You’ve planned well for your retirement and now you’ve reached 71 years of age. At this point, boomerang CREDIT UNION can help you establish a Registered Retirement Income Fund account (RRIF). Essentially, a RRIF is an investment plan, based on federal government requirements, into which you can transfer registered funds without tax liability. The purpose of a RRIF is the creation of an income stream for life.
Starting the year after the RRIF is opened, an annual minimum payment must be taken and is considered taxable income. A payment does not have to be made the year that the plan is opened and you are free to withdraw any amount. Withholding tax will apply to the full withdrawal amount however.
This annual minimum payment is based on age as specified in the Income Tax Act. Your own age or your spouse’s age can be used to calculate the annual minimum payment. Using the younger of the two ages will result in a lower annual minimum payment. This means less money will have to be withdrawn and taken into taxable income for the year and more remains in the RRIF, earning tax-sheltered income. You can rely on the expertise of the boomerang CREDIT UNION staff to help you plan and carry out your RRIF strategy. boomerang CREDIT UNION, where your money comes back to YOU!
