@wellbuiltwealth , could you please make a video outlining best approach for a person with DCPP, stock match program , rrsp, fhsa and tfsa . How much in each of these accounts should we deposit to have great retirement portfolio
My wife never watch anything on RUclips, but I think this time I MUST talk to her to watch this one video. It is exactly, EXACTLY, what we need to know.
Such a great video! 41 years old and definitely going to drawdown my RRsP and Lira as soon as I can and will live on my TFSA, Taxable brokerage and pension at 60. Beautiful!
Possibly one of your longest videos, and one of your best! THANK YOU once again for sharing your knowledge and having each of us question & learn all the various options. Much Love from Montreal.
Wow! What an awesome Video….This video is priceless. I appreciate from the bottom of my heart. I am 79 and it is time I start looking into my Riff Acct Thank you sooo much 🙏🙏🙏
I personally enjoy this type of content but for so many people it can be super dry. You do an amazing job of explaining the information and even make it super enjoyable. Thank you for doing what you do!
I was thinking about this exact topic recently and couldn’t find much content online. You’re good at finding topics that don’t already have a billion videos about!
Thank you so much for sharing these scenarios which is a reality for some. You explained it beautifully and I’m glad you didn’t use income splitting as a strategy!
Like Frank Sinatra, right or wrong, I did it my way. Having lost 50% of 11 years off my CPP due to a divorce, I made the decision to wait until age 70 to take both CPP and OAS because of the 30% and 36% increases, respectively. In the interim, I made systematic, annual withdrawals from my RRSP in oder to deplete them by age 70. I used my RRSP withdrawals to top up my TFSA each year with the remainder, after-tax income going into my investment portfolio. At the end of the day, I paid no income tax between age 60 -70 and reaped the growth of both my investment portfolio and TFSA. At age 70, I have a small LIF and no RRIF income. My income now consists of a company pension, CPP, and OAS. Even with their combined totals, clawback doesn't enter into the equation. Neither my investment advisor nor my accountant truly understood what I was doing, but in the end, I'm doing just fine. I know it's not right for everyone, but it worked for me.
This is why the TFSA is so amazing. The longer it lives the more dividends it pays out. Also, remember that you don't need to draw down the TFSA through your estate at death. You'll have big bucks available in the last years of your life in case you need to splurge on care facilities, life-extension treatments, trips to outer space, you name it. Or just take an extra 25k per year in income during the last 20 years of life to make things a little easier with some home supports or cleaning services. Less tax = less tax.
@@kuk1m0n5t3r I had an advisor years ago that was charging 3%. I finally got rid of him and I have had better returns just by learning investment strategies on RUclips.
Wow!! That's what I call informative, precise and pertinent content..Thanks as this is exactly my wife's and I situation...Too big RRSP...Hard to meltdown...It keeps growing because the stock market is on fire....But I know this will not be the case for ever...
If you think the stock market will enter a protracted down cycle, then melting down RRSP/RRIF and delaying CPP will reduce your risk to sequence of returns. That's because you are melting down while the market is up and letting CPP increase 7.2% plus inflation per annum which is guaranteed no matter what the market is doing.
Great video. I just did a retirement optimized simulation and the simulation came back recommending earlier rather than later withdrawals. Your example is almost identical to my own. Couldn’t understand it and your video made it very clear- thanks
There has been a push for life insurance to help with Estate planning, my worry is all the new tax changes that could really impact a lot of these down the road. I shall speak with my husband about how the change in withdraw strategy can help with that , instead of buying another product . Thank you !
Rhys, best video that you've put out thus far explaining a lot of options of what to do with your investments at retirement. I'm still a good 10 + years away for retirement but need to figure out if I'm on the right track. I've enjoyed your videos and found them very knowledgeable to help me plan for my future. Thanks and keep up the good work.
Your way of telling a story is very clear. Luv your channel ❤. BTW I'm making my move to the Philippines. Thanks to your expertise and helping me plan out my finances.
SUGGESTION…I love your videos. So informative. BUT! Could you use different colours in your bar graphs, please? I am not colour blind, and yet I have huge difficulties with the 50 shades of blue-grey in the graphs. Perhaps use red, bright yellow, lime green, etc. Thanks so much😊
Love your channel and they should teach finances in school when people are young instead of worrying about it too late in life. I'm retired at 54 and my spouse retires early next year at 59. No mortgage, car payments, or children. We both have defined pensions and converted one of our RRSPs to RRIF two years ago. It's strange being at this point of our lives.
Another excellent video Rhys... never too long when the content is this good. Appreciate this very much and love the presentation style of your video's and graphics. Really makes things easy and crystal clear to understand. Love it.
Could you please do a segment on retired people who are Canadian citizens but non resident for income tax purposes as it pertains to CPP, OAS and RRIf's and a meager income?
Wow....this was an excellent presentation on the topic. Please keep doing what you are doing!! I will be encouraging others to visit your channel. All the best!
another very solid video and very relevant to mine/wife's situation 500K in RRSP at + 250K in TFSA's at age 50! if RRSP left to 71 we're looking at 2.0M (7%-rule of 72)..
Good video. I think you could do one scenario for taking RRSP before retirement and investing it in TFSA and cash account comparison. For the scenario you gave, did they top up their TFSA every year till 90?
Very well explain .. 4 years up to our intended retirement and this topic applied quite well to our situation . I had a plan drawn by a financial planner from my financial institution (based on graphics seems to be a similar software) but not sure he did the right approach. there is not ladder style retirement and while it's using some metdown technic , viewing your explanation , I think my plan need more tweaking. Thank you.
If a married couple make similar income, and only one has a defined benefit pension, should both still save in an RRSP? Right now, our strategy is to put 2/3 of our investing dollars in TFSA and 1/3 in RRSP. Thank you.
Thank you for this! A lot to chew on. Any thoughts on, when first retired (like now), continuing to contribute to your TFSA? Could you take more from your RRSP to cover that?
I really love your videos and this one in particular helped me look at my finances differently. My takeaway was to build up my TFSA ASAP as I have almost ignored it while using the matching program of my employer for the defined contribution pension. I was going to pause the RRSP matching as I have amassed a very large pension/rrsp compared to TFSA. One issue I still have debates with colleagues is that I’m giving up a lot of money from the matching, but I want to have as much runway for the TfSA to grow. Any thoughts?
Hmmm. It’s tough for me to say without seeing it all, but I wouldn’t be too quick to give up the matching. Free money is free money, even at high tax brackets…
Great video!!! Very clearly spelled out. Something could mention is with RSP get the tax break going in... Sure the big marketing topic makes us participate... BUT my opinion make certain you are at least getting 30 percent tax break. Pretty sure I contributed lots getting a smaller break on contribution which further made RSP even more of a trap.
I'm 65 years old, we have been retired 7 years, we have 900K in RSP. I'd brag net worth is same since retiring, I essentially stopped our DRIPS and took all that ( taxable ) dividend $ out to supplement income. Now I realize I need a more aggressive melt-down strategy, can't continue just keeping the same 900K principle. We turned the RSP's into RIF's for next year. Great good start bus as Rhy explains the RIF drops withdrawal fee and is slick withdrawal method... but I have to do even more Withdrawal's on top of the RIF minimum because portfolio has been making increase about the same as the dividend amounts I have been taking out. Gotta be careful with RSP's, on advantage we have is my wife has very low income so get a bit of overall tax advantage getting RSP money out. I will delay her OAS and CPP to get more RSP out at slightly better tax hit. Thank You again for a GREAT video!
Great video thanks for the hard work!!! I opened a corp margin account, and was thinking about investing a few 100K of my company cash. I would be super interested in your thoughts on the topic?
Well, thank you! As for the corp investing account, that can be a great idea if you have plenty of retained earnings. Lots to consider in terms of implications but maybe that can be an upcoming video topic. Cheers
I have an RRSP related question. I have an investor who invests in properties I buy theough his RRSP. Its tied as a second mortgage at another property. Whats the best way to sheild his RRSP earnings frim taxes down the road?
About the software you use to do simulations, does it use Net Present Value (NPV) concepts to figure out which scenario has the higher NPV? You can replace NPV concepts with discounted cashflows (DCF), if you wish. But same question. If so, where would we see that in the software results?
excellent content as usual. thank you for making these videos. i know i dont want to be dropped kicked in the face when i retire. Also why does our country make us pay taxes when we retire, you know we have worked are entire lives paying them can they not give us a break when we hit 65..... just a thought.
So who is going to fund all the benefits and health coats for retirees? All the tax payers, not government. Tax for RRIF is delayed tax we haven’t pay for the funds in our RRSP account.
My wife and I both have Defined Benefit Pension and I keep my health benefits for life. I will probably have about $50-70k in RRSP when I retire at 50. My plan is to withdraw the yearly TFSA limit and move the money from RRIF to TFSA until it’s gone.
@@DoneByDno, he meant what he said. Only thing is now he will just be spending less starting at age 50 and then will wind up with a bunch in his tfsa. Sure you could withdraw tax free then but you’ve just deprived yourself in the prime early years of retirement. Im in a similar boat trying to figure out how to avoid this
@@jakeh2049 the original post was edited so not sure what it was originally but seems to now say he's wanting to withdraw whatever amount + taxes from his RRIF so he can put these funds to max out his TFSA each year. Nothing wrong with this strategy from my perspective if he has enough to live on from his DB benefits. His problem isn't really that large neither as he's retiring young at 50 so has many years to get out only 70K of RRSP money. 70K @ 6% with a $5K annual withdrawal money is gone in 27 years at age 77, increase withdrawal to $7K and money is gone in 14 1/3 years before he hits age 65.
On a side note 70k in a RRSP is not enough to retire…. I’m 32 and have that much in my RRSP, you need many volumes more 😅 yes even with a DB pension plan, do the math.
@@Eminetics 70K may very well be enough if the DB pension benefits, CPP and OAS cover their financial requirements in retirement. It certainly isn't a huge problem though as I agree it's a very small amount of RRSP funds to manage during their 30+ years (hopefully) of retirement.
Another option not mentioned: Work less and retire earlier! This way you work less, build up a smaller RRSP and enjoy a longer retirement doing what you love while you are still healthy!
Please can you do a video on RRSP Meltdown strategies? It is my understanding that I can borrow funds through something like a HELOC, use these funds to buy stocks/property/etc and the INTEREST on the loan can be paid tax free by the RRSP account. In this way your RRSP funds are drawn down to pay for investments that grow outside the RRSP. Those investments can be wrapped into a "Living Interest" Trust fund. The income can be passed to your kids and when they die the capital can be donated to a charity or something. The "etc" can be any business that is "reasonably expected to make a profit", so a cottage, for example, that is rented out once in a while, and has lots of tax write-offs for the maintenance.
Just curious in all the scenarios explored, does OAS recovery tax gets triggered in any one of them? Nice to see an example of balancing OAS claw back and reduced / eliminated terminal RRIF tax.
When I cover total tax in each scenario if you look to the immediate left you can see the OAS impact. You’ll notice that in this couple’s case it really isn’t ever an issue. That is simply due to income splitting. There are a few cases where there is a small amount of clawback but that is due to the final year of income being particularly large.
This was a fantastic video and eye opening for me. Any way we can get our hands on that software you use. I see in the description you use conquest but I don’t see anyway to download or even pay for a subscription to use it.
Hi Rhys, currently 43 and planning to retire between 55 and 60, when would you say would be a good time to start looking at the plan? Great videos by the way
Isn’t it ironic that we are all born with nothing ,spend a lifetime to accumulate something and then ultimately die with nothing….. Meaning that a life well lived is one that leaves behind positive memories and money for others….
Is there a rule of thumb as to the max size of your RRSP given standard assumptions; e.g. once you hit $1MM in combined RRSPs, stop contributing and build non registered, etc otherwise meltdowns become difficult. Thx.
Lots of people do use that 1M rule but it’s definitely not a real rule. Sometimes it still makes sense to build it higher. Totally depends on the context and the variables.
It's also worth mentioning that eligible and non eligible dividends in a non reg account inflates taxable income which may possibly present the tipping point to trigger OAS clawback. That's because of the gross up rule. So, moving investments away from dividends and towards capital gains can help salvage OAS for investors with fat RRSP/RRIF accounts.
I have been saying from the day TFSA began,if your an average wage earner ,even a little above,max out TFSA,RRSP should be a side note.So large TFSA,second ,large non reg. acc.,hopefully ,third,RRSP if u still have some to invest.But seriously ,if only TFSA and non reg. accounts,you will be very wealthy at retirement.I believe RRSP,s are a tax head ache!
You can split your rrsp with different institutions bypassing one big rrsp/rrif amounts. This way the amount withdrawn is smaller as income from non registered accounts gets added to lower rrif wirhdrawals
The other thing ton consider is that the estate value of, say $500K at 90, is calculated in today's dollars. That $500K, when you are 90 years old, will have a real value of maybe half or less of that due to the 3% inflation every year. Also, the tax brackets will have moved with the passage of time. I am all for paying less tax in today's world, and trying to at least not let my RRIF grow. Take any excess and after paying myself, put it into my TFSA and then non-registered account. The RRIF will naturally melt down through time as inflation takes its toll.
One big hole in your retirement scenarios is the cost of end of life care. If one has any sort of wealth, you won't be in a gov't facility but instead dropping 8-10k per month per person for private care.
@@AlexHaan-j2j only a vary small number of old people actually end up in a LTC facility and then on average it's not for years but for months so overall costs aren't as great as one might expect. Although it could definitely happen and it would definitely suck when or if it does happen.
If one of the couple has much higher income and subsequent CPP than the other, should they aim for equal RRSP values at retirement or should the RRSP of the spouse with lower income/CPP be higher?
@@wellbuiltwealth Fair point. This would be for retirement before 65 - say at 60. Lower CPP spouse is a couple of years younger. Thanks for all these videos, they really help!
@@kevinryan024you’re welcome! And yes, you wanna make sure there’s RRSPs in the lower income spouses hands so that you can manually income split. This is where a Spousal RRSP can come in handy.
You can always convert some of RRSP( from large RRSP account) to an annuity with survival benefit, it qualify for income splitting at any age just like DB pension.
I haven't watched yet but my RRSP is too big and needs to be melted. I'm starting soon at age 62. A lot of my plans seem to cause OAS clawback in the first few years after 65. How to reduce?
Your marginal tax rate will probably be at 43%. If you collect OAS with clawback, you add the equivalent of another 15%, making it around 58%. You could consider melting a bit more RRSP/RRIF and delay your CPP and OAS by a few years. As long as you look at your marginal tax rate, get as much as you can out before collecting OAS. Then, use TFSAs, they will not impact the clawback.
If the monthly ability the same for all strategies at 7.15k each month, who cares about the tax paid as long as the legacy amount is the largest? If I am getting 7.15k each month and leave with $1m, whether the tax paid is $1m or $1 is not relevant to me, right? I should be focus on what I am getting instead of what I am NOT getting
Well done, thanks for making this video. Having a huge RRSP is a nice “problem” to have and probably wouldn’t be the case for many Canadians. I have a question regarding life insurance for the purpose of leaving a tax free wealth to our children. Have you done a video on this subject? If not, would you consider doing one? Thanks
Don’t want to pay too much tax on your RRSP/RRIP withdraw, properly retirement income planning. It Magoo both have large DB pensions, why do they contribute so much to their RRSP? Better question yet, why do they wait till 65 to retire?
![ARGENTINA vs. PERÚ [1-0] | RESUMEN | ELIMINATORIAS SUDAMERICANAS | FECHA 12](http://i.ytimg.com/vi/xtI25ENDDSY/mqdefault.jpg)
It blows my mind how you can take a topic that’s so murky and vague at the start, and by the end it’s crystal clear and easy to understand. Thank you!
Wow. Thank you 🤓
@wellbuiltwealth , could you please make a video outlining best approach for a person with DCPP, stock match program , rrsp, fhsa and tfsa . How much in each of these accounts should we deposit to have great retirement portfolio
My wife never watch anything on RUclips, but I think this time I MUST talk to her to watch this one video. It is exactly, EXACTLY, what we need to know.
Such a great video! 41 years old and definitely going to drawdown my RRsP and Lira as soon as I can and will live on my TFSA, Taxable brokerage and pension at 60. Beautiful!
Thanks :)
Best Canadian financial content on RUclips! Share this channel with your young adult kids or anyone who needs to improve their financial literacy
Thank you 🤓
Possibly one of your longest videos, and one of your best! THANK YOU once again for sharing your knowledge and having each of us question & learn all the various options. Much Love from Montreal.
And thank you! 🤓
But yeah, definitely my longest… 😬
Wow! What an awesome
Video….This video is priceless. I appreciate from the bottom of my heart. I am 79 and it is time I start looking into my Riff Acct
Thank you sooo much 🙏🙏🙏
Great video. One of the best I’ve seen in a while. Does a great job of the big picture.
Thank you very much!
My biggest takeaway from this.. Max out your TFSA
TFSA room is very very precious.
Very well done. Comprehensive, but easy to understand. Thank you!
Thank you! I was nervous that it was too long. Didn’t mean for that…
Very good growth on your channel ,congrats,more people need to listen to u than banking (sales people),i hope this is growing your client base!
I personally enjoy this type of content but for so many people it can be super dry. You do an amazing job of explaining the information and even make it super enjoyable. Thank you for doing what you do!
Great video! Reinforces the need to be strategic about scenarios and melting down.
This video is so well done! Rhys’ sense of humour makes an essentially dry topic quite enjoyable.
🤓😊
I was thinking about this exact topic recently and couldn’t find much content online. You’re good at finding topics that don’t already have a billion videos about!
Impressive video. You are the exact type of creator that RUclips needs more of.
Wow, thank you! 😊
Really appreciate this video!! Thank you so so much for explaining this is a way the average person can understand.
Great content, and I'm so glad it's for Canadians, now can you please do a video specially on what people should do in their 40s?
Thank you so much for sharing these scenarios which is a reality for some. You explained it beautifully and I’m glad you didn’t use income splitting as a strategy!
Glad it was helpful!
Like Frank Sinatra, right or wrong, I did it my way. Having lost 50% of 11 years off my CPP due to a divorce, I made the decision to wait until age 70 to take both CPP and OAS because of the 30% and 36% increases, respectively. In the interim, I made systematic, annual withdrawals from my RRSP in oder to deplete them by age 70. I used my RRSP withdrawals to top up my TFSA each year with the remainder, after-tax income going into my investment portfolio. At the end of the day, I paid no income tax between age 60 -70 and reaped the growth of both my investment portfolio and TFSA. At age 70, I have a small LIF and no RRIF income. My income now consists of a company pension, CPP, and OAS. Even with their combined totals, clawback doesn't enter into the equation. Neither my investment advisor nor my accountant truly understood what I was doing, but in the end, I'm doing just fine. I know it's not right for everyone, but it worked for me.
Sounds like you did a good ole RRSP/RRIF meltdown. Good on ya.
I'm in the same boat and my financial advisor seemed clueless.
Thanks for sharing. Good to know the plan works as it’s similar plan I have for our retirement.
What if your company doesn’t give you pension though? 😢
Good on you brother! It's always wise to think ahead.
This is why the TFSA is so amazing. The longer it lives the more dividends it pays out.
Also, remember that you don't need to draw down the TFSA through your estate at death. You'll have big bucks available in the last years of your life in case you need to splurge on care facilities, life-extension treatments, trips to outer space, you name it. Or just take an extra 25k per year in income during the last 20 years of life to make things a little easier with some home supports or cleaning services.
Less tax = less tax.
“More trips to outer space” 😂 Yes!!
Wow, that is a lot to think about. Thanks for laying out the options in such an easy to understand manner.
The info is better than what my advisor provided and I don’t have to pay 4% of the portfolio (his fees!)
OMG! Please tell me this is a typo. 4% is robbery.
@@kuk1m0n5t3r I had an advisor years ago that was charging 3%. I finally got rid of him and I have had better returns just by learning investment strategies on RUclips.
Wow!! That's what I call informative, precise and pertinent content..Thanks as this is exactly my wife's and I situation...Too big RRSP...Hard to meltdown...It keeps growing because the stock market is on fire....But I know this will not be the case for ever...
Glad it was helpful!
If you think the stock market will enter a protracted down cycle, then melting down RRSP/RRIF and delaying CPP will reduce your risk to sequence of returns. That's because you are melting down while the market is up and letting CPP increase 7.2% plus inflation per annum which is guaranteed no matter what the market is doing.
@@signal8375 Agree!
@@signal8375very well put, thanks.
Great video.
I just did a retirement optimized simulation and the simulation came back recommending earlier rather than later withdrawals. Your example is almost identical to my own. Couldn’t understand it and your video made it very clear- thanks
There has been a push for life insurance to help with Estate planning, my worry is all the new tax changes that could really impact a lot of these down the road.
I shall speak with my husband about how the change in withdraw strategy can help with that , instead of buying another product .
Thank you !
Another great video. Thanks very much for such clear and logical scernarios.
Agree excellent video and well spoken
Rhys, best video that you've put out thus far explaining a lot of options of what to do with your investments at retirement. I'm still a good 10 + years away for retirement but need to figure out if I'm on the right track. I've enjoyed your videos and found them very knowledgeable to help me plan for my future. Thanks and keep up the good work.
Thank you 🤓
Excellent video, as always. I always check your channel first for new videos 🙂
Thank you!!
I made my husband watch your video and he was impressed by your presentation.
Fantastic, thanks for explaining and simplifying a huge win for anyone wiling to listen.
Thank you! And I know… 28 mins is brutal 😬
Excellent detailed analysis 👍
Thank you kindly!
Your way of telling a story is very clear. Luv your channel ❤. BTW I'm making my move to the Philippines. Thanks to your expertise and helping me plan out my finances.
Awesome!!
SUGGESTION…I love your videos. So informative. BUT! Could you use different colours in your bar graphs, please? I am not colour blind, and yet I have huge difficulties with the 50 shades of blue-grey in the graphs. Perhaps use red, bright yellow, lime green, etc. Thanks so much😊
Another incredibly informative and easy to comprehend video. Thanks for sharing your knowledge Rhys!
Thank you!
Love your channel and they should teach finances in school when people are young instead of worrying about it too late in life. I'm retired at 54 and my spouse retires early next year at 59. No mortgage, car payments, or children. We both have defined pensions and converted one of our RRSPs to RRIF two years ago. It's strange being at this point of our lives.
Another excellent video Rhys... never too long when the content is this good. Appreciate this very much and love the presentation style of your video's and graphics. Really makes things easy and crystal clear to understand. Love it.
Thank you 🤓
Awesome video Rhys, just fantastic and on point.
Thank you! Took me way too long to make so I’m glad you’re getting something out of it 🤓
Could you please do a segment on retired people who are Canadian citizens but non resident for income tax purposes as it pertains to CPP, OAS and RRIf's and a meager income?
Store lower growth things like bonds in your RRSP and use your TFSA to put growth assets into.
Wow....this was an excellent presentation on the topic. Please keep doing what you are doing!! I will be encouraging others to visit your channel.
All the best!
Thank you! Will do!
another very solid video and very relevant to mine/wife's situation 500K in RRSP at + 250K in TFSA's at age 50! if RRSP left to 71 we're looking at 2.0M (7%-rule of 72)..
Eye opening!!! Things to think about.
Excellent video, I need to watch more!
Awesome video….one of your best yet!!!!👍❤️🙏
Wow, thank you 🤓
Excellent content! Looking forward to seeing more. Keep up the great work.
Good video. I think you could do one scenario for taking RRSP before retirement and investing it in TFSA and cash account comparison. For the scenario you gave, did they top up their TFSA every year till 90?
Very well explain .. 4 years up to our intended retirement and this topic applied quite well to our situation . I had a plan drawn by a financial planner from my financial institution (based on graphics seems to be a similar software) but not sure he did the right approach. there is not ladder style retirement and while it's using some metdown technic , viewing your explanation , I think my plan need more tweaking. Thank you.
That is a fantastic and clear explanation! Thank you!
You're very welcome!
If a married couple make similar income, and only one has a defined benefit pension, should both still save in an RRSP? Right now, our strategy is to put 2/3 of our investing dollars in TFSA and 1/3 in RRSP. Thank you.
Tax to death and I mean death. Thank you for the video, so helpful!
Wow. This is so informative. Thank you!
Thanks for this!
Thanks for this video. Is the software you used publicly available? Or is it just for financial advisors?
You’re welcome!
The software is only available via advisors.
Great advice, thank you.
This is a fantastic video. Super easy to understand.
Thank you for this! A lot to chew on. Any thoughts on, when first retired (like now), continuing to contribute to your TFSA? Could you take more from your RRSP to cover that?
You’re welcome! And the answer all depends on your tax brackets. But if the tax hit isn’t too nasty to do it, then fill your boots :)
A good and logical presentation. Thank you.
Thanks for the informative video, Reece!
I really love your videos and this one in particular helped me look at my finances differently. My takeaway was to build up my TFSA ASAP as I have almost ignored it while using the matching program of my employer for the defined contribution pension. I was going to pause the RRSP matching as I have amassed a very large pension/rrsp compared to TFSA. One issue I still have debates with colleagues is that I’m giving up a lot of money from the matching, but I want to have as much runway for the TfSA to grow. Any thoughts?
Hmmm. It’s tough for me to say without seeing it all, but I wouldn’t be too quick to give up the matching. Free money is free money, even at high tax brackets…
Great video!!! Very clearly spelled out. Something could mention is with RSP get the tax break going in... Sure the big marketing topic makes us participate... BUT my opinion make certain you are at least getting 30 percent tax break. Pretty sure I contributed lots getting a smaller break on contribution which further made RSP even more of a trap.
I'm 65 years old, we have been retired 7 years, we have 900K in RSP. I'd brag net worth is same since retiring, I essentially stopped our DRIPS and took all that ( taxable ) dividend $ out to supplement income. Now I realize I need a more aggressive melt-down strategy, can't continue just keeping the same 900K principle. We turned the RSP's into RIF's for next year. Great good start bus as Rhy explains the RIF drops withdrawal fee and is slick withdrawal method... but I have to do even more Withdrawal's on top of the RIF minimum because portfolio has been making increase about the same as the dividend amounts I have been taking out. Gotta be careful with RSP's, on advantage we have is my wife has very low income so get a bit of overall tax advantage getting RSP money out. I will delay her OAS and CPP to get more RSP out at slightly better tax hit. Thank You again for a GREAT video!
Great point. I cover that in the RRSP video that I referenced in this vid.
Great video. Thanks
Great informative video. Does it apply to LIRA as well? Also, how exactly does withdrawal work if all my RRSP/LIRA are in stocks? Thanks.
Nicely explained options, thanks.
Thank you for the video. It was really insightful!
Love your stuff!
Great video thanks for the hard work!!!
I opened a corp margin account, and was thinking about investing a few 100K of my company cash. I would be super interested in your thoughts on the topic?
Well, thank you!
As for the corp investing account, that can be a great idea if you have plenty of retained earnings. Lots to consider in terms of implications but maybe that can be an upcoming video topic.
Cheers
I have an RRSP related question. I have an investor who invests in properties I buy theough his RRSP. Its tied as a second mortgage at another property. Whats the best way to sheild his RRSP earnings frim taxes down the road?
About the software you use to do simulations, does it use Net Present Value (NPV) concepts to figure out which scenario has the higher NPV? You can replace NPV concepts with discounted cashflows (DCF), if you wish. But same question. If so, where would we see that in the software results?
excellent content as usual. thank you for making these videos. i know i dont want to be dropped kicked in the face when i retire. Also why does our country make us pay taxes when we retire, you know we have worked are entire lives paying them can they not give us a break when we hit 65..... just a thought.
Thank you! And you’re welcome :)
So who is going to fund all the benefits and health coats for retirees? All the tax payers, not government. Tax for RRIF is delayed tax we haven’t pay for the funds in our RRSP account.
Honestly, they really can't. We like to complain about our taxes, but the overall Canadian tax base/take is merely the OECD average.
You do get a break. Age credits, pension income splitting, etc. In this case they will average around 10% tax over the course of their retirement.
My wife and I both have Defined Benefit Pension and I keep my health benefits for life. I will probably have about $50-70k in RRSP when I retire at 50. My plan is to withdraw the yearly TFSA limit and move the money from RRIF to TFSA until it’s gone.
@@BrandonCharlebois I think you meant to say
"My plan is to withdraw the yearly 'RRIF' limit and move the money from RRIF to TFSA until it's gone."
@@DoneByDno, he meant what he said.
Only thing is now he will just be spending less starting at age 50 and then will wind up with a bunch in his tfsa. Sure you could withdraw tax free then but you’ve just deprived yourself in the prime early years of retirement.
Im in a similar boat trying to figure out how to avoid this
@@jakeh2049 the original post was edited so not sure what it was originally but seems to now say he's wanting to withdraw whatever amount + taxes from his RRIF so he can put these funds to max out his TFSA each year. Nothing wrong with this strategy from my perspective if he has enough to live on from his DB benefits. His problem isn't really that large neither as he's retiring young at 50 so has many years to get out only 70K of RRSP money. 70K @ 6% with a $5K annual withdrawal money is gone in 27 years at age 77, increase withdrawal to $7K and money is gone in 14 1/3 years before he hits age 65.
On a side note 70k in a RRSP is not enough to retire…. I’m 32 and have that much in my RRSP, you need many volumes more 😅 yes even with a DB pension plan, do the math.
@@Eminetics 70K may very well be enough if the DB pension benefits, CPP and OAS cover their financial requirements in retirement. It certainly isn't a huge problem though as I agree it's a very small amount of RRSP funds to manage during their 30+ years (hopefully) of retirement.
Another option not mentioned: Work less and retire earlier! This way you work less, build up a smaller RRSP and enjoy a longer retirement doing what you love while you are still healthy!
Great video. There's the Bible again. Is this like the plumbers' ads in the newspaper with the little fish icon?
Please can you do a video on RRSP Meltdown strategies? It is my understanding that I can borrow funds through something like a HELOC, use these funds to buy stocks/property/etc and the INTEREST on the loan can be paid tax free by the RRSP account. In this way your RRSP funds are drawn down to pay for investments that grow outside the RRSP. Those investments can be wrapped into a "Living Interest" Trust fund. The income can be passed to your kids and when they die the capital can be donated to a charity or something. The "etc" can be any business that is "reasonably expected to make a profit", so a cottage, for example, that is rented out once in a while, and has lots of tax write-offs for the maintenance.
Just curious in all the scenarios explored, does OAS recovery tax gets triggered in any one of them? Nice to see an example of balancing OAS claw back and reduced / eliminated terminal RRIF tax.
When I cover total tax in each scenario if you look to the immediate left you can see the OAS impact. You’ll notice that in this couple’s case it really isn’t ever an issue. That is simply due to income splitting. There are a few cases where there is a small amount of clawback but that is due to the final year of income being particularly large.
@@wellbuiltwealth Thanks!
This was a fantastic video and eye opening for me. Any way we can get our hands on that software you use. I see in the description you use conquest but I don’t see anyway to download or even pay for a subscription to use it.
Thanks! And yeah, it’s only available via advisors.
@@wellbuiltwealth well that sucks. I guess I will be trying to hire you in a decade. Lol.
Hi Rhys, currently 43 and planning to retire between 55 and 60, when would you say would be a good time to start looking at the plan? Great videos by the way
Thank you!
As soon as you can, I would argue. Doesn’t have to be through us but you should do a deep dive asap to help shape your trajectory.
Nice video! Does the accounting assume the taxable brackets change at 3% over time?
The software does build inflation in across the board.
OAS clawback is calculated on net income. Therefore is it correct to say annual donations to charity wont offset any OAS clawbacks?
Isn’t it ironic that we are all born with nothing ,spend a lifetime to accumulate something and then ultimately die with nothing…..
Meaning that a life well lived is one that leaves behind positive memories and money for others….
I am a victim of my own success but I shall not complain! 😂
Thank you. So clear.
Is there a rule of thumb as to the max size of your RRSP given standard assumptions; e.g. once you hit $1MM in combined RRSPs, stop contributing and build non registered, etc otherwise meltdowns become difficult. Thx.
Lots of people do use that 1M rule but it’s definitely not a real rule. Sometimes it still makes sense to build it higher. Totally depends on the context and the variables.
It's also worth mentioning that eligible and non eligible dividends in a non reg account inflates taxable income which may possibly present the tipping point to trigger OAS clawback. That's because of the gross up rule. So, moving investments away from dividends and towards capital gains can help salvage OAS for investors with fat RRSP/RRIF accounts.
Hired.
THe Canadian Dividend tax credit would be another way on paying less taxes on dividends received outside of your RRSP/RRIF.
That’s the problem I’ve always wanted 😂
Super engaging and clear presentation 👍🏽
So, I think I should use my future RRIF account between age 55-65.
I have $445,000.00 in a RRSP/Pension RRSP.
I have been saying from the day TFSA began,if your an average wage earner ,even a little above,max out TFSA,RRSP should be a side note.So large TFSA,second ,large non reg. acc.,hopefully ,third,RRSP if u still have some to invest.But seriously ,if only TFSA and non reg. accounts,you will be very wealthy at retirement.I believe RRSP,s are a tax head ache!
You can split your rrsp with different institutions bypassing one big rrsp/rrif amounts. This way the amount withdrawn is smaller as income from non registered accounts gets added to lower rrif wirhdrawals
After 71, they will all come in as a torrent.
@@wellbuiltwealth might be wise to retire from ft work to pt and start a rrsp meltdown. Hate paying that $100/150 fee
The other thing ton consider is that the estate value of, say $500K at 90, is calculated in today's dollars. That $500K, when you are 90 years old, will have a real value of maybe half or less of that due to the 3% inflation every year. Also, the tax brackets will have moved with the passage of time. I am all for paying less tax in today's world, and trying to at least not let my RRIF grow. Take any excess and after paying myself, put it into my TFSA and then non-registered account. The RRIF will naturally melt down through time as inflation takes its toll.
One big hole in your retirement scenarios is the cost of end of life care. If one has any sort of wealth, you won't be in a gov't facility but instead dropping 8-10k per month per person for private care.
@@AlexHaan-j2j only a vary small number of old people actually end up in a LTC facility and then on average it's not for years but for months so overall costs aren't as great as one might expect. Although it could definitely happen and it would definitely suck when or if it does happen.
If one of the couple has much higher income and subsequent CPP than the other, should they aim for equal RRSP values at retirement or should the RRSP of the spouse with lower income/CPP be higher?
Well, that depends a lot on when you retire due to income splitting rules that kick in at age 65 for RRIFs. But that’s another video for another time…
@@wellbuiltwealth Fair point. This would be for retirement before 65 - say at 60. Lower CPP spouse is a couple of years younger. Thanks for all these videos, they really help!
@@kevinryan024you’re welcome! And yes, you wanna make sure there’s RRSPs in the lower income spouses hands so that you can manually income split. This is where a Spousal RRSP can come in handy.
How does income splitting work with large age gaps between partners … don’t both have to be over 65 ?
You can always convert some of RRSP( from large RRSP account) to an annuity with survival benefit, it qualify for income splitting at any age just like DB pension.
I haven't watched yet but my RRSP is too big and needs to be melted. I'm starting soon at age 62. A lot of my plans seem to cause OAS clawback in the first few years after 65. How to reduce?
Your marginal tax rate will probably be at 43%. If you collect OAS with clawback, you add the equivalent of another 15%, making it around 58%. You could consider melting a bit more RRSP/RRIF and delay your CPP and OAS by a few years. As long as you look at your marginal tax rate, get as much as you can out before collecting OAS. Then, use TFSAs, they will not impact the clawback.
I was playing a bit more this morning and got my clawback to under 50 a month from 65 to 70 years old. Still a bit more tweaking to do.
@@rokustittsville2422maybe delay CPP for 1-2 years?
@@freedomlife3623yep, already at 70
I would much rather have my TFSA (Canada) maxed and then focus on my RRSP’s….. or do both if you can afford it.
If the monthly ability the same for all strategies at 7.15k each month, who cares about the tax paid as long as the legacy amount is the largest? If I am getting 7.15k each month and leave with $1m, whether the tax paid is $1m or $1 is not relevant to me, right? I should be focus on what I am getting instead of what I am NOT getting
Well done, thanks for making this video. Having a huge RRSP is a nice “problem” to have and probably wouldn’t be the case for many Canadians.
I have a question regarding life insurance for the purpose of leaving a tax free wealth to our children. Have you done a video on this subject? If not, would you consider doing one? Thanks
Thank you! And no I haven’t made a video on this topic. But I’ll add it to the queue :)
10/10 Rhys!
🤓
Don’t want to pay too much tax on your RRSP/RRIP withdraw, properly retirement income planning. It Magoo both have large DB pensions, why do they contribute so much to their RRSP? Better question yet, why do they wait till 65 to retire?
Neither of them have DB pensions.
After watching this, I'm kind of feeling like the RRIF rollover may actually be for CRA's benefit.
can I buy your software?