# Changing the RRSP withdrawl rate



## spirit (May 9, 2009)

I have been reading this forum for a few months and really appreciate all the informed comments. I heard recently that the withdrawal rate for a RRIF just might be increased in the future. What is your opinion that in this uncertain climate it might be prudent to withdraw your RRSP holdings before you turn 72 especially if you are in the lowest tax bracket anyways.


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## AdamW (Apr 22, 2009)

spirit said:


> I have been reading this forum for a few months and really appreciate all the informed comments. I heard recently that the withdrawal rate for a RRIF just might be increased in the future. What is your opinion that in this uncertain climate it might be prudent to withdraw your RRSP holdings before you turn 72 especially if you are in the lowest tax bracket anyways.


One idea if you are in the lowest tax bracket you might want to consider is making withdrawals from your RRSP up to the limit of that bracket and putting the funds directly in a TFSA (up to the maximum $5,000 limit).

That way the funds can still grow for you tax free but you would have more freedom to pull them out in retirement and not have to worry about the taxes.

But if you are going to remain in the lowest tax bracket in retirement as well (depends on the size of your RRSP / RRIF) there might not be a huge tax advantage. This would really work well if you are in the lowest bracket now but would jump up a bracket in retirement.


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## steve41 (Apr 18, 2009)

> This would really work well if you are in the lowest bracket now but would jump up a bracket in retirement


I have seen many, many plans, and it is a very special asset configuration which results in the subject jumping into a higher tax rate in retirement. It almost never happens.


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