More than ever, investors need advice for planning their retirement income. Low interest rates and volatile markets make it difficult for people wanting a stable and durable flow of investment income .
Your RRSP (registered retirement savings plan) serves to accumulate funds for retirement while your RRIF (registered retirement income fund) serves, when the time comes to provide you with income from your savings . Income from a RRIF is fully taxable.
You can convert your RRSP to a RRIF at any time, but you must convert before the end of the year you reach 71. The first payment however can be made during the following year. Your financial situation will determine when you should start your RRIF, for example, when income from other sources is sufficient a person can prefer to wait until age 71 and leave his RRSP to continue growing tax free. RRIF’s are flexible, you can change the amount of income received from a RRIF according to your needs and for tax planning purposes.
You must withdraw a minimum amount from your RRIF every year, the minimum amount is determined annually according to a percentage of your RRIF balance. There is no maximum amount that can be withdrawn. For example at age 71, the minimum withdrawal rate is 5.28% , for 100 000$ in a RRIF in January , the minimum payment will be 5 280$ for the year. The minimum percentage increases every year.
You choose the investments that will compose your RRIF according to your needs and investor profile. I can help you structure and diversify your RRIF portfolio to provide you with a regular income for as long as possible.
Steve Koncevich, B.A. R.L.U.
Mutual Funds Representative, Peak Investment Services Inc.