MAXIMIZING YOUR RRSP

If you won’t require income from your RRSP at retirement, since you have alternate income sources such as non-registered investments to draw upon, then you may want to make the most of your RRSP while you can. When the time to close your RRSP approaches (age 71), your investment planning advisor at CDSPI Advisory Services Inc. can guide you through the retirement income solutions available to you, such as a RRIF (registered retirement income fund) and insured annuity.

In meantime, if you are earning income, your advisor can explain why it’s beneficial to continue putting the maximum you’re allowed into your RRSP each year and utilize any contribution room you have left over from previous years. Keep in mind that once you close your RRSP you’ll be required to start taking money from the plan into income each year, but you won’t be able to deposit any new money into the converted plan.

At age 65, you may want to consider converting some of your RRSP into a "Mini-RIF" to take advantage of the credit on pension income

Age 65 or Better?

Starting at age 65, you can receive a credit on the first $2,000 of income you receive from qualifying sources such as a RRIF (registered retirement income fund). Your investment planning advisor at CDSPI Advisory Services Inc. can help you set up a “Mini-RIF” to take advantage of the credit on pension income. This strategy could save you several hundred dollars in income tax compared to withdrawing $2,000 directly from your RRSP. You’ll need to convert about $14,000 of your RRSP into a Mini-RIF” to generate $2,000 of qualifying pension income annually from age 65 to 71. You can also transfer up to half of the pension credit to your lower-income spouse (age 65 or older) to reduce your combined tax bill.

For More Information:

RSP

RIF

CDSPI's Private Wealth Management

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