加拿大退休RRSP被強制取款?! RRSP提取策略 避免RRSP到期 為何要將RRSP轉為RRIF RRIF是什麼 免税提取退休金 RRIF策略 注意事項 常見錯誤 | Novella我想退休

Hello Everyone! Welcome to Novella Wealth's channel I am Edmond I am Kinson Kinson, a lot of people have asked me How do you actually start a retirement plan? And when should I start doing it? In my view, some people may still choose to continue to work at 66 Some people may choose to retire entirely Some people may choose to follow their dreams at the age of 66 That's why we need to have a good financial plan before we retire So that when we retire, we can have more options Yes, that's why we will be doing a mini-series of "Let's Retire" videos Discussing how to do retirement planning Don't miss out on our new videos Remember to subscribe, comment, like our channel So let's begin today's video! Speaking of retirement The easiest thing to think of is RRSP It is a registered account with tax deferral and savings If you want to know more about RRSP You can check out our previous video on three retirement savings plans So Kinson, what happens to your RRSP account the age of 71? According to government rules On the year you turn 71 years old The last contribution date for your RRSP is by December 31st In other circumstances You can still contribute to RRSP in the first 60 days of the next year And still can be counted for tax deductions for the year But this does not apply to the age 71 deadline So the latest contribution date for the RRSP is By December 31st on the year you turn 71 When we reach the age of 71 What are the options for how to handle your RRSP account? There are actually two options The first option is to close the RRSP account And withdraw all the funds When withdrawing all the money out in one go This amount will be treated as your income for the year Of course, what you receive actually is not the full amount of your entire account because the government would charge a withholding tax After you file the tax return then you will know how much tax you actually owe Maybe there will be tax refund for you The second option is to transfer the money from your RRSP to an RRIF account This way there is no immediate tax implication And as to how you would withdraw the money when you use RRIF? We'll explain more later But what if you are past 71 years old And you forgot to handle your RRSP account? What happens then? Usually banks and financial institutions will remind you on the year you turn 71 years old And notify you that your RRSP account is about to expire And ask you what you would like to do with the account If you don't reply and give instructions to the bank or the financial institution In general They will automatically convert the funds from your RRSP account and transfer to an RRIF account for you but any existing investment instructions will cease until you get in touch with them Some financial institutions also may cancel your RRSP account And withdraw all the money and send you a cheque for the amount (minus the withholding tax) So it's better to have a good plan before the 71 year old deadline So you don't end up in a situation where it's too late RRIF stands for Registered Retirement Income Fund Many people ask what is the difference between RRSP and RRIF accounts? It's actually very similar in many ways First of all, they can both be tax-deferred The financial products that can be invested in are similar The only difference is that The government has rules as to the minimum amount of money that must be withdrawn from RRIF accounts each year For example At the age of 65, you need to withdraw at least 4% of the money in your RRIF account At the age of 70, a minimum withdrawal of 5% is required This percentage ratio increases with age The government's intention is that by about 90 years of age all the money saved will have been taken out Is there an age limit for using RRIF? Actually, there isn't. Basically, you can transfer money from RRSP to RRIF account at any age But the only condition is that you can not open a RRIF account directly The money must be transferred from the RRSP to the RRIF account Generally speaking, what is the most reasonable age for transferring money into a RRIF? Usually people choose to transfer money into a RRIF at age 65 Because RRIF accounts are a type of pension account If you withdraw money from a RRIF You can have a pension tax credit when you file your tax return So most people generally choose to transfer their money from RRSP to RRIF at age 65 What are the benefits of a RRIF account? With the minimum amount that must be withdrawn each year There is no withholding tax required Withholding tax is only payable on the amount over the minimum withdrawal amount The year you turn 71 is the last year you can have an RRSP account The year after that is the last year to have a RRIF account But if I'm 71 years old this year and I'm ready to switch to RRIF And my RRSP still has a contribution room leftover I also have extra cashflow to contribute Depending on the client's situation We may recommend that you contribute the full leftover balance of your RRSP contribution room Why do we say that? For instance, Asian people often have investment or rental properties You may want to sell your investment properties when you retire Or have income from other sources after contributing to the RRSP For example, at age 75 After the property is sold, the RRSP tax deduction can enhance the effectiveness of the RRSP contribution Tax deductions can be applied years after age 71 when you have a RRIF account Edmond, many people would ask Is there a "best age" to withdraw money from your RRSP account No, there isn't. I think everyone's situation is different So it's best to talk to a financial professional To tailor make a plan for retirement funds withdrawal Because when I follow up on clients' cases They all have this problem They focus on saving when they're young When they reach retirement age at 65 They probably still want to continue to work Then they wouldn't want to take the RRSP funds out Because they still have other income stream Wouldn't want to take money from RRSP to increase their income tax Or they may be receiving OAS already at age 65 So it may not be financially necessary to withdraw RRSP Then at age 71, they are forced to convert RRSP to RRIF Then they would be required to withdraw money from RRIF But by the time you're 71 years old Maybe you still don't want to take the money out either Because you probably won't be able to use all that money either And also you have to pay taxes on all these retirement incomes So why would you take so much money out? Maybe in the end you only withdraw the minimum amount as required by the government So what happens to the RRIF balance I don't want to take it out When you pass away, your RRIF funds can be transferred to the surviving spouse And there is no tax implication But when your spouse also pass away The money is treated as your spouse's income on final tax return Imagine if you were 71 years old Your RRSP or RRIF account has 1 million in savings When you and your spouse both pass away, the entire amount left will be withdrawn as income for that year If you make a million dollars income a year You have to pay at least 50% tax to the government So all those years of hard-earned savings Not only that you can't enjoy yourself But it's going to the government then I would feel very upset So I often use a metaphor If I were a hiking coach I'd tell you We have the pleasure of meeting you all today Why don't we go hiking together? After we've climbed up the mountain It was nice to see the beautiful scenery at the peak After a while, we realize there is a problem. How are we going to descend the mountain? If I know how to take you up a mountain and I don't know how to take you down a mountain We'll only die at the top of the mountain A financial planner who keeps telling you to save money in an RRSP There really is nothing wrong with that But it is crucial to also have a good exit strategy At what age should you need to and how should you get your savings back? So that you can enjoy it for yourself as well as leaving a legacy behind for the next generation Today we discussed what a RIFF account is and what to look out for before and after age 71 in terms of RRSP account What are other strategies to be aware of? As Kinson said earlier Retirement planning is like hiking up a mountain Know how to get up and down the mountain If you have questions about savings and retirement planning You can scan this QR Code here to Book a free retirement planning consultation with one of our advisors That's it for this episode In the next episode, we will talk about estate planning See you next time BYE BYE

Channel: Novella Wealth加拿大理財生活

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Id: VTXuoCV28Ts

Length: 10min 11sec (611 seconds)

Published: Tue Jul 19 2022