anyway.

[hopstiguy]

What happens if the RRSP is comparatively small, say $200K? Does the meltdown matter?

[davidhughes]

Great video. Very succinct. Thank you.

[jimjackson]

You should be able to leave your money in your rrsp and withdraw your money as you see fit rather than having to turn it into a rif and take minimum withdrawals whether you need the money in that particular year or not.The withdrawal rates are huge as you get older such that by the time you are 90 your rif is pretty much gone.Imagine being 90 and your retirement account is depleted!The govt taxes whatever is left anyway.

[derekcox]

Average LE for a Canadian man is 80. For a Canadian woman it’s 83. It doesn’t make a ton of sense to think that a Canadian retiree will need to be milking their RRIF to age 90. It’s getting pretty annoying actually, hearing my investment ‘advisors’ telling me I need 800k in my rsp and my wife needs 800k . If you’re 60 and have 1.6 or 1.2 mil in your RRIF? You need to retire and start spending your nest egg before you croak and CRA makes a juicy omelet out of it.

[RichardSadlowski]

Is it not better to have a big rrif yeah you pay lots of tax but the bigger it is the more you have after tax my portfolio is really aggressive gang stocks so the go up a lot

[liverpool]

Maybe this is going to benefit 1% of Canadians. What about the other 99%? What about the people with $250k RRSPs? I am not going to do any meltdown outside of $55, 867 of taxable income which will be taxed at 15%. And if something happen... let it be... And if I spend $50k than I am going to put $5, 867 in my TFSA... Simple.