How to manage RRIF withdrawals tax-efficiently to avoid ‘a hefty penalty’

Globe & Mail
February 13, 2023.

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RRSP has been converted into a registered retirement income fund (RRIF), at which point a specific percentage must be withdrawn every year.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.

Andrew Feindel, portfolio manager and investment advisor with Richie Feindel Wealth Management at Richardson Wealth Ltd. in Toronto, recently started advising a physician in his late 60s. This client was still working but had started to reduce his hours. Nevertheless, Mr. Feindel advised he incorporate his medical practice, retain his earnings as a doctor within it, and draw income to pay his living expenses from his RRSP (later converted into a RRIF).

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