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The RRIF quandry
January 5, 2024
6:53 am
RetirEd
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Loonie: That's about what I plan to do. There are some undefined variables, though. GIS calculations are a bit obscure, and the BC rent subsidy for old folks (SAFER) hasn't had its thresholds updated since about 2018, and they may move. As one disgraced former US president is fond of saying, "We'll see."

RetirEd

January 5, 2024
10:30 am
Loonie
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Yes, GIS is bewildering. I looked at that for a relative and quickly gave up.
I suppose you could phone them some day when you are snowed in and have absolutely nothing better to do!

January 5, 2024
11:48 pm
Norman1
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RetirEd said
Loonie: I certainly wouldn't want to contribute any more to my RRSP! I'd get no tax benefit and the deposits would be taxable on withdrawal.

That can't be the case. If there would be no tax benefit in claiming the deduction for the RRSP contribution now, then one could wait and claim the deduction gradually later, to shield the RRIF withdrawals from taxation.

That is the "Using up your existing RRSP room" strategy described in The Navigator (Feb 2017): RRSP strategies at age 71:

Using up your existing RRSP room

If you have accumulated unused RRSP room and have not contributed to your RRSP, consider if it makes sense to use up your RRSP room by making a contribution in the year you turn 71. Remember, you do not have an additional 60 days after the end of the year to make a contribution, as you can no longer have an RRSP after December 31.

Generally, if you are going to be in a higher bracket in the year you turn 71 compared to a future year, you can realize a tax savings and deferral of tax by contributing and deducting that contribution.

Alternatively, you can make the contribution up to your limit and spread out the deduction over future years. You may decide to claim the deduction in a year(s) when your income is higher as a result of receiving RRIF, pension or annuity payments. This strategy can help lower your income and keep you under the OAS clawback threshold.

January 7, 2024
5:51 pm
RetirEd
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Norman1: You know, that may just be worth doing. The high interest rates may drive up my taxable income, though my unused contribution room is only a few hundred bucks. I'll have to wait for the T-slips. There should be plenty of time to decide once the data's all in. Thanks.

RetirEd

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