# RRSP withdrawal and BMOIL fees



## Tostig (Nov 18, 2020)

So in my wife's NoA, the Available RRSP contribution room for 2022 is $-4101. As I understand it, that means she has somehow overcontributed and must withdraw that amount out ASAP.

So we log into her BMO Investorline account and proceed to withdraw the money, knowing there will be a withholding tax. I'm thinking since she hasn't yet contributed the $6000 into her TFSA this year yet, she might as well try to transfer the amount from her RRSP directly into her TFSA. But the website would not let her do that because the Transfer to section has the TFSA account greyed out. However, we can transfer it into one of her investment accounts which currently has a bit of money in it. Then we learn that not only is there the expected withholding tax, there's also a withdrawal fee of $50 plus HST.

I Google BMOIL RRSP withdrawal fee and I see it in one of the results. Then I think, what about RRIF? Will BMO Investorline charge a fee everytime we draw money from an RRIF? I remember a few years back reading that there were charges if the funds were to go to another institution but not within BMO. I was surprised that BMOIL would charge a fee for the RRSP withdrawal but I could not find any results for RRIF withdrawals.

Can anybody confirm that RRIF withdrawals will have no fee at BMOIL because I can't find the answer as easily as I had found for the RRSP withdrawal fee.

Thanks.


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## Money172375 (Jun 29, 2018)

Don’t believe any bank charges a fee for a RIF withdrawal. And most, if Not all, charge a fee for A RSP withdrawal.


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## Tostig (Nov 18, 2020)

Money172375 said:


> Don’t believe any bank charges a fee for a RIF withdrawal. And most, if Not all, charge a fee for A RSP withdrawal.


Good to hear. Thanks.

At least for now.


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## Beaver101 (Nov 14, 2011)

Tostig said:


> So in my wife's NoA, the Available RRSP contribution room for 2022 is $-4101. As I understand it, that means she has somehow overcontributed and must withdraw that amount out ASAP.
> 
> So we log into her BMO Investorline account and proceed to withdraw the money, knowing there will be a withholding tax. I'm thinking since she hasn't yet contributed the $6000 into her TFSA this year yet, she might as well try to transfer the amount from her RRSP directly into her TFSA. But the website would not let her do that because the Transfer to section has the TFSA account greyed out. However, we can transfer it into one of her investment accounts which currently has a bit of money in it. Then we learn that not only is there the expected withholding tax, there's also a withdrawal fee of $50 plus HST.
> 
> ...


 ... according to BMOIL's Commission & Fee Schedule of May 2021 (hasn't been updated yet), the $50 is for an RRSP deregistration. [ I know that transfers out is $150 (plus tax) -regardless of entire or partial transfer out]. 

Since you're not deregistering, you might want to ask BMOIL about that $50 charge AND confirm that RRIF withdrawals are still free.


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## Gator13 (Jan 5, 2020)

fireseeker said:


> In case it applies to you, Investorline waives RRSP deregistration fees if you are a Platinum five-star client ($2M+).


Fireseeker provided the above information when I asked a similar question a while back.


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## OptsyEagle (Nov 29, 2009)

More important then the fees being charged is that I don't believe you are addressing your problem correctly. I am pretty sure that a personal withdrawal will not eliminate the over-contribution situation since personal withdrawals have no bearing on your contribution room.

I believe you are supposed to fill out a T3012 form to fix an over-contribution situation. Just going by memory here. Perhaps others have some thoughts.


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## Tostig (Nov 18, 2020)

OptsyEagle said:


> More important then the fees being charged is that I don't believe you are addressing your problem correctly. I am pretty sure that a personal withdrawal will not eliminate the over-contribution situation since personal withdrawals have no bearing on your contribution room.
> 
> I believe you are supposed to fill out a T3012 form to fix an over-contribution situation. Just going by memory here. Perhaps others have some thoughts.


I think our situation is now more complicated than just the T3012A form. This form assumes you made an overcontribution and left it in there. In fact, we withdrew the overcontribution amount almost immediately.

This is what actually happened.
My wife had retired in 2021. About $31,570 of her severance was sent directly to her RRSP. When we realized it was more than the $27,321 Available contribution room for 2021, she immediately withdrew about $4249 incurring withholding tax.

So in her 2021 tax return, we had to input $31,570 RRSP contribution, deduct the maximum $27,321 RRSP contribution and declare the $4249 RRSP income as indicated by the T4RSP.

So now the NoA of 2021 says the Contribution Room for 2022 is $-4101 because CRA still had the $4249 as the unused RRSP contribution when in fact that amount had been withdrawn in May or June 2021 when we discovered the overcontribution.

If that original RRSP contribution had been the correct amount, the 2022 Contribution room would be $148 only.

How do I fix that?


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## Money172375 (Jun 29, 2018)

Beaver101 said:


> ... according to BMOIL's Commission & Fee Schedule of May 2021 (hasn't been updated yet), the $50 is for an RRSP deregistration. [ I know that transfers out is $150 (plus tax) -regardless of entire or partial transfer out].
> 
> Since you're not deregistering, you might want to ask BMOIL about that $50 charge AND confirm that RRIF withdrawals are still free.


A withdrawal like the OP is considering is very likely considered a de-registration. IIRC correctly, TD would waive the fee for HPB or LLP withdrawals. As also mentioned, the proper method is to do a withdrawal of over contributions……although, that would likely be subject to a fee as well. Listen, I hate fees as well, but there is a administrative cost to some types of withdrawals. A refund of over contributions is Beyond a basic transaction.


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## Money172375 (Jun 29, 2018)

Tostig said:


> I think our situation is now more complicated than just the T3012A form. This form assumes you made an overcontribution and left it in there. In fact, we withdrew the overcontribution amount almost immediately.
> 
> This is what actually happened.
> My wife had retired in 2021. About $31,570 of her severance was sent directly to her RRSP. When we realized it was more than the $27,321 Available contribution room for 2021, she immediately withdrew about $4249 incurring withholding tax.
> ...


Talk to the branch manager and sort it out….almost all transactions can be reversed or corrected. Get ready for the stress level to go up a notch though. bank personnel hate situations like this and are rarely equipped to handle them quickly and efficiently. Unfortunately (or fortunately), the average branch advisor will go their whole careers without facing a refund of over contributions.


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## Beaver101 (Nov 14, 2011)

Money172375 said:


> A withdrawal like the OP is considering is very likely considered a de-registration. IIRC correctly, TD would waive the fee for HPB or LLP withdrawals. As also mentioned, the proper method is to do a withdrawal of over contributions……although, that would likely be subject to a fee as well.


 ... based on the OP's original post at the time of my response, it didn't appear he/his wife was "deregistering" her RRSP. He didn't say that. All he asked was "_Can anybody confirm that RRIF withdrawals will have no fee at BMOIL because I can't find the answer as easily as I had found for the RRSP withdrawal fee." _and I replied accordingly.



> Listen, I hate fees as well, but there is a administrative cost to some types of withdrawals. A refund of over contributions is Beyond a basic transaction.


 ... well, he got a response from fireseeker or OP's post #5 that BMOIL will "waive" the $50 if one is a Platinum client.

And now honestly, why would you "hate " fees at the "bank" when you worked there. And it wouldn't surprised me you do "hate" fees if they were for Costco or Netflix though.


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## Beaver101 (Nov 14, 2011)

Money172375 said:


> Talk to the branch manager and sort it out….almost all transactions can be reversed or corrected. Get ready for the stress level to go up a notch though. bank personnel hate situations like this and are rarely equipped to handle them quickly and efficiently. Unfortunately (or fortunately), the average branch advisor will go their whole careers without facing a refund of over contributions.


 ... ^ Money's advice for the "fee" fix. 

As for the $148 over-contribution, I wouldn't sweat it. Remember you're allowed a $2K lifetime over-contribution.


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## OptsyEagle (Nov 29, 2009)

Tostig said:


> I think our situation is now more complicated than just the T3012A form. This form assumes you made an overcontribution and left it in there. In fact, we withdrew the overcontribution amount almost immediately.
> 
> This is what actually happened.
> My wife had retired in 2021. About $31,570 of her severance was sent directly to her RRSP. When we realized it was more than the $27,321 Available contribution room for 2021, she immediately withdrew about $4249 incurring withholding tax.
> ...


My guess is that you still will need to use the T3012. As you have noticed the withdrawal you did has no bearing on your contribution room. So that may end up being a complete waste of time and taxes unfortuneately. That said you still need to withdraw the right amount, the right way, to get your overcontribution onside. A T3012 is for that specific purpose but I do think it might have a time limit so I would not delay. Also keep in mind that you are allowed $2,000 of over contribution but if your wife is not going to earn any work income in the future, she may not be allowed to deduct that in the future so getting the entire $4,101 out is probably her goal.

Good luck.


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## Beaver101 (Nov 14, 2011)

Tostig said:


> I think our situation is now more complicated than just the T3012A form. This form assumes you made an overcontribution and left it in there. In fact, we withdrew the overcontribution amount almost immediately.
> 
> This is what actually happened.
> My wife had retired in 2021. *About $31,570 of her severance was sent directly to her RRSP. When we realized it was more than the $27,321 Available contribution room for 2021*, she immediately withdrew about $4249 incurring withholding tax.
> ...


 ... on re-reading this post and to provide further input (though not asked), I think you better be absolutely sure there's a $27,321 RRSP room available as a retiring allowance from the severance.


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## Tostig (Nov 18, 2020)

It looks as if my original concern is now moot. We won't be withdrawing out our over contribution from the RRSP because we've already done it in 2021.

So having filled-out the T30120A and the T746, we're going to have to talk directly to CRA about that $-4101.


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## Eclectic21 (Jun 25, 2021)

Tostig said:


> I think our situation is now more complicated than just the T3012A form. This form assumes you made an overcontribution and left it in there. In fact, we withdrew the overcontribution amount almost immediately.
> 
> This is what actually happened.
> My wife had retired in 2021. About $31,570 of her severance was sent directly to her RRSP. When we realized it was more than the $27,321 Available contribution room for 2021, she immediately withdrew about $4249 incurring withholding tax ...


And did her T4 show an amount in box 66 for the eligible retiring allowance?
Note that this amount does not use RRSP contribution room, the way I read this following taxtips.ca article.








TaxTips.ca - Severance or retiring allowances - defer tax


TaxTips.ca - Defer tax by transferring your severance or retiring allowance to an RRSP




www.taxtips.ca






Cheers


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