# Strategic timing of withdraws from RRSP/RRIF during the year?



## milhouse (Nov 16, 2016)

Is there a strategic approach to determining when to make RRSP/RRIF withdrawals during the year to derive benefits or reduce risk/drawbacks?

When I retire, my dividends will form the base of my retirement income. However, I also want to start withdrawing from my RRSP using VPW but can still be flexible with the amount. My initial thoughts are that making withdrawals at the end of the year is advantageous because: You know how the market has done that year and can reduce your withdrawal if results were poor (even though it's not required using VPW), it's a shorter time to get withholding taxes back, and your portfolio gets a full year to grow. 

However, if one's portfolio has nice gains early in the year, would it be more strategic to make the withdrawal then, to avoid the downside risk of your portfolio taking a hit in the latter half of the year? Ex. This year VPW suggests withdrawing 4.5% but your portfolio is up 5% by the end of March. Make the withdrawal then to avoid a potential market downturn in say October? Sure, the markets can continue to rise the rest of the year but my goal is to limit downside risk in retirement than trying to squeeze out more gains.

Is there advantages of making your RRSP/RRIF withdrawal at some other time of the year? Is there any advantage to making multiple withdrawals (understanding that one downside is that withdrawing from an RRSP may incur a fee with your financial institution while a RRIF may not).


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## agent99 (Sep 11, 2013)

Once you open a rrif, you have to make at least the specified minimum withdrawal - it is based your age or your spouse's age. And, it is based on the previous year end balance. 
When to withdraw is your choice. Some do it at year end. Others use it as income and withdraw monthly or quarterly. We draw ours in early january. This way we have funds for tfsas as well as to put aside for tax installments. Rest is withdrawn in-kind. Usually dividend payers bought in rrif in anticipation of the withdrawal.
Between 65 and 72, we opened smaller rrifs funded from rrsps. We drew from those rather than directly from rrsp. This was considered pension income and entitled us to claim the $2000 pension deduction. Timing again based on our needs rather than financial or tax benefit (if there is one)


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## milhouse (Nov 16, 2016)

Thanks for the feedback. Good point about using withdrawals as a means to fund one's TFSA early in the year and RRIF for pension deduction.


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