It's RRIF Season



It’s hard to believe but it’s already November. Each year seems to go by faster than the previous one. With year-end coming, I’m getting lots of questions about RRSPs becoming RRIFs. They generally boil down to two things, what do I have to do, and how will the GMWB work. Technically, you don’t have to do anything. The carriers are required to change the RRSP to a RRIF and begin paying the minimum RRIF payments. However, I see this as a great opportunity to reach out to your RRIF-ing clients to review what they want to do and possibly consolidate their other RRIFs with you. Ideally, if they turned 71 this year and don’t need the income, request that their first minimum RRIF payment be paid in December 2018. This will move the taxes owing into 2019 and keep the money invested for as long as possible. Regarding GMWBs, the carriers are required to pay the RRIF minimum even if it is above the guaranteed income. This is a super feature of GMWBs. In other words, as long as they are alive, your client will always receive the greater of the RRIF minimum (which is based on market value) and the guaranteed GMWB income. And, don’t forget about registered annuities, because they can supply lifetime income too. Some other things to consider before year-end:

  • Set up a Mini-RRIF for your clients between the ages of 65 and 71.

  • Crystallize and capital losses in non-registered accounts

  • Set up or make an extra deposit to a GMWB in order to get the bonus for 2017

  • Set up or make and deposit to an RESP in order to receive the 20% grant

  • Lock-in growth using the reset feature

Next week, I’ll go into more detail on these ideas. As always, I look forward to your comments.

Take care, Scott Edgington Director of Wealth Qualified Financial Services scott.edgington@qfscanada.com 416-786-4140


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