Can I Retire in 2023 at age 55? - Page 7
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Thread: Can I Retire in 2023 at age 55?

  1. #61
    Senior Member My Own Advisor's Avatar
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    You're in stellar shape Mookie Very well done.

    Hidden Content - Working on a $1 million portfolio and $30k per year from it.

  2. #62
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    Quote Originally Posted by My Own Advisor View Post
    This my understanding:
    -RRSP can be converted to RRIF at any age, don't need to be age 71!
    -some brokerages charge a fee for RRSP withdrawals, some same brokerages charge no fee once RRIF set up
    -no withholding taxes on RRIF min. withdrawals, there is ALWAYS RRSP withholding taxes on RRSP withdrawals
    -you don't have to convert all your RRSP into a RRIF, you can convert just a portion, say $100k if you wanted
    -"forced" RRIFs minimum withdrawals can help with a) income you want, now, and b) smoothing out taxes as to avoid getting a large tax hit(s) later in life.

    If you have a decent amount inside RRSP, consider withdrawing from RRSP or convert to RRIF when not working; defer workplace pensions to maximize their payout benefit and avoid pension income penalties (i.e., age 55 or even age 60). Most pensions I know have penalties associated with them if you tap them early, examples:

    • 0.3% for each month between age 60 and age 65, (pension is reduced) and
    • 0.4% for each month by which your early retirement date precedes age 60.

    Ouch!
    i thought there was a small amount of withholding tax on rrif withdrawals

  3. #63
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    ^^^

    YMMV ... up to the minimum RRIF withdrawal does not have withholding tax. Taking more than the minimum means the difference is subject to the same scale as an RRSP withdrawal.

    For example, take exactly the minimum RRIF withdrawal = no withholding tax, take the minimum plus $3K = $3K subject to the 10% withholding tax.

    http://www.taxtips.ca/rrsp/rrifminimumwithdrawal.htm
    http://www.taxtips.ca/rrsp/withholdingtax.htm


    Of course, when the tax return is filed up to April the following year, any discrepancy for the actual tax versus the withholding tax will be reset as needed (like the employment withholding tax).


    Cheers

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  5. #64
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    Quote Originally Posted by My Own Advisor View Post
    This my understanding:
    -RRSP can be converted to RRIF at any age, don't need to be age 71!
    +1 ... some of the posters writing about their early retirement have written that part of their plan for dealing with the OAS clawback was to convert some/all of their RRSP to a RRIF many years before age 71.


    Quote Originally Posted by My Own Advisor View Post
    ... -some brokerages charge a fee for RRSP withdrawals, some same brokerages charge no fee once RRIF set up
    I would bump the "some brokerages" to "almost all brokerages".

    This thread had few exceptions.
    http://canadianmoneyforum.com/showth...SP-withdrawals

    I haven't done a thorough review so it may have changed but somehow, I doubt it.


    Quote Originally Posted by My Own Advisor View Post
    ... -no withholding taxes on RRIF min. withdrawals, there is ALWAYS RRSP withholding taxes on RRSP withdrawals
    -you don't have to convert all your RRSP into a RRIF, you can convert just a portion, say $100k if you wanted
    +1 ... though this wording may obscure that where the RRIF withdrawal is over the minimum, the same withholding tax schedule is used as RRSPs.
    Like employment withholding tax, the final tax return will fix any discrepancies.


    Cheers


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