Financial Services: RRIF Account Strategies with LMBF

Navigating the world of finances leading up to retirement can be overwhelming for some individuals. The concern that you might outlive your retirement savings is a very real one for many Canadians, especially with no clear strategy of how to go about investments. Setting up an RRIF account is similar, in a sense, to an RRSP account, but there are many options to choose from. LMBF’s advisors are here to give you our tailored advice from a place of experience on how best to contribute to an RRIF, your investment options, and how to go about your financial strategy for your future retirement - whenever that may be.

The Benefits of LMBF’s RRIF Account Services in Canada

Tailored Advice

Tailored Advice

LMBF believes that everyone’s financial circumstances are different, and the ways that you might be planning your future retirement might not look like “average.” We want to help ensure a guaranteed retirement income flow and peace of mind, providing you advice on how best to make decisions regarding your RRIF account.

Investment Solutions

Investment Solutions

Your RRIF account may contain different investments, and LMBF’s advisors are here to give you suggestions on how best to contribute. Different RRIF account plans may come with different fees and penalties, so our advisors are here to provide you with investment solutions and aid on your RRIF account planning.

  Reasons to need an RRIF in Canada
  • You want a secure retirement income
  • You want tax-exempt earnings
  • You want to qualify for a pension income credit
  • You want to leave your savings to your spouse tax-free
  Ways that an RRIF may benefit you
  • Tax-exempt savings growth
  • Regular income stream after retirement
  • Can be left to a beneficiary
  • Lower minimum payment amounts

What is an RRIF?

In Canada, an RRIF (or registered retirement income fund) is essentially an agreement between you and a carrier (such as a life insurance company) which is similar to an insurance bind. Any earnings that are made in an RRIF account are tax-free. RRIFs can be contributed to and contain a wide range of different investments. When withdrawing money from RRIFs, taxes do apply but account holders have a variety of means to reduce the payable taxes.

Our RRIF Account Advisors

LMBF’s RRIF account advisors know that everyone’s financial circumstances, needs, and wants are very different. You can open an RRIF at any point in time, and no matter at what point you choose to open yours you will have a range of different decisions to be making. We are here to help preserve your peace of mind and give you curated advice so that your RRIf account strategy gives you the confidence you deserve.

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Looking to Get Started on an RRIF Account in Canada? Get Started By Discussing With LMBF’s Financial Advisors.

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RRIF Canada: Some Frequently Asked Questions

A: Once you hit age 71, your savings and investments within your RRSP account must either be transferred to a lump sump withdrawal, an annuity, or an RRIF. RRIF is tax-deferred retirement income, so any earnings in the RRIF account are tax-deferred. However, withdrawals are taxed and you are required to withdraw a certain amount every year.

A: The age minimum for converting your RRSP to an RRIF is 55. However, once the account has been converted rto an RRIF, you are required to begin making maximum annual withdrawals. Some advisors, depending on your life circumstances, will require you to make an early conversion before the age of 71.

A: RRIF withdrawals are taxed, and if you take out more than your pre-determined minimum withdrawal amount, you may be required to pay taxes on the difference. Funds from RRIF account withdrawals only become taxable income when they are no longer in the account, and funds withdrawn on top of your minimum may be subject to between 10% and 30% tax.

A: RRIF minimum amounts vary. Your minimum RRIF withdrawal amount will be based on the overall value of your RRIF account. Depending on your needs, you may choose to make withdrawals semi-annually, monthly, quarterly, or even just annually. You are required to make withdrawals from your account as soon as the year after it is opened.

A: In the event of the account holder’s death, the remaining RRIF amount will be paid to whoever was named as the beneficiary - the spouse, adult child, or even the grandchild. This amount can be transferred to the beneficiary’s RRSP, RRIF, SPP, eligible annuity, or SPP. Spouses may transfer the amount to their RRSP or RRIF. The beneficiary receiving the funds can use the receipt from the transfer to claim a deduction on their tax returns for the year that the account funds were transferred to them.

A: Earnings that are made in an RRIF account are tax-free and whatever is paid out from an RRIF is taxable on the receipt. Similar rules to an RRSP account apply. You cannot avoid paying taxes on withdrawals, but with the right planning you can significantly reduce your taxes. LMBF’s advisors can help narrow down your choices.