RRIF Reduction Saves Tax
As part of its pandemic response, in March 2020 the federal government reduced the minimum withdrawal rate for registered retirement income funds (RRIFs) by 25%. This temporary measure offers a tax-saving opportunity.
High income retirees who tapped other income sources might be able to turn this reduction into a lower tax bill.
An RRIF is what a Registered Retirement Savings Plan must be converted into, by no later than age 71. The government requires retirees to withdraw a minimum amount yearly and begin paying back all that tax you saved through your contributions over the years.
Good financial planning includes strategically leveraging such opportunities to reduce taxes. Ask your Financial Advisor to review your RRIF toward lowering your tax bill.
If the amount you withdrew was more than the minimum amount, you won’t be able to recontribute any excess back to your RRIF, but you can invest it elsewhere.
Every year brings opportunities to plan smarter and save more tax. Sit down with your Financial Advisor to develop a winning strategy that will enhance your wealth.