12:05 Great advice, so far you are the only person that takes into consideration a person's health from all the videos i have seen on UA-cam. My husband has been fighting cancer, still we were told to wait longer to start withdrawing his RRSPS and LIRA. Just madness. Thank you
Great content! Thank you so much. I have a question about RRSP meltdown. It seems to me that this strategy has the effect of paying more in taxes each year until death, where not melting down has the impact of less taxes each year, then a large tax bill on your estate. So you are up-fronting your tax bill if you use the meltdown strategy. Is this strategy optimized on a net-present value of taxes paid, or just the sum total of tax dollars paid? There would be many cases where it would be a better financial decision to chose to make the large payment at end-of-life as opposed to paying smaller amounts each year leading up to death, if on a present value basis it net saved me money. Thanks again!
You should be able to leave your money in your RRSP as long as you live and withdraw money at the rate you see fit instead of having the withdrawals mandated whether you need the money that year or not. That is areal self directed RRSP.That sounds reasonable to me.
Perhaps, but when the money comes out, it does need to get taxed, so we can debate about mandated timing and percentage of withdrawal, but I find for most retirees it's actually better, from a taxation perspective, to remove funds from the RSP at a higher rate than the mandated withdrawal schedule. A retiree runs the risk of negatively impacting their estate by leaving too much in their RSPs. That's what happened to my parents with their IG advisor recommending the minimum withdrawal - there was, in my opinion, a dereliction of duty when it came to the massive tax bill that was due in taxes to the estate. It could have been better with a more appropriate withdrawal strategy.
@@James_48 Although for some people withdrawing at a lower than mandated rate in some years makes sense and you can always withdraw money at a higher rate anyway.
I always get a kick out of these types of videos. X has $750 k in RRSP and Y has $500 k. 1.25 million and then they say they have an income of 60 k each.. no one with an income of 60 saves 750k. If they saved 10,000 per year it would take 75 years to save that much..yeah I know the thing earns interest and compounds.. my point is its not realistic but it does make a point
This is certainly possible with compounding interest. Saving $800/mth (=10,000/yr) for 30 years at an annualized interest rate of 6% for 30 years comes to $808,430. Some say proper investments will average 8% and that would bring the total to about $1.2 million.
@@Easyriderjohn I was about to say the exact same thing. This in fact, is quite a reasonable situation given that, to get an RSP of 750k, one would need to save only $550 / month (I used 32 years, 7%). For an RSP of 500k, one would only need to save about $365 monthly (again- 32 years, 7%).
@James_48 lol..only $550 / month for 32 years. I've got a Defined Benefit and in6 years I've collected $420,000 . My RRSP took a dump in 2008 and during covid. Only now has it come back up.. good luck on getting 7% for 32 years
12:05 Great advice, so far you are the only person that takes into consideration a person's health from all the videos i have seen on UA-cam.
My husband has been fighting cancer, still we were told to wait longer to start withdrawing his RRSPS and LIRA.
Just madness.
Thank you
Great content! Thank you so much. I have a question about RRSP meltdown. It seems to me that this strategy has the effect of paying more in taxes each year until death, where not melting down has the impact of less taxes each year, then a large tax bill on your estate. So you are up-fronting your tax bill if you use the meltdown strategy. Is this strategy optimized on a net-present value of taxes paid, or just the sum total of tax dollars paid? There would be many cases where it would be a better financial decision to chose to make the large payment at end-of-life as opposed to paying smaller amounts each year leading up to death, if on a present value basis it net saved me money. Thanks again!
Simple & well done, thanks!
Great advice Joe, following closely, Cheers
How do Pension credit and DTC transferred from spouse affect tax brackets?
I’d like your videos more if the money being counted out in the little cutaways was Canadian, not US.
You should be able to leave your money in your RRSP as long as you live and withdraw money at the rate you see fit instead of having the withdrawals mandated whether you need the money that year or not. That is areal self directed RRSP.That sounds reasonable to me.
Then contact the finance minister and any potential future finance ministers in other parties and suggest that to them.
Perhaps, but when the money comes out, it does need to get taxed, so we can debate about mandated timing and percentage of withdrawal, but I find for most retirees it's actually better, from a taxation perspective, to remove funds from the RSP at a higher rate than the mandated withdrawal schedule.
A retiree runs the risk of negatively impacting their estate by leaving too much in their RSPs. That's what happened to my parents with their IG advisor recommending the minimum withdrawal - there was, in my opinion, a dereliction of duty when it came to the massive tax bill that was due in taxes to the estate. It could have been better with a more appropriate withdrawal strategy.
@@James_48 Although for some people withdrawing at a lower than mandated rate in some years makes sense and you can always withdraw money at a higher rate anyway.
I always get a kick out of these types of videos. X has $750 k in RRSP and Y has $500 k. 1.25 million and then they say they have an income of 60 k each.. no one with an income of 60 saves 750k. If they saved 10,000 per year it would take 75 years to save that much..yeah I know the thing earns interest and compounds.. my point is its not realistic but it does make a point
This is certainly possible with compounding interest. Saving $800/mth (=10,000/yr) for 30 years at an annualized interest rate of 6% for 30 years comes to $808,430. Some say proper investments will average 8% and that would bring the total to about $1.2 million.
@@Easyriderjohn I was about to say the exact same thing. This in fact, is quite a reasonable situation given that, to get an RSP of 750k, one would need to save only $550 / month (I used 32 years, 7%).
For an RSP of 500k, one would only need to save about $365 monthly (again- 32 years, 7%).
@Easyriderjohn I earned in the liw to $120's k per year. I never put 10 k away each year. And during covid my portfolio took a dump
@James_48 lol..only $550 / month for 32 years. I've got a Defined Benefit and in6 years I've collected $420,000 . My RRSP took a dump in 2008 and during covid. Only now has it come back up.. good luck on getting 7% for 32 years
@@James_48 Please source the 7% investments that you have that lasted at that rate for 32 years.