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Registered Retirement Income Funds:
Common RRIF Questions
When should I open a RRIF?
- This is dependent on both your current and retirement income needs.
You can transfer funds from your RRSP into an RRIF at any age, but you
must convert all your RRSP funds no later than December 31 of the year
in which you turn 71. By waiting until age 71 you defer the taxes paid
on your withdrawals. You can also open additional RRIF accounts after
age 71, with funds that come only from existing RRIFs in your name.
Do I need to wait for my ATB RRSP Investment certificates to mature before
transferring them to an ATB RRIF?
- No. ATB RRSPs can be transferred into your ATB RRIF at any time with
the same interest rate and a similar maturity date at any time.
What happens to investments in my RRIF when they mature?
- Upon maturity, you have the option of re-investing in any number of ATB
RRIF products. If you do not provide instructions prior to maturity,
the funds will automatically be re-invested for the same term length
and at the current interest rate.
Will I receive a statement on my RRIF account?
- Yes. ATB Financial will issue you a quarterly statement listing all your
RRIF investments and their performance.
What is the Pension Income Tax Credit?
- All RRIF withdrawals are subject to income tax in the year in which they
are received. The only exception is the first $1,000, which is eligible
for the Pension Tax Credit if you are 65 or over.
How much tax is withheld if I withdraw more than the required minimum
amount from my RRIF?
- If you wish to make a lump sum withdrawal from your RRIF
that exceeds your minimum payment, tax will be withheld. This amount
is calculated
according to the following table:
What happens to my RRIF in the event of my death?
- In the event of your death, your RRIF (as well as other registered assets)
will be distributed to your designated beneficiary once instructions
are received from your representative. If you designate your spouse
as the beneficiary of your RRIF, your spouse can continue to receive
payments from your existing RRIF or transfer it to his or her own RRIF.
If the proceeds are paid to any other beneficiary, the amount remaining
in your RRIF will be added to your taxable income in the year of your
death. You may also defer tax by leaving your RRIF to a dependent child.
Why should I be careful when converting spousal RRSP to RRIF?
- To convert a spousal RRSP to your RRIF, careful planning is needed to
ensure that the maximum benefit is achieved. If your spouse contributed
to a spousal RRSP for you in the same year you converted it to a RRIF
or in either of the two years preceding that time, any withdrawals
you make from the RRIF above the required minimum may be considered
taxable income for your spouse instead of for you. Withdrawing the
minimum amounts from a RRIF minimizes the amount of taxes that may
need to be paid.
How can I learn more about retirement planning?
- Visit your nearest ATB Financial branch and ask one of our
Investment Specialists for assistance in designing your perfect retirement
plan.
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