How to Withdraw From Your RRSP When Retired
- 1). Contact your RRSP administrator to discuss your options. Banks and brokerage firms are common RRSP administrators; follow the contact information provided on your RRSP statement. Request a withdrawal form.
- 2). Sign and submit the form, indicating the amount you want to take out of the RRSP account. Remember that all funds withdrawn are added to your annual income and taxed as ordinary income.
- 3). Take money out of an RRSP only when you need it, preferably in times of low income where your tax rate is down. This reduces the overall tax rate.
- 4). Convert the account into a retirement income option such as an annuity or Registered Retirement Income Fund. You are required to do this by the end of the year you turn age 71. Your RRSP administrator has paperwork to convert; the only difference between an RRSP and RRIF is you are unable to contribute to an RRIF and must take minimum distributions.
- 5). Take advantage of the Pension Income Tax Credit and Pension Income Splitting Provision by starting a RRSP to RRIF conversion at age 65. These tax credits can be carried forward if not required in the year received. Splitting allows you to benefit from a spouse's lower tax bracket with half of your taxable distribution taxed at the lower rate.
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