RRIF withdrawals Pre Covid-19 no tax withhold amount vs new minus 25% minimum | Page 4 | RRSPs and RRIFs | Discussion forum

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RRIF withdrawals Pre Covid-19 no tax withhold amount vs new minus 25% minimum
August 21, 2020
10:27 am
Bill
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I find the gov't announcements are usually clearer than the articles from the "experts" weighing in. For example your article asserts "If he hasn’t yet acted, he can choose a minimum payment amount of either $5,400 or $4,050 but can’t choose anything in between...." and indicates it's an "election". Not really, and no election, it's just that the minimum required withdrawal is now $4,050 and you can always choose to take out, say, $4,500, if you feel like it (assuming you make the required arrangements with your FI).

August 21, 2020
3:25 pm
Loonie
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So, what I am hearing is that it's up to the individual FI to decide on their default, and up to the customer to adjust it if they want.

While this may be true, it doesn't make good sense to me. If it's up to the FI, there will be a lot of unhappy customers no matter which method they decide on. And that's not good for business.

August 21, 2020
8:31 pm
AltaRed
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The default should be the old minimum unless the retiree proactively requests the lower amount. RBC Direct Investing didn't reduce spouse's amount in June and that is just the way she wanted.

This 25% reduction thingy is just a vote ploy. Most people already had their plans set.

August 21, 2020
8:48 pm
Kidd
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Even if there's no tax withheld at the time of the rrif withdrawal, the tax will still be collected (owing) at tax time, would it not?

OR are you saying rrif withdrawals are becoming tax free?

August 21, 2020
8:53 pm
GICinvestor
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AltaRed said
The default should be the old minimum unless the retiree proactively requests the lower amount. RBC Direct Investing didn't reduce spouse's amount in June and that is just the way she wanted.

This 25% reduction thingy is just a vote ploy. Most people already had their plans set.  

Right!!! And an insult too, to think Trudeau was helping retirees.

August 21, 2020
8:55 pm
GICinvestor
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Kidd said
Even if there's no tax withheld at the time of the rrif withdrawal, the tax will still be collected (owing) at tax time, would it not?

OR are you saying rrif withdrawals are becoming tax free?  

Now that would be a vote getter!!!! You are correct.....no tax withheld on the mandatory amount.......tax is withheld for any RRIF withdrawal that is over the mandatory amount.....and no matter how you dice it or slice it.....it is all reported as taxable income.

August 22, 2020
6:21 am
Bill
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While it's true that a few complain about everything I'm pretty confident you'll hear no hue and cry about this elsewhere. It's nothing, in fact many will be happy about the reduced minimum option, and I'm pretty sure pretty well everybody who wants clarification will just call their fi or access their online info re this to clear things up. How it'll go, pretty much.

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