OnlyMyOpinoin, I have just plan and I'd like to know if I miss something in my estimationsGibor, You may already have all this sorted out, and I'm not suggesting you post it all.$7K from non-reg is only annual interest , I don't intent to withdraw this money , maybe some small portions , but definitely not 7K per year.Frankly, the difference between paying $1.5k of tax at age 52 versus $2.8k at age 65 doesn't seem a compelling reason to make an irreversabe switch to rrifs at age 52 unless it is all part of a well considered plan.
For example, if you start rrifs at age 52 you will compromise their tax-sheltered growth and have reduced amounts remaining at age 60, 65, or 72 - is this baked into your numbers? And if you draw $7k a year from your non-reg beginning at age 52, how much will be left at age 60 or age 65 and how long will it last? - you show $7k/yr still from non-reg). If you draw $14k instead and leave rrsp's untouched what is the result? Alternatively, if you take more from rrifs and leave non-reg untouched, etc ....
I also will not really miss RIFFs " tax-sheltered growth", as my wife (who has high income) will open new Spousal RRSP and will be contribution annually 6-7K (all room left after her pension adjustments) - thus I will pay on my income very small tax (very low tax bracket) and my wife will pay much less taxes es she is in the highest possible bracket.
I also intend first to withdraw from RRIFs cash portion that give me only 0.75% interest, this cash I can deploy in non-reg HISA and get at least 2% interest.
@Steve, thanks as always. Your software is probably more accurate.
Going through this with my mom who plans to retire at 55. Has around 600k In her RRSP at this moment. Will get a pension from work, oas, cpp, etc. Basically, to minimize her tax burden she may as well deplete her RRSP starting as soon as she retires without converting to a RRIF.
Figure she would take out 30k per year, 9k in withholding tax, her marginal rate would be minisicule on 30k and she would most likely get around a 6k refund. therefore nearly 3k in taxes. She can do this until she has depleted this and take her work pension when she gets old enough (70) and this way she can minimize taxes during those years nearly would be less than 10% overall tax she would be paying + income from her TFSA which she can generate and this would allow her to minimize her tax burden later on when she receives her pension from work + cpp and oas and minimze the OAS clawback.
Wow, seems like your mom is in great shape depending upon expenses = 1) $600k RRSP + 2) workplace pension + 3) CPP + 4) OAS.
Before tax I would assume conservatively 1) $30k + 2) $20k (?) + 3) $5k + 4) $5k.
i am glad that she will be able to enjoy herself. she has worked full time 25 years + and raised 4 kids while my dad worked his ass off to build his business.
She can also deplete her RRIF with converting RRSP to RRIF abd saving on redemption feesGoing through this with my mom who plans to retire at 55. Has around 600k In her RRSP at this moment. Will get a pension from work, oas, cpp, etc. Basically, to minimize her tax burden she may as well deplete her RRSP starting as soon as she retires without converting to a RRIF.
Last edited by redsgomarching; 2017-03-20 at 05:10 PM.