# Semi-retired and have a question about my RRSP's



## BeerHunter (Jul 26, 2016)

I'm 70 turning 71 in Feb 2017. It's my understanding I can make one more contribution to my RRSP if I do it before Dec 31 this year (prior to the year I turn 71). We are receiving our CPP and OAS and managing just fine with that and what I earn , and able to stuff some into savings.

There's not a lot of money in the RRSP's(estimate about $40,000). I'm thinking of biting the bullet and rolling the entire RRSP into our savings (where there's a substantial amount), where it's easier to access , and using the tax refund I'd receive to offset the taxes that would be payable on the lump sum withdrawal.I might be wrong but any RPP has to be reported as income and if it were in the savings account , any withdrawals wouldn't so we could also be eligible for some GIS funding if we felt we needed it , which we probably wouldn't.

Thoughts?


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## Eclectic12 (Oct 20, 2010)

BeerHunter said:


> I'm 70 turning 71 in Feb 2017. It's my understanding I can make one more contribution to my RRSP if I do it before Dec 31 this year (prior to the year I turn 71).


I will have to check as I haven't paid that much attention.


We are receiving our CPP and OAS and managing just fine with that and what I earn , and able to stuff some into savings.



BeerHunter said:


> .... There's not a lot of money in the RRSP's(estimate about $40,000). I'm thinking of biting the bullet and rolling the entire RRSP into our savings (where there's a substantial amount), where it's easier to access, using the tax refund I'd receive to offset the taxes that would be payable on the lump sum withdrawal...


I'm not sure I understand.

If you withdraw everything from the RRSP (i.e. approx. $40K), likely the financial institution will charge a fee (ranging from $50 to $150). More importantly, the full withdrawal amount has to be reported as income, on top your other income.

I would thought temporarily driving your income put by some or all of the $40K would be a bad thing, in terms of income taxes.

For the tax refund, I'll have to work out the possibilities ... but likely the refund is not going to cover your regular income that has taxes (ex. investments, CPP, OAS and possibly company pension) *and* whatever the portion of the RRSP withdrawal is on your tax return.

If the regular income was say $25K and the RRSPs are entirely yours ... part of the income is going to have taxes at the $65K income level. In Ontario, the first $41K will be 20% but the additional income will be a blend of 24% and 29% taxes.

It probably makes more sense to stop the withdrawal $$$ under the $41K limit (though it might add additional years of RRSP withdrawal fees).

Most would convert to a RRIF as the minimum withdrawal amount does not have the withdrawal fee charged by the financial institution.



BeerHunter said:


> .... I might be wrong but any RPP has to be reported as income and if it were in the savings account , any withdrawals ...


Depends ... if the savings are in a TFSA, then correct.

If the savings are in a taxable account, the withdrawals aren't tax but any income, dividends or capital gains the money makes will be taxed.

Being paid a company pension for $100 or withdrawing $100 from one's RRSP means reporting $100 on one's income. Once the $100 is in a taxable account ... sure, reporting say 1% interest is peanuts but one's taxable income is still rising.


Cheers


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## OnlyMyOpinion (Sep 1, 2013)

Do you have pension income already that is allowing you to take advantage of pension splitting it with your spouse and claiming the $2000 pesion credit?
If not, converting your smallish RRSP to a RRIF would be considered pension income for that purpose.


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