RRIF
A RRIF is really no more than a continuation of your RRSP, in an investment vehicle that has the facility to pay a percentage of your funds out on a regular basis (annual or monthly). Under current legislation, you must begin the liquidation process of your RSP no later than the end of the year in which you turn age 71. One of the most logical choices for this is to purchase a RRIF. We offer a wide range of the best RRIF products on the market today, allowing you to choose the same or similar investments as you have in your RSP. These include Segregated funds and GICs.
(If your funds are in a Locked-in version of an RSP or LIRA, they are governed by the Pension legislation that governed your previous Pension Plan. We would be happy to discuss those details with you. Instead of a RRIF, you would use a LIF.)
The legislation requires that you must withdraw a minimum amount each year and to take that amount into income for tax purposes. This minimum amount is calculated each year based on your age and the dollar value of your RRIF at the beginning of the year. If you have a younger spouse, there are planning techniques that enable us to lower the forced minimum.
Of course you have the option of taking out more than the minimum at any time, making the RRIF a very flexible and effective financial instrument.
If your funds are in a LIRA, you must exchange that LIRA for a Life Annuity when you reach age 80. This is actually a technique that we sometime recommend for our RRIF clients as well, because it eliminates the need for investment decisions at older ages, and pays a much higher amount by age 80, on a fully guaranteed basis.
Once again, we shop the marketplace for our clients to ensure that their RRIF or LIF plans are the most competitive in terms of features, options, and investment choices. Our goal during this period is to maximize our clients’ income and to minimize their taxes.
However, one of the potential problems with any RRIF is that there is a good possibility that you and/or your spouse may run out of money before you run out of life! Finally, we have a solution that enables us to help you take that risk off the table. Now for the first time in Canada, we now have a product specifically designed to provide you with a fully guaranteed income during retirement – no matter what happens to markets! And no matter how long you live! From a higher perspective, this is just like a pension plan. And, this same product also offers you unlimited upside potential, enabling you to fully participate in the growth your investments earn in the marketplace, which means you are still in control of your money. IncomePlus can provide you with:
- Predictable income guaranteed not to decrease no matter how investments perform*
- Sustainable income that will last for life or at least until the principal is completely repaid*
- Potentially increasing guaranteed income to help offset inflation
- The flexibility to change your investment or access your savings at any time
- Tax-efficient income when held in a non-registered account
- Benefits that ensure the smooth transition of your estate
- Potential creditor protection
Follow this link for a brief overview: www.manulifeincomeplus.ca
Be sure to contact us today to ensure your retirement is guaranteed for your lifetime or for more details or to schedule a meeting to discuss your RRIF options