# RRSP question



## 1980z28 (Mar 4, 2010)

I will retire in 6 months at 56

I have maxed my rrsp to date

when I retire the only income is my savings

if I take 50,000 per year out of my rrsp for the next 15 years

is that income able to generate a rrsp deduction as my income will be 50,000 per year,so I can keep adding to my rrsp to reduce my tax payable

I am thinking that 2000 is the most I will ever need per month to live on


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## heyjude (May 16, 2009)

My understanding is that RRSP contribution room is based on "earned income", and that RRSP withdrawals do not affect the contribution room.

http://www.taxtips.ca/rrsp/rrspcontributionlimits.htm

If you have a surplus, the best place to save it is in a TFSA, if you have contribution room there.


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## 1980z28 (Mar 4, 2010)

heyjude said:


> My understanding is that RRSP contribution room is based on "earned income", and that RRSP withdrawals do not affect the contribution room.
> 
> http://www.taxtips.ca/rrsp/rrspcontributionlimits.htm
> 
> If you have a surplus, the best place to save it is in a TFSA, if you have contribution room there.


Maxed out everything

will sell a house in 6 months,will also have to find a place for that cash
my new house is almost finish,8 years building it,no mortgage or any debt ,,I will be paying lots of tax in retirement


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## heyjude (May 16, 2009)

1980z28 said:


> Maxed out everything
> 
> will sell a house in 6 months,will also have to find a place for that cash
> my new house is almost finish,8 years building it,no mortgage or any debt ,,I will be paying lots of tax in retirement


First world problems! You are fortunate to be in a situation where you have enough income to pay tax. Remember, the tax you will pay on your RRSP withdrawals is tax that was deferred many years ago. You owe this tax, and can pay it down at a lower rate than you would have paid during your (presumably) high income years.

If you have a very large RRSP, it's a good idea to draw down on it early, leaving a lower balance when you are 71 and RMDs kick in. If your TFSA is full, just invest the surplus in a non-tax sheltered account. That's what I am doing. Or you could spend it.

Also, when you reach 65, you can claim a $2000 pension tax credit based on your RRIF withdrawals.

http://www.taxtips.ca/filing/pensiontaxcredit/eligibleincome.htm

If the house you are selling is your principal residence, you will not pay any tax on the capital gains. So you are sitting pretty.


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## 1980z28 (Mar 4, 2010)

heyjude said:


> If the house you are selling is your principal residence, you will not pay any tax on the capital gains. So you are sitting pretty.


House that I am selling is the one I have lived in for the last 15 years

8 years ago I started my retirement home,i purchased 26 acres of land on the ocean and built a house as money was available,it is 98% finish.the value of the retirement house has also gone up in value

So will have to plan with a tax advisor in the new year


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## OnlyMyOpinion (Sep 1, 2013)

1980z28 said:


> ... if I take 50,000 per year out of my rrsp for the next 15 years is that income able to generate a rrsp deduction as my income will be 50,000 per year,so I can keep adding to my rrsp to reduce my tax payable...


No, whether you take your income as withdrals from your RRSP or whether you convert some/all to a RRIF and take your income from a RRIF - *neither* is a source of "earned income" that will create contribution room for you to be able to contribute back into an RRSP.
This link describes the sources that do qualify as earned income: http://www.taxtips.ca/rrsp/rrspcontributionlimits.htm


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## heyjude (May 16, 2009)

OnlyMyOpinion said:


> No, whether you take your income as withdrals from your RRSP or whether you convert some/all to a RRIF and take your income from a RRIF - *neither* is a source of "earned income" that will create contribution room for you to be able to contribute back into an RRSP.
> This link describes the sources that do qualify as earned income: http://www.taxtips.ca/rrsp/rrspcontributionlimits.htm[/URL




Thank you for reposting the same link that I posted in Post #2. It appears that we are both saying the same thing.


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## 1980z28 (Mar 4, 2010)

Thankyou for the info

Enjoy the weekend


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## canew90 (Jul 13, 2016)

Sounds like you've done well and the only thing I'd wonder about is How Much Income will your portfolio generates. If you don't need the rrsp money, leave it to continue to grow and generate higher income when you need the funds. Same with the house funds. Assume you are down sizing so there will be funds to invest from the sale. Again, find a way for the money to generate part of the income you need.


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## 1980z28 (Mar 4, 2010)

canew90 said:


> Sounds like you've done well and the only thing I'd wonder about is How Much Income will your portfolio generates. If you don't need the rrsp money, leave it to continue to grow and generate higher income when you need the funds. Same with the house funds. Assume you are down sizing so there will be funds to invest from the sale. Again, find a way for the money to generate part of the income you need.


portfolio does close to 3000 in dividends per month

I will see a tax person to see what will be best for my situation




Funny that i save so much thinking that i will need lots of cash for retirement,looks like i only need about 2k per month on the high side,hard to spend money when you have save for so long


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## TomB19 (Sep 24, 2015)

1980z28 said:


> hard to spend money when you have save for so long


Amen to that. We worked hard for our money. It didn't come easy. I don't part with it easily. lol!

Congratulations on putting yourself where you are today.


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## AltaRed (Jun 8, 2009)

But be sure to enjoy your retirement. There are so many things to do, places to see and/or charities/non-profits/causes to support and/or participate in. I have ramped up my retirement spending almost 3 fold in 10 years to have a lot of fun doing all those things. Sharing is the gift of life.


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## 1980z28 (Mar 4, 2010)

AltaRed said:


> But be sure to enjoy your retirement. There are so many things to do, places to see and/or charities/non-profits/causes to support and/or participate in. I have ramped up my retirement spending almost 3 fold in 10 years to have a lot of fun doing all those things. Sharing is the gift of life.


will travel all of NL


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## pacman (Sep 6, 2009)

1980z28 said:


> will travel all of NL


Hey, off topic, but how about a picture of your '80 Z? I have a '69 SS myself. Already spending my retirement $$ before I've even retired (I'm 56 too)

PACMAN


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## CalgaryPotato (Mar 7, 2015)

Congratulations on the upcoming retirement and on the savings you've achieved.

All told you won't pay that much tax on the 50K per year, of course if you save up a bunch of it, each year that'll generate more tax, but you can dump some of that into your TFSAs. And at this point all that extra money is kinda bonus money anyway. The bit you pay in tax on it, while it sucks to pay tax, it's better than not making the money in the first place.


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## 1980z28 (Mar 4, 2010)

pacman said:


> Hey, off topic, but how about a picture of your '80 Z? I have a '69 SS myself. Already spending my retirement $$ before I've even retired (I'm 56 too)
> 
> PACMAN





Where is your pic


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## pacman (Sep 6, 2009)

1980z28 said:


> Where is your pic











Not sure how to make it bigger.

pacman
'69 rs/ss


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## 1980z28 (Mar 4, 2010)

I will leave pics up for a couple of hours

15k spent on drivetrain,car is 2800 LBS,so it is very fast


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## pacman (Sep 6, 2009)

Very nice. Looks like fun.


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## 1980z28 (Mar 4, 2010)

Purchased car in 1981,had to store it as I could not afford to drive it

0 to 60 4.2
1/4 mile low 11`s

I have worked as a mechanic for 38 years

I built a large garage for my retirement,fully outfitted ,,I will restore cars and resell as a hobby


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