Take Advantage of the New Tax Break Being Offered by the Government
The Liberal Government has approved reducing the minimum withdrawal rate for registered retirement income funds (RRIFs) and life income funds (LIFs) by 25% for 2020.
This is a one-time opportunity and won’t likely be available after 2020.
What does it mean to you?
- Immediate Tax Savings for 2020… due to reduced RRIF/LIF income.
- Enhanced Tax Deferral… delaying the income paid from your RRIF/LIF today, will be paid out tomorrow, but in smaller amounts over time.
Can you take advantage of this opportunity?
If you can answer YES to one of the following questions, you should consider taking advantage of this opportunity by reducing your withdrawals.
- Can you get by without the full amount from your monthly RRIF/LIF payment?
- Do you have excess cash in your bank account?
- Can you manage with a reduced one-time lump sum RRIF/LIF payment for 2020?
How do you implement the reduction?
- MONTHLY… if you receive payments on a monthly or regular basis, we can adjust your remaining payments to ensure you only receive the reduced 2020 minimum annual withdrawal amount by year-end.
- LUMP SUM…If your annual payment HAS NOT been withdrawn, you can continue to defer it until later in 2020 with the reduced payment made on the prescribed or agreed upon date.
- If your annual payment HAS been withdrawn, it remains to be seen whether the government will permit you to re-contribute all or a portion of the excess withdrawals into your RRIF, as was permitted in 2015 when the RRIF minimums were last revised.
What do you do now?
If you would like to implement the 25% minimum withdrawal rate reduction for 2020, please contact us.