Ten RRSP questions answered

How much should you have in your account?

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9 comments on “Ten RRSP questions answered

  1. Can children be a beneficiary
    To RRSP funds from their Parents? If your spouse has died?

    Reply

    • Anyone can be a beneficiary to your rrsp. When it is a spouse that is a beneficiary the rrsp can “rollover” to the spouse still tax deferred. Tax will be paid on withdrawals. With anyone else as a beneficiary, sounds like your situation, the rrsp will be taxable as it is considered fully withdrawn. If the rrsp is transferred to a disabled dependant it may also transfer tax deferred, I would have to check on that one though to be sure.

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      • To be clear these situations all arise only on the death of the rrsp holder

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  2. All and all (RRSP) the word that is used all the time is DEFERED TAX you will pay tax on rrsp’s regardless, most people are in the bottom RELEM and cant put away 500,000.00 by retirement. And pay around %38, RRSP tax contribution’s .IN my opinion rrsps are one of the government’s biggest scams ever its geared to retirement the more people spend the better the economy is. Rrsp come out in 1958 has no one figured out yet TAX TAX TAX even on retirement money. Wake up figure out the math people, people are buying TFSA more now by stats Canada the rich over bought them when they were 10000.00 a year and why.
    Don’t tell me I am wrong when I see retired people working into there 70’s supplementing there income, to keep there heads above water working retirement check to retirement check.
    its very obvious no one can see the forest for the trees maybe I will run for a government job 2 terms full pension. benefits etc then double dip.
    Chow

    Reply

    • Thanks for participating, Jeffery.

      Reply

    • You receive a tax break in whatever tax bracket you are in when you contribute, and yes you pay tax at the bracket you are in when you take it out. If you make nothing on your investments, then it’s a wash. Most people didn’t just contribute $500,000 for their retirement as you state. They invested their allowable contributions and made money on their investments. I received tax breaks for my RRSP contributions and I used the refunds that I got along with what I had saved to re-invest in the next year’s plan and I struggled like most people working in a “normal” type job with budgeting these contributions on my salary at that time.
      I also opened a self directed trading account and chose my investments. For example, I contributed $3000 one year way back when and invested the money in 100 shares of Trans Canada Pipelines at $10 a share. Now its worth $60 a share — 6X what I paid for it plus dividends over the years. Same for my bank stocks, TD Bank alone has split three times since my original RSP contribution and purchase. The stock prices go up and down and almost all my stock pay quarterly dividends. You leave the stock and the dividends in your RRSP to grow. The money I made on my investments represents additional money I never would have been able to save for my retirement on my own., So … if my original total personal contributions totalled $100K over a period of 30 years (at a contribution of $3,333 per year) turned into $600K by 2017 because of my investments, I have no problem paying the tax required when I take it out.

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  3. I have made RRSP contributions but I have not made enough money to be able to use them for the tax deduction. What can I do? Anything? Thanks

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  4. Should I want to transfer in kind investments to RRSP, would it be advantageous to move the investments from a Non Registered or TFSA account? The NR is moving money from a taxable to the tax deferred environment and capital gains are taxable but capital losses are disallowed. TFSA is moving money from a tax-free to a tax deferred environment without the impact of capital gains/losses What would be the factor/s to consider to choose one over the other?

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  5. In 2017 I will only have a partial year of pension adjustment (PA). However, my max contribution for 2017 as per my assessment will reflect full PA in 2016. Is there a way to determine an adjusted max contribution for 2017 as a result of this PA change or, must I wait until 2018 to take advantage of the increased RSP contribution amount that will be allowable? I would like to shelter a greater amount of income in the 2017 year as my income in 2018 will be substantially lower.

    Reply

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