Thank you for this video. Like your RRSP withdrawal strategy. My dear sister passed away at 61. She had HOOPP worth $220K and RRSP $144K. Thank God she put a surviving benefit on both. However, the tax bill for her year of birth was $44K. I felt bad for her as she saved since early 20's and never got to use the money. So yes, use up the RRSP 1st for sure then TFSA near the end of life so it's non taxable. That's what we plan to do.
I've seen many of these retirement videos, only a few on the RRSP Meltdown. Thank-you! My question is.. in so many of these videos, the couple are hitting 90 years old, often with more money then they started with!?! Leaving money is an amazing gift, but when does the couple enter their "buy a Ferrari stage"? Serious question - Why are they living on $95k annually only to hit 90 w/$2M in the bank??? Feels like they should have retired at 55, instead of 62.
TFSA limits apply to deposits into the account only. There is no limit on how much money is in the account or how much interest/returns generated by the money in the TFSA.
As an lnvesting enthusiast, I often wonder how top level investors are able to become millionaires off investing. . I’ve been sitting on over $545K equity from a home sale and I’m not sure where to go from here, is it a good time to buy into stocks or do I wait for another opportunity?
A lot of folks downplay the role of advlsors until being burnt by their own emotions. I remember couple summers back, after my lengthy divorce, I needed a good boost to help my business stay afloat, hence I researched for licensed advisors and came across someone of utmost qualifications. She's helped grow my reserve notwithstanding inflation, from $275k to $850k.
This is definitely considerable! think you could suggest any professional/advisors i can get on the phone with? I'm in dire need of proper portfolio allocation.
My CFA NICOLE ANASTASIA PLUMLEE a renowned figure in her line of work. I recommend researching her credentials further... She has many years of experience and is a valuable resource for anyone looking to navigate the financial market.
I understand the benefits of the RRSP meltdown vs. RRIF minimum withdrawal but what about any benefits if you were pursuing a RRIF withdrawal rate well above the minimum (at say the aggressive rate that you show for the RRSP meltdown). What are the pros and cons of this?
Hi Aaron, excellant video as always. Keep driving the point home about leaving as little as possible in RRSP bucket and as much as possible in TFSA (as long as Govt. does not find way to tax that as well). I was wondering if there is any insurance safe heaven that can be leveraged by someone in late 50's (or early sixties) who does not have any coverage but is otherwise insurable. Would love to see more content with strategies marrying RRSP meltdown with Cash benefit Insurance. Thanks.
Hi Satinder, Thanks for your comment. There's no cash advantage in melting down an RRSP to purchase whole life. Both the RRSP and Life insurance shelter tax. The advantage would be a slight increase in your estate value. Using a non-registered account or another source of income would be a much better option to fund the whole life insurance.
I am a resident of USA with RRSP account in Canada. Are there different rules for withdrawal, and option of RRSP meltdown or RRIF. Do I have only option of RRSP melt down.
It would be great if you could do a video on RRSP meltdown for a retired 68 year-old single person with over one million dollars in a non-registered account, $600,000 in RRSP and a maxed out TFSA account. He is already receiving OAS and CPP and company pension payments. I guess there is no point in trying to melt down the RRSP since there will be OAS clawback? Thank you.
You should be able to leave your money in your rrsp and withdraw it as you see fit rather than mandated withdrawls whether you need money that yesr or not. That would be a real self directed retirement plan as opposed to what we have now.Maybe you could do a show about that Cheers.
Because the government does not believe you should have money. You are just holding money they haven't figured out how to tax off you as yet. They give you a tax break on RRSPs and then control you. We contributed to the C.P.P. since it started and for the first years, they used it as a slush fund. Now they make it look like they are giving you the money instead of returning your investment.
Great question Larry. There are two instances where this can happen. 1) They may have unused contribution room and 2) TFSA annual contribution limits increase $500 about every 3 years. It's expected the annual limit for 2025 will remain at $7,000 although expect 2026 to go up to $7500. With that in mind, you can see a time when each spouse will be eligible to deposit $10K annually or more as the years go by.
Just curious how Elizabeth's TFSA went from $475,000 at 80 years old, to $975,000 at 90 years old. She contributed ruffly $150,000, but her TFSA increased $500,000. Am I missing something?
Good eye. TFSA deposits in the earlier years were quite low and there were a few years of withdrawals. As Elizabeths cash flow increases she has available cash for higher TFSA deposits. Also the plan reflects increases to TFSA annual deposit amount.
Would converting rrsp to rrif first, then meltdown/withdraw rrif at higher than rrif minimum, achieve the same tax and saving effect as a rrsp meltdown? Withdrawals from rrif can be income split with spouse after age 65. Would this not be the benefit of converting to rrif first, before meltdown?
Great video and explanation. How do you go about figuring out the amount to withdraw from RRSP each year throughout retirement? As you said you want to maintain your effective tax rate as close as possible. Is this something your software does automatically or is it manually adjusted? If manually adjusted, any suggestions on how to calculate that value?
In this example, started with $15K unused room for one and $40K unused room for the other. Philip has 17 years of nearly zero deposits to her TFSA with 3 years of withdrawals. That's why the deposits are higher later in life when he has excess cash flow. Similar situation for Elizabeth.
@@AaronWealthManagement Just curious how Elizabeth's TFSA went from $475,000 at 80 years old, to $975,000 at 90 years old. She contributed ruffly $150,000, but her TFSA increased $500,000. Am I missing something?
Yes and they have unused room. In this example, started with $15K unused room for one and $40K unused room for the other. Philip has 17 years of nearly zero deposits to her TFSA with 3 years of withdrawals. That's why the deposits are higher later in life when he has excess cash flow. Similar situation for Elizabeth.
Hi. I'm 65 with a defined benefit government pension along with a smallish ($100k) RRSP. I actually still have a $40k RRSP deduction limit if I want to use it on my 2024 taxes. Question... Is it worth using this $40k, then moving my RRSP to a RRIF in 2025? Or forget about it and convert my $100k RRSP to a RRIF this year and starting minimum withdrawals in 2025? (PS.. I'm holding off taking CPP and OAS for 5 years). I realize you can't give specific answers... just a general comment about adding to my RRSP before changing to RRIF would be greatly appreciated. Thanks!
How do you melt down RRSP.? What do you mean by that? And how much to take out? In age 71 you HAVE to move money to Rrif...not clear video. Very confusing...😢
@@olgaovtsyn2129 thanks for your question Olga. There are several videos on this subject. Meltdown is a fancy word for making withdrawals so that your RRSP/RRIF is at a zero balance before you pass
You should be able to keep your money in your rrsp until you die and withdraw what you want when you want instead of being told what to withdraw by the govt via a rif.That seems fair to me.The govt gets to tax what is left at the max marginal rate when you die anyway.
actually it not all you money. the Gov gave you the tax refund amount on the money you put in your RRSP SO really that tax amount was credited to you RRSP and is now in the RRSP, it is government money your investing in your name, they want it back. The idea is you are in a higher tax bracket in working years and a lower tax bracket when you retire. So you come out ahead, Doesn't do much if you were 30% tax bracket when workrking and in the same tax bracket or higher when retired..like said here take the money out and move it to a TFSA tax free account
Hi. Can you address Spousal RRSP/RRIF? My wife and I have personal RRSPs and Spousal RRSPs. Would my wife be the annuitant of my Spousal RRSP (i.e., make withdrawals from my Spousal RRSP) and I am the annuitant of her Spousal RRSP? Tehn when I convert my RRSPs to RRIFs, do I convert my Spousal RRSP to a Spousal RRIF? Since I am not the annuitant of my Spousal RRSP, then I would not be able to draw from my new Spousal RRIF? Should my wife convert her Spousal RRSP and roll the savings to my new personal RRIF? Thank you for your insight.
Its all relative. Let's say your family pre-retirement income was $500K. They're lifestyle is likely very different compared to a family income of $150K. You would also expect they're retirement choices are very different given the retirement assets available. $130K pre-tax is about $95K after-tax. Here's a link to a plan where they only spend $45K after-tax but are snowbirds and spend an additional $35K. ruclips.net/video/dCrkd6YEaNA/видео.htmlsi=nOIqZLc0GXN7xPtQ
Thank you for this video. Like your RRSP withdrawal strategy. My dear sister passed away at 61. She had HOOPP worth $220K and RRSP $144K. Thank God she put a surviving benefit on both. However, the tax bill for her year of birth was $44K. I felt bad for her as she saved since early 20's and never got to use the money. So yes, use up the RRSP 1st for sure then TFSA near the end of life so it's non taxable. That's what we plan to do.
After listening to your video I adjusted my RRSP -RRIF to have cleaned out by 85. Your numbers make a lot so sense.
Thx for confirming our strategy. I too have all our numbers on a spreadsheet projected to age 90. Same as you have described.
I've seen many of these retirement videos, only a few on the RRSP Meltdown. Thank-you!
My question is.. in so many of these videos, the couple are hitting 90 years old, often with more money then they started with!?! Leaving money is an amazing gift, but when does the couple enter their "buy a Ferrari stage"? Serious question - Why are they living on $95k annually only to hit 90 w/$2M in the bank??? Feels like they should have retired at 55, instead of 62.
Awesome video, thank you!
Great RRSP meltdown case study 📖 👍
More SINGLES examples appreciated! That’s most of us here. And most without a DB plan. 😊
RRSP is your enemy at retirement time. That's why I stopped working at 60 and started the RRSP's meltdown.
Incredible content. Thanks for sharing.
Extremely helpful advice ❤
Thanks for this video. We have no where that much - wish we did.
Me neither! 😊
What about TFSA limits? They both have 100k in their TFSAs already, aren’t they?
TFSA limits apply to deposits into the account only. There is no limit on how much money is in the account or how much interest/returns generated by the money in the TFSA.
Great video. Easy to follow
Thank you for this. I am recently widowed and would like to see some information dealing with singles.
As an lnvesting enthusiast, I often wonder how top level investors are able to become millionaires off investing. . I’ve been sitting on over $545K equity from a home sale and I’m not sure where to go from here, is it a good time to buy into stocks or do I wait for another opportunity?
A lot of folks downplay the role of advlsors until being burnt by their own emotions. I remember couple summers back, after my lengthy divorce, I needed a good boost to help my business stay afloat, hence I researched for licensed advisors and came across someone of utmost qualifications. She's helped grow my reserve notwithstanding inflation, from $275k to $850k.
This is definitely considerable! think you could suggest any professional/advisors i can get on the phone with? I'm in dire need of proper portfolio allocation.
My CFA NICOLE ANASTASIA PLUMLEE a renowned figure in her line of work. I recommend researching her credentials further... She has many years of experience and is a valuable resource for anyone looking to navigate the financial market.
Just ran an online search on her name and came across her websiite; pretty well educated. thank you for sharing.
2:12
Thank you❤ stragety
I understand the benefits of the RRSP meltdown vs. RRIF minimum withdrawal but what about any benefits if you were pursuing a RRIF withdrawal rate well above the minimum (at say the aggressive rate that you show for the RRSP meltdown). What are the pros and cons of this?
Hi Aaron, excellant video as always. Keep driving the point home about leaving as little as possible in RRSP bucket and as much as possible in TFSA (as long as Govt. does not find way to tax that as well). I was wondering if there is any insurance safe heaven that can be leveraged by someone in late 50's (or early sixties) who does not have any coverage but is otherwise insurable. Would love to see more content with strategies marrying RRSP meltdown with Cash benefit Insurance. Thanks.
Hi Satinder, Thanks for your comment. There's no cash advantage in melting down an RRSP to purchase whole life. Both the RRSP and Life insurance shelter tax. The advantage would be a slight increase in your estate value. Using a non-registered account or another source of income would be a much better option to fund the whole life insurance.
@@AaronWealthManagement Thanks for your insight and guidance. much appreciated.👍👍
I am a resident of USA with RRSP account in Canada. Are there different rules for withdrawal, and option of RRSP meltdown or RRIF. Do I have only option of RRSP melt down.
It would be great if you could do a video on RRSP meltdown for a retired 68 year-old single person with over one million dollars in a non-registered account, $600,000 in RRSP and a maxed out TFSA account. He is already receiving OAS and CPP and company pension payments. I guess there is no point in trying to melt down the RRSP since there will be OAS clawback? Thank you.
How's this example? ruclips.net/video/JwAUvi6iug0/видео.htmlsi=dsdFFrtKC0QQ1OH_
He’s ok regardless….let the gov have its pound of flesh
What province you’re using for income tax rate?
Your example show a very low income tax rate.
Ontario
You should be able to leave your money in your rrsp and withdraw it as you see fit rather than mandated withdrawls whether you need money that yesr or not. That would be a real self directed retirement plan as opposed to what we have now.Maybe you could do a show about that Cheers.
Because the government does not believe you should have money. You are just holding money they haven't figured out how to tax off you as yet. They give you a tax break on RRSPs and then control you. We contributed to the C.P.P. since it started and for the first years, they used it as a slush fund. Now they make it look like they are giving you the money instead of returning your investment.
how can they be consistently contributing 16K or more every year into TFSA when the max contribution is 7K/year?
Great question Larry. There are two instances where this can happen. 1) They may have unused contribution room and 2) TFSA annual contribution limits increase $500 about every 3 years. It's expected the annual limit for 2025 will remain at $7,000 although expect 2026 to go up to $7500. With that in mind, you can see a time when each spouse will be eligible to deposit $10K annually or more as the years go by.
Just curious how Elizabeth's TFSA went from $475,000 at 80 years old, to $975,000 at 90 years old. She contributed ruffly $150,000, but her TFSA increased $500,000. Am I missing something?
Good eye. TFSA deposits in the earlier years were quite low and there were a few years of withdrawals. As Elizabeths cash flow increases she has available cash for higher TFSA deposits. Also the plan reflects increases to TFSA annual deposit amount.
Would converting rrsp to rrif first, then meltdown/withdraw rrif at higher than rrif minimum, achieve the same tax and saving effect as a rrsp meltdown? Withdrawals from rrif can be income split with spouse after age 65. Would this not be the benefit of converting to rrif first, before meltdown?
It's about the same. RRIF first then meltdown results in $7K less tax over your lifetime and about the same estate value.
@@AaronWealthManagement A RRIF also has more favourable withholding tax rules too, if I'm not mistaken.
Great video and explanation. How do you go about figuring out the amount to withdraw from RRSP each year throughout retirement? As you said you want to maintain your effective tax rate as close as possible. Is this something your software does automatically or is it manually adjusted? If manually adjusted, any suggestions on how to calculate that value?
TFSA limits don't seem to exist in this example. The whole proposal therefore will not work!
In this example, started with $15K unused room for one and $40K unused room for the other. Philip has 17 years of nearly zero deposits to her TFSA with 3 years of withdrawals. That's why the deposits are higher later in life when he has excess cash flow. Similar situation for Elizabeth.
@@AaronWealthManagement Just curious how Elizabeth's TFSA went from $475,000 at 80 years old, to $975,000 at 90 years old. She contributed ruffly $150,000, but her TFSA increased $500,000. Am I missing something?
True it is only $96000 for 2024 I think.
15k to 28k yearly contributions into a TFSA because we're assuming the yearly contribution limit will increase by then?
Yes and they have unused room. In this example, started with $15K unused room for one and $40K unused room for the other. Philip has 17 years of nearly zero deposits to her TFSA with 3 years of withdrawals. That's why the deposits are higher later in life when he has excess cash flow. Similar situation for Elizabeth.
Thanks!
Hi. I'm 65 with a defined benefit government pension along with a smallish ($100k) RRSP. I actually still have a $40k RRSP deduction limit if I want to use it on my 2024 taxes. Question... Is it worth using this $40k, then moving my RRSP to a RRIF in 2025? Or forget about it and convert my $100k RRSP to a RRIF this year and starting minimum withdrawals in 2025? (PS.. I'm holding off taking CPP and OAS for 5 years). I realize you can't give specific answers... just a general comment about adding to my RRSP before changing to RRIF would be greatly appreciated. Thanks!
How do you melt down RRSP.? What do you mean by that? And how much to take out?
In age 71 you HAVE to move money to Rrif...not clear video. Very confusing...😢
@@olgaovtsyn2129 thanks for your question Olga. There are several videos on this subject. Meltdown is a fancy word for making withdrawals so that your RRSP/RRIF is at a zero balance before you pass
Hello, I am at a point where I may need some advice. Do you do consults for a fee? I manage my own finances and want to keep it that way. Thanks.
Yes, you can schedule a call using this link: calendly.com/aaronwealthmanagement/discovery
@@AaronWealthManagement thanks. Will do sometime in late Sept.
You should be able to keep your money in your rrsp until you die and withdraw what you want when you want instead of being told what to withdraw by the govt via a rif.That seems fair to me.The govt gets to tax what is left at the max marginal rate when you die anyway.
Which is 50% taxes on money left in a RIF.
@@richardwakefield8616 Yes but at least you have a margin of safety when you are very old.
actually it not all you money. the Gov gave you the tax refund amount on the money you put in your RRSP
SO really that tax amount was credited to you RRSP and is now in the RRSP, it is government money your investing in your name, they want it back. The idea is you are in a higher tax bracket in working years and a lower tax bracket when you retire. So you come out ahead, Doesn't do much if you were 30% tax bracket when workrking and in the same tax bracket or higher when retired..like said here take the money out and move it to a TFSA tax free account
@ You can take it out and eat it but you still have to pay tax on the withdrawal.
Hello, Is there a similar free program online that we can use to plug our numbers to make my own scenario? Thanks.
Not aware of any free programs other than CRA's retirement planning page
@@AaronWealthManagement There is a Retirement Planner template in Microsoft Excel
Hi. Can you address Spousal RRSP/RRIF? My wife and I have personal RRSPs and Spousal RRSPs. Would my wife be the annuitant of my Spousal RRSP (i.e., make withdrawals from my Spousal RRSP) and I am the annuitant of her Spousal RRSP? Tehn when I convert my RRSPs to RRIFs, do I convert my Spousal RRSP to a Spousal RRIF? Since I am not the annuitant of my Spousal RRSP, then I would not be able to draw from my new Spousal RRIF? Should my wife convert her Spousal RRSP and roll the savings to my new personal RRIF? Thank you for your insight.
Seems like many folks will never actually use the money in their TFSAs. Such an odd type of vehicle..there is no urgency to ever use that money.
Who spends $95000/ yr when retired? I’d rather see more realistic retirement plan
Its all relative. Let's say your family pre-retirement income was $500K. They're lifestyle is likely very different compared to a family income of $150K. You would also expect they're retirement choices are very different given the retirement assets available. $130K pre-tax is about $95K after-tax. Here's a link to a plan where they only spend $45K after-tax but are snowbirds and spend an additional $35K. ruclips.net/video/dCrkd6YEaNA/видео.htmlsi=nOIqZLc0GXN7xPtQ
@@AaronWealthManagement my point is that most of these are directed at those people only .
I know! I have just over $1,700. per month. This includes a full Guaranteed Income Supplement.
@@caperboy1169good. I need him to show me what it will look like for successful people like myself.
F Y I the average Canadian has 112 k in their Rrsp. Not 900000.
I'll prob have 3 mill
The average Canadian isn't at retirement age either...