gemma 119 Part 2 response (cont'd)
but have about $425,000 in RRSP’s and a bit more than this saved in non-registered savings. We have no debts at all and own our own home.
After you pull the plug this fall is there or will there be any income from non-employment sources that could affect the taxes you pay or indeed support you without drawing down the RRSP? I’m thinking savings, CPP, passive income, rental income etc
My question is if you don’t want to leverage any investments does it pay to withdraw the maximum from your RRSP or RRIF before taking from your regular savings after retirement and when is enough in the RRSP’s before making no more contributions. Thanks
1. I presume that you would already know how much per-month or year it is that you need
2. Do you know where that income will come from
3. You also know that any income from RRSP meltdown will have some tax taken off when you start to take it out
4. Is the RRSP’s invested smart, safe & securely in something like GIC’ at 4 -5 % return annually?
RRSP’s: Since you have $425,000 and assuming it is invested at 5%, the annual growth in the RSP’s will be $21,250. Is that enough for you to live on (in addition to drawing from savings or having other income) till you reach 65?
Since there is $21, 250 of income growth within the RRSP, it also supposes that you do not want to touch the capital value, then, you could take out the minimum in $5k lots as you need it.
If you need more than $21,250/year to live on and the RRSP’s is the only possible revenue source, then by taking out more than $21,250 the RRSP’s would start to slowly diminish. Only you can make the decision on how much to take out for your needs
As individuals & joint couple, you need to decide the lifestyle you want in retirement, the cost, how much & you will need. No advice from a forum can give you that – its way too personal
The tax issue is not that important, what is important is that you have saved and put away money, have a nest egg that includes real property & RRSP’s, you are debt free, have some savings, are 3-5 years from collecting OAS and any other benefits to support the income that you both will need