Early RRIF withdrawals could leave your kids more

This article compares two brothers – named after a self-proclaimed penny-pinching comedian – who deploy two very different RRIF withdrawal strategies and explains the difference in their estate taxes.  In this example, that brother who withdrawals mandatory minimum RRIF payments faces a significant amount of taxation in his estate.  While some clients are disinterested in minimizing estate taxes, if you are interested, I would remind you that if you have a spouse, there may be even more reason to elect to withdraw more than the mandator minimum RRIF withdrawal to take advantage of pension income splitting.  In fact, I will often demonstrate that clients can save significant amounts of tax by initiating their RRIF withdrawals before age 72 – taking advantage of their post-retirement – pre-RRIF years between the ages of 65 and 72 where a large swath of the population experiences lower periods of taxation.

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