izzy wrote:
Bear in mind that there is NO minimum age for setting up an RRIF and there is No witholding on the minimum required withdrawal amount (which ,admittedly may be small at your age).
Waiting until age 65 allows you to split income but that is irrelevant if you're taking money out before that age anyway!
My wife (age 54) set up her RRIF 3 years ago. Her MTR is zero. She withdraws annually the minimum amount (which, BTW, happens to be US dividends). The funds are used either for current spending needs, RESP contributions, Spousal RRSP contributions (of which she is the beneficiary) or TFSA contributions. In reality, her withdrawal gets mixed up with a whole lot of other income (RESP withdrawals, Dividends, and a small family allowance) which is spread between the two of us. We consider whatever she gives to me (which I use for registered account contributions) as a reimbursement of a portion of her share of household expenses. (I pay upfront 100% of these expenses and she reimburses me about 20%).
What must not be forgotten is that there are two advantages to an RRSP the first in importance (presuming a sufficiently long period of time) is
tax-free compounded growth. The second and generally lesser advantage is
the MTR difference between the time of contribution and the time of withdrawal. Though we tend to lay a lot of emphasis on the second advantage, CRA knows that on average this MTR difference is far less than we think. Therefore, when you withdraw from a RRSP/RRIF, it is key that we understand that
generally, we are foregoing any future tax-free growth. This is a moot point if the withdrawal is for ongoing expenses (i.e. the funds are
needed). The exception is where you are able to transfer these funds to a tax free environment: #1 another RRSP (strictly speaking, this is tax-deferral unless MTR at withdrawal is zero), #2 a TFSA, #3 a RESP and not to be neglected #4 a non-registered account if (and only if) your current MTR is zero (All of these apply in my wife's case).
"The term is over: the holidays have begun. The dream is ended: this is the morning."-C.S.Lewis, The Last Battle