How do I make a withdrawal from my RRIF and avoid a hefty tax penalty?

Walton Financial Group can help you understand how to make strategic RRIF withdrawals to minimize tax penalties!

Arrange a meeting with a financial advisor at Walton Financial Group in Barrie, Ontario

What goes into a registered retirement savings plan (RRSP) must eventually come out and be taxed as income. Often, that happens after the RRSP has been converted into a registered retirement income fund (RRIF), at which point a specific percentage must be withdrawn every year.

Still, advisors employ many strategies to reduce taxes on RRIF withdrawals at or above the minimum – something that may be especially important as retired clients seek more income to meet higher costs driven by inflation.

It is important if planning to withdraw from RRIF’s to pay attention to OAS clawbacks. The OAS threshold in 2023 is set at $86,912, meaning your OAS will be reduced in 2023 if your taxable income is above this amount [by] 15 cents on the dollar.

The most important thing to do when considering RRIF withdrawals is to have a close relationship with a financial advisor who understands all your sources of income and your total wealth picture so that the withdrawals can be made in the most tax efficient manner as possible.

Contact the Walton Financial Group in Barrie, Ontario today to arrange a meeting with a financial advisor to discuss ways to strategize RRIF withdrawals with a minimum tax penalty.

Planning for RRIF withdrawals should start the moment clients start contributing to their RRSPs. Throughout those wealth accumulation years, it’s critical to consider when and how much it makes sense to contribute with an eye toward future withdrawals.

The advisors at Walton Financial Group will assist you in how to take advantage of elements such as income splitting, the pension tax credit and OAS clawback thresholds, working in partnership with tax professionals.