@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.
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.
Thank you! As a boomer I fell into the RRSP trap. No real TFSA. No reliable financial advisor until now. Meltdown is underway. This video confirms everything I am being told. This video makes sense of such a complex topic. Thank you!
I’m 5 years out of retirement and my advisor states part of my riff will be used to fund my tfsa maxing it out every year into retirement. Seems odd but I now see the benefits
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!
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 🙏🙏🙏
What a fantastic video. I’m going through this next year. Met with the bank last month and they were flashing this stuff up on the screen, I think the software was Conquest. But what they failed to explain, you did wonderfully. Although what they showed was 150% for the retirement, they failed to explain any of the options or the retirement vs estate tax. Huge thank you. Subbed to your channel.
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.
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!
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
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.
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!
Gains in an RRSP are fully taxed as income upon withdrawal, while gains in a non-registered account are taxed more favorably as capital gains (50% taxable) or eligible dividends (with tax credits), making non-registered accounts potentially better for tax efficiency depending on your income bracket and investment strategy.
Do everything you can to max out your TFSA and put it in an index fund. Keep maxing it out until you’re ready to retire. You’ll be buying your freedom.
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?
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 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 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!
I am RRSP heavy…so this was really helpful. Wish my BMO Nesbitt Burns financial advisor was a little more taxation focused so I could use one resource rather than two 😊
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.
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!
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.
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.
Great content Thanks! i always expected to have a higher revenue in my retirement than i have now, and with the social costs going up, we expect the tax rate will increase as well, for us the conservative bet was the TFSA, which we both finally maxed out this year age 33. your explanation supports our thought process, Thank you!
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.
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.
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?
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?
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!
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😊
Planning is the key..then execute...you never know how much time you have...all very good points! I retired early...as if my rrsp was already converted to a rif when I was 49...working and paying high taxes t the g ovt never made sense to me...I have 1 million in rrsp, half in dividend funds...and taking about 25k a year from those. I also have income from a cpp survivors benefit my wife had passed 12 years ago. I have used that to support my daughter in university and to save for her future. My house is paid off.. we had dual life insurance...I guess we were snart that way, insurance outside the bank which covered the house and had some left over for funeral expenses. I still don't think I am taking enough out of the rrsp..each year...and am gradually taking more..even to transfer some into my tfsa each year it is less money the govt will get later!
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….
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.
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.
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.
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?
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!
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?
There aren’t many financial instruments that would be tax deductible. So to say don’t max out your RRSP would be ironeous advice since otherwise government will take it from you in form of federal and provincial tax. No matter where you invest it would be taxable except TFSA but TFSA contribution room has a limit so if you are a top earner you will reach that limit in a couple of years.
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)..
Great video as almost all are on this channel. Rhys is always concise. This really is a first world problem, a victim of one’s own success. Never mind the tax shelter that is enjoyed when building that RRSP.
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…
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 do have 7 figures in my RRSP but I'm also hoping to retire fairly early and it's going to be the bulk of my retirement income, even more so before I get CPP and OAS. TFSA is also maxed out. Taxes are just a fact of life, sadly. Hopefully I live long enough to draw down most of it. It shouldn't be enough to clawback OAS, assuming the caps go up with inflation.
What are the rules of RRIF besides minimums and max withdrawals? Any other specifics? I can put money into a RRIF in 3 years. I can put half’s worth of my pension RRSP into it, but should I? I have a financial advisor, but I don’t have my financial plan completed yet.
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?
I invested into and RRSP which has grown quite a bit. The lesson from that ... don't do it. Maximize your TFSA and invest outside the RRSP. Most of the gains in RRSP are either capital gains or dividends which are taxed favourably. Realize your gains outside the RRSP and in the end the money is all yours. I think RRSPs should be taxed at a maximum rate that is favourable ... say 30% .. to reward those who planned and saved. Also RRSP withdrawal should not affect OAS clawbacks.
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.
The best way not one financial planner talks about is to borrow 300 k in an interest only loan. Invest this money in the S&P 500 and write off the interest payments. This will reduce your taxable income by 21k + the basic personal tax credit and you have reduced your income by almost 40k. The 21 k in interest payments turns out to be only 10 k after taxes but the S&P goes up on average 10% a year which means 30K a year gain that is compounding.
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
What are the rules of RRIF besides minimums and max withdrawals? Any other specifics? I can put money into a RRIF in 3 years. Also, would $500, 000.00 be a sensible amount for a married couple, non travellers, with no debt who want to retire at 55 and 60?
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.
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.
My doughter is building a new build house in bc Canada. The land was purchased in summer 2024, will she have to pay any tax if she sell in spring 2025 P. S. She doesn’t have any other real estate
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.
At age 59 I have started withdrawing annual amounts from my and my spouse’s RRSP to such an extent that I am within the minimum tax bracket for both of us. This is to reduce the RRSP balance at age 71 so that the minimum withdrawal rate through to age 90 does not either push us into the next tax bracket nor cause a clawback on OAS. I am waiting till 67 to start CCP and OAS. I am continuing to invest the maximum into both our TFSA’s such that they will represent the brunt of our estate at death an be tax free.
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.
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… 😬
My biggest takeaway from this.. Max out your TFSA
TFSA room is very very precious.
Max both TFSA and RRSP.
I like the strategy of depositing to rrsp and using the refund to fuel you tfsa.
This is a masterpiece. Multiple topics built up in a single session. I wish there was an emoji to love this video, not just liking it. Thank you!
Wow, thank you!
Thank you! As a boomer I fell into the RRSP trap. No real TFSA. No reliable financial advisor until now. Meltdown is underway. This video confirms everything I am being told. This video makes sense of such a complex topic. Thank you!
I’m 5 years out of retirement and my advisor states part of my riff will be used to fund my tfsa maxing it out every year into retirement. Seems odd but I now see the benefits
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 🤓
Great video. One of the best I’ve seen in a while. Does a great job of the big picture.
Thank you very much!
This video is so well done! Rhys’ sense of humour makes an essentially dry topic quite enjoyable.
🤓😊
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 🙏🙏🙏
What a fantastic video. I’m going through this next year. Met with the bank last month and they were flashing this stuff up on the screen, I think the software was Conquest. But what they failed to explain, you did wonderfully. Although what they showed was 150% for the retirement, they failed to explain any of the options or the retirement vs estate tax. Huge thank you. Subbed to your channel.
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!
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…
Great video! Reinforces the need to be strategic about scenarios and melting down.
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.
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!
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
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 🤓
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!
Gains in an RRSP are fully taxed as income upon withdrawal, while gains in a non-registered account are taxed more favorably as capital gains (50% taxable) or eligible dividends (with tax credits), making non-registered accounts potentially better for tax efficiency depending on your income bracket and investment strategy.
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?
Do everything you can to max out your TFSA and put it in an index fund. Keep maxing it out until you’re ready to retire. You’ll be buying your freedom.
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?
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 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 🤓
Impressive video. You are the exact type of creator that RUclips needs more of.
Wow, thank you! 😊
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!
I am RRSP heavy…so this was really helpful. Wish my BMO Nesbitt Burns financial advisor was a little more taxation focused so I could use one resource rather than two 😊
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.
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!
Excellent video, as always. I always check your channel first for new videos 🙂
Thank you!!
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!!
Another incredibly informative and easy to comprehend video. Thanks for sharing your knowledge Rhys!
Thank you!
I made my husband watch your video and he was impressed by your presentation.
Another great video. Thanks Rhys. Always good advice.
Fantastic, thanks for explaining and simplifying a huge win for anyone wiling to listen.
Thank you! And I know… 28 mins is brutal 😬
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.
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.
Great content Thanks! i always expected to have a higher revenue in my retirement than i have now, and with the social costs going up, we expect the tax rate will increase as well, for us the conservative bet was the TFSA, which we both finally maxed out this year age 33. your explanation supports our thought process, Thank you!
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!!
Wow, that is a lot to think about. Thanks for laying out the options in such an easy to understand manner.
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.
Store lower growth things like bonds in your RRSP and use your TFSA to put growth assets into.
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?
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?
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!
Agree excellent video and well spoken
whew! luckily I will not have this problem! but you explained it very simply and well, so I will subscribe!
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😊
Thanks for this. It really helps to visualize the numbers. Much appreciated
Another great video. Thanks very much for such clear and logical scernarios.
Excellent detailed analysis 👍
Thank you kindly!
Planning is the key..then execute...you never know how much time you have...all very good points! I retired early...as if my rrsp was already converted to a rif when I was 49...working and paying high taxes t the g ovt never made sense to me...I have 1 million in rrsp, half in dividend funds...and taking about 25k a year from those. I also have income from a cpp survivors benefit my wife had passed 12 years ago. I have used that to support my daughter in university and to save for her future. My house is paid off.. we had dual life insurance...I guess we were snart that way, insurance outside the bank which covered the house and had some left over for funeral expenses. I still don't think I am taking enough out of the rrsp..each year...and am gradually taking more..even to transfer some into my tfsa each year it is less money the govt will get later!
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….
Really appreciate this video!! Thank you so so much for explaining this is a way the average person can understand.
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.
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 🤓
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!
Wow! Thank you for explaining this so clearly!
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.
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 :)
Really good video - I like the way explain it all. Subscribed. What software did you use and is there anyway the average person can get it?
Thanks! There’s a link to the software website in the description, but it’s only available via advisor firms that subscribe to it.
Very good sense and presented very clearly. Wondering if the average person can get a hold of these programs so we can run our own models???
Thank you. At this point the software is via advisors only.
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.
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?
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.
There aren’t many financial instruments that would be tax deductible.
So to say don’t max out your RRSP would be ironeous advice since otherwise government will take it from you in form of federal and provincial tax.
No matter where you invest it would be taxable except TFSA but TFSA contribution room has a limit so if you are a top earner you will reach that limit in a couple of years.
Eye opening!!! Things to think about.
Thanks, really loving your videos!
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.
What’s the name of the software tool that you used to compare various scenarios?
Great video by the way. Learnt a lot. Thanks.
Conquest
Awesome video….one of your best yet!!!!👍❤️🙏
Wow, thank you 🤓
Excellent content! Looking forward to seeing more. Keep up the great work.
Excellent video, I need to watch more!
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)..
Great video as almost all are on this channel. Rhys is always concise. This really is a first world problem, a victim of one’s own success. Never mind the tax shelter that is enjoyed when building that RRSP.
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…
OAS clawback is calculated on net income. Therefore is it correct to say annual donations to charity wont offset any OAS clawbacks?
That is a fantastic and clear explanation! Thank you!
You're very welcome!
BTW...I could listen to you all day!
🤓🙏
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.
Thank you for the video. It was really insightful!
I do have 7 figures in my RRSP but I'm also hoping to retire fairly early and it's going to be the bulk of my retirement income, even more so before I get CPP and OAS. TFSA is also maxed out. Taxes are just a fact of life, sadly. Hopefully I live long enough to draw down most of it. It shouldn't be enough to clawback OAS, assuming the caps go up with inflation.
Is there a way to calculate the tax implications of investing in a non-registered account vs an RRSP long term?
What are the rules of RRIF besides minimums and max withdrawals? Any other specifics? I can put money into a RRIF in 3 years. I can put half’s worth of my pension RRSP into it, but should I? I have a financial advisor, but I don’t have my financial plan completed yet.
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.
I invested into and RRSP which has grown quite a bit. The lesson from that ... don't do it. Maximize your TFSA and invest outside the RRSP. Most of the gains in RRSP are either capital gains or dividends which are taxed favourably. Realize your gains outside the RRSP and in the end the money is all yours. I think RRSPs should be taxed at a maximum rate that is favourable ... say 30% .. to reward those who planned and saved. Also RRSP withdrawal should not affect OAS clawbacks.
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.
The best way not one financial planner talks about is to borrow 300 k in an interest only loan. Invest this money in the S&P 500 and write off the interest payments. This will reduce your taxable income by 21k + the basic personal tax credit and you have reduced your income by almost 40k. The 21 k in interest payments turns out to be only 10 k after taxes but the S&P goes up on average 10% a year which means 30K a year gain that is compounding.
Nice video! Does the accounting assume the taxable brackets change at 3% over time?
The software does build inflation in across the board.
Wow. This is so informative. Thank you!
Thanks for the informative video, Reece!
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
What are the rules of RRIF besides minimums and max withdrawals? Any other specifics? I can put money into a RRIF in 3 years.
Also, would $500, 000.00 be a sensible amount for a married couple, non travellers, with no debt who want to retire at 55 and 60?
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.
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
Can you move your money to a Swiss account to avoid or move to another country?
My doughter is building a new build house in bc Canada. The land was purchased in summer 2024, will she have to pay any tax if she sell in spring 2025
P. S. She doesn’t have any other real estate
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.
At age 59 I have started withdrawing annual amounts from my and my spouse’s RRSP to such an extent that I am within the minimum tax bracket for both of us. This is to reduce the RRSP balance at age 71 so that the minimum withdrawal rate through to age 90 does not either push us into the next tax bracket nor cause a clawback on OAS. I am waiting till 67 to start CCP and OAS. I am continuing to invest the maximum into both our TFSA’s such that they will represent the brunt of our estate at death an be tax free.