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Email this10:45 am
October 15, 2015
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I thought i read somewhere it's better to redeem your GICs at the end of the year when withdrawing from your RRIF. Is this correct or does the time matter? I was also debating buying the GIC in July and December. Not sure if i need twice a year though? Also I have a 5 year ladder. Is a three year ladder better? I haven't entered retirement age yet, just doing some planning. I'd have to rejig my GICs if it was better to buy at the beginning of the year.
11:05 am
April 6, 2013
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I would match the GIC maturities to one's need for the money.
There is a bit more tax-deferred interest in the RRIF if one withdraws the money from the RRIF near the end of the year than withdrawing earlier in the year and earning interest on the money in a non-registered account.
11:08 am
October 15, 2015
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Thanks, that's a good point. I wondered why the end of year was suggested.
5:06 pm
October 27, 2013
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christinad said
Thanks, that's a good point. I wondered why the end of year was suggested.
More tax deferment provided none of the withdrawal amount was not needed earlier in the year. Doesn't matter what type of asset, i.e. GIC, stock, bond, etc.
1:34 am
August 4, 2010
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christinad said
I thought i read somewhere it's better to redeem your GICs at the end of the year when withdrawing from your RRIF. Is this correct or does the time matter? I was also debating buying the GIC in July and December. Not sure if i need twice a year though? Also I have a 5 year ladder. Is a three year ladder better? I haven't entered retirement age yet, just doing some planning. I'd have to rejig my GICs if it was better to buy at the beginning of the year.
I was wandering around Oaken's site the other day, and I noticed that for RRIFs, they will extract your minimum payment requirement from the GIC(s) value without requiring they be cashed in or deregistered.
So you don't need loose cash, or timed GIC maturities. They do it in a customer-friendly fashion, starting with the lowest rate GIC, and shortest remaining duration as a tie-breaker. I'm (fortunately) not at RIF age yet myself, so I'm not sure how other institutions handle cases of non-liquid assets like GICs when it comes time to make the minimum payment.
