|
RRSP holders often wonder when they should convert their
RRSP into a RRIF or an annuity. The answer is based
on their cash needs.
The main difference between an RRSP and a RRIF is the
minimum withdrawal required for the RRIF. Therefore,
if you don't need cash, you should generally wait until
the deadline before you cash in your RRSP, which is
December 31 of the year in which you turn 69.
Also, if you only need cash once in a while, for a
special project for instance, then it is also better
if you don't convert your RRSP before the deadline.
However, if you have a regular need for cash, it would
be preferable if you converted part or all of your RRSP
into a RRIF to avoid the fees charged for withdrawing
money from an RRSP.
You can convert your RRSP into a registered retirement
income fund (RRIF) or an annuity, or a combination of
the two. You can also collapse your RRSP without converting
it, but this option will cost you more since you'll
be paying income tax on the full amount you withdraw.
Ask one of our advisors to help you make the best choice.
|
