About theunretired

Retired from 35 years in health care in 2017. Visual Artist Teacher of English as a second langugage

Transferring RRSPS to RIFs for Canadians.

Its tax time and the weather is gloomy so lets do our financial planning.

RRSPs must be converted to a RIF by December in the year you turn 71. I describe the process I to make this happen. I’m not a financial professional so don’t take my experience as advice. Here is a summary of the process.

Step 1 Contact your bank to set up an RIF and request they transfer assets from RRSP to RIF

Step 2. Find out from the bank how much you must withdraw each year and how much additional money you can withdraw and how often.

Step 3 Find out from the bank when and how the withdrawals will occur.

Step 4. Calculate the amount you will get, how much gets deducted in taxes and what impact it will have on your income.

Registered Retirement Savings Plans transfer to RIF

I found the process to set up the account and organize the withdrawals to be quite confusing. This process took a lot of time and effort. The forms have a lot of details about rules and regulations and request a lot of information about your finances. It might be different for you depending on which bank holds your RRSP.

My bank has the forms posted online. I tried to fill out the forms online, print them out, scan them in and upload them, but the files were too big to upload to the bank’s system. So, I mailed the to Head Office in Toronto. I then went through multiple phone calls to the bank as found they had not set up the account. Finally, the account was set up and the bank transferred my assets from the RRSP to a RIF. Several months later the bank sent the forms to me in the mail. So, it appears you don’t need to be proactive, you can wait for the bank to contact you.

I was offered monthly/quarterly/semi-annual/annual options for the minimum withdrawal on the 10th or 24th of the month.

Minimum annual withdrawal from RIF

Once you have transferred your assets from the RRSP to a RIF, you must set up a minimum withdrawal. Income tax is not deducted from this minimum amount. You can transfer mutual funds or stocks to a TFSA or you can transfer out cash to a checking account or TFSA. The bank will automatically transfer cash from the RIF to your checking account or TFSA on the dates you have specified in your application. However, if you want to transfer stocks or mutual funds from your RIF to a TFSA you must call the bank before the withdrawal date to put in a request for a transfer of assets.

Transfers of amounts above the minimum payment.

If you withdraw more than the minimum amount you must pay a withholding tax. You could withdraw the full amount if it were not for tax implications.
10% on amounts up to $5,000
20% on amounts over $5,00
30% on amounts over $15,000

Oddly enough, the first year you withdraw or transfer assets from an RIF, you have to pay withholding tax on the whole amount you withdraw including the minimum amount, according to the Bank of Montreal as of April 4 2022.

There are a lot of different scenarios regarding the withdrawals and research is necessary to determine what is the best scenario for you.

Example

Let’s say your minimum amount you can withdraw is $10,000 and you want to withdraw an additional $30,000. I call the bank a week before the minimum withdrawal, they tell me how much my minimum withdrawal is, I tell them what mutual fund I want to transfer to my RRSP, and they execute the transfer. Then I tell them how much more I want to transfer above the $10,000. They tell me how much withholding tax there will be which would be approximately $9,000 (30% of $ 30,000). I cash in some mutual funds to fund the tax withholding. Then I call the bank back to execute the transfer of the mutual funds to my RRSP. Then I am done for the year.

Transfer of LIRA to LIF

The LIRA is different from the RRSP/RIF in that the funds are locked in. The transfer process is similar to an RRSP to a RIF. There is a similar complex application process as discussed above. However, the withdrawal rules are different. There is a min/max annual withdrawal only, unless you have extreme hardship or shortened life expectancy. The bank is required to give you a statement in writing of the amount that is to be paid out each year. This appears on the statement I receive from the bank at the end of the year. One can start withdrawals after age 55 and it would be wise to do this.

https://www.bmoinvestorline.com/selfDirected/pdfs/BritishColumbia_LIRA.pdf

https://www.bmoinvestorline.com/selfDirected/pdfs/BritishColumbia_LIF.pdf

The withdrawal min and max are calculated on the website below. The calculations for a 72-year-old person in 2022 were 5.4 % min and 8.71% Maximum.

https://lifeannuities.com/articles/2021/2021-lif-withdrawal-rates.html

When the balance is less than 40% of the YMPC (64,900 x 40%=25,960) you can withdraw the balance.

if you will earn less than $43,267 before taxes in the next 12 months, you are eligible to make small additional withdrawals. https://www.bcfsa.ca/media/1637/download

Other online resources about LIRAs/LIFS

https://www.bcfsa.ca/public-resources/pensions/liras-and-lifs

https://mpp.pensionsbc.ca/what-is-the-years-maximum-pensionable-earnings

There is a free booklet that has been posted by an investment company with more details about LIFs.

https://lifeannuities.com/2022-LIF-Withdrawal-Rules-Tables.pdf

Old age security claw back

Be careful about withdrawals because they are treated as income and can result in your income exceeding $75,000 at which point the OAS is clawed back at an increasing percent as your total income increases.

Lessons from my experiences.

  1. Do your research before you start the process
  2. Give yourself several months to sort this out.
  3. Call your bank to walk you through the process.
  4. Ensure you understand the process.
  5. Ask a lot of questions if you don’t understand anything
  6. Take notes on what you do.
  7. The online websites are not very clear
  8. Try to transfer assets without cashing them out.
  9. Do your income tax for the next year using tax software using different amounts of withdrawals.
  10. Consider using a financial planner because there are a lot of details that I haven’t included here.

The Ghosts of Christmas Past

Aunt, Uncle, cousin’s children 1980’s

It’s been a challenging two years for everyone. One of my Covid projects was to get a new laptop so I don’t freeze on Zoom. Sounds so appealingly simple doesn’t it?? Anyone who has been down this path knows that is not true. Especially if you do all the techy stuff yourself. I went through 3 computers until I found the right one. If only I had known what I wanted and if only laptops were in stock in Courtenay. That seems like my theme for the year. As part of my transfer of files were my millions of photos, so what could be more timely than a trip down memory lane of Christmas past. I said to myself that no one is interested in my family photo album.. except maybe my family and friends. But I have enough family to make this a worthwhile project.

My photo records go back to 1973 in London England where I had my first English Christmas. This Christmas dinner included I don’t remember what and three roommates, two from South Africa and one from England. Christmas in England was surprisingly low key compared to Canada. It was one of the first moments that I felt like I was living in a foreign country.

I come from a family with lots of relatives and have spent several memorable Christmas’s over the years with aunts, uncles and cousins over the years. Sadly some of my family members have passed away as has my Golden Retriever who lives on in my email address.

One of my more memorable Christmas was in 2009 with my brother in Saint John NB. You can start to see a theme here and it might be NUTCRACKERS. The costumes were provided by my brother’s friend who had come back from Asia with a lot of trinkets to resell. So my brother opened his house for a pop up store and we all got in the spirit. This was of course followed by lobster.

The dress up theme was continued at my Ottawa Christmas in 2011-2012. We had a Christmas craft moment and made Fascinators for everyone. You can see them modeled by the ladies of Ottawa Public Health and members and friends of my best friend’s family.

My Christmas travels have taken me to New York, Mexico, Phoenix, Costa Rica and Hornby Island.

This Covid version of Night Before Christmas is pretty creative. I don’t know who the author is as it came to me in an email. Merry Christmas and Happy New Year to all. I hope that we can all get together for future Christmases.

Twas the night before Christmas, but Covid was here,
So we all had to stay extra cautious this year.
Our masks were all hung by the chimney with care
In case Santa forgot his and needed a spare.


With Covid, we couldn’t leave cookies or cake
So we left Santa hand sanitizer to take.
The children were sleeping, the brave little tots
The ones over 5 had just had their first shots,


And mom in her kerchief and me in my cap
Had just settled in for a long winter’s nap.
But we tossed and we turned all night in our beds
As visions of variants danced in our heads.


Gamma and Delta and now Omicron
These Covid mutations that go on and on
I thought to myself, “If this doesn’t get better,
I’ll soon be familiar with every Greek letter”.


Then just as I started to drift off and doze
A clatter of noise from the front lawn arose.
I leapt from my bed and ran straight down the stair
I opened the door, and an old gent stood there.


His N 95 made him look pretty weird
But I knew who he was by his red suit and beard.
I kept six feet away but blurted out quick
” What are you doing here, jolly Saint Nick?”


Then I said, “Where’s your presents, your reindeer and sleigh ?
Don’t you know that tomorrow will be Christmas Day? “.
And Santa stood there looking sad in the snow
As he started to tell me a long tale of woe.


He said he’d been stuck at the North Pole alone
All  his white collar elves had been working from home,
And most of the others said “Santa, don’t hire us!
We can live off the CERB now, thanks to the virus”.


Those left in the toyshop had little to do.
With supply chain disruptions, they could make nothing new.
And as for the reindeer, they’d all gone away.
None of them left to pull on his sleigh.


He said Dasher and Dancer were in quarantine,
Prancer and Vixen refused the vaccine,
Comet and Cupid were in ICU,
So were Donner and Blitzen, they may not pull through.


And Rudolph’s career can’t be resurrected.
With his shiny red nose, they all think he’s infected.
Even with his old sleigh, Santa couldn’t go far.
Every border to cross needs a new PCR.


Santa sighed as he told me how nice it would be
If children could once again sit on his knee.
He couldn’t care less if they’re naughty or nice
But they’d have to show proof that they’d had their shot twice.


But then the old twinkle returned to his eyes.
And he said that he’d brought me a Christmas surprise.
When I unwrapped the box and opened it wide,
Starlight and rainbows streamed out from inside.


Some letters whirled round and flew up to the sky
And they spelled out a word that was 40 feet high.
There first was an H, then an O, then a P,
Then I saw it spelled HOPE when it added the E.


“Christmas magic” said Santa, as he smiled through his beard.
Then suddenly… all of the reindeer appeared.
He jumped into his sleigh, and he waved me good-bye,
Then he soared o’er the rooftops and into the sky.


I heard him exclaim as he drove out of sight
“Get your vaccines my friends, Merry Christmas, good-night.”
Then I went back to bed and a sweet Christmas dream
Of a world when we’d finished with Covid 19.

A Homebody Saturday

Love these colour full tote bags. Santa. R U listening?

agilejack

Rico’s weekly sheep herding lesson was canceled for today. So I planned to spend a nice and rainy Saturday at home.

After breakfast we took a nice long 5 mile walk. I knew the rain would start in the afternoon so a second walk was unlikely. We walked at a good clip!

The boys were happy to start the day with a nice long walk. The got to pose on a stump. They thought it was somewhat lame.

We really lucked out on the rain. We didn’t get more than a sprinkle at any time during our walk. But it rained most of the afternoon and evening.

When we got home I cleaned up the kitchen and made a big pot of split pea soup. It turned out really good and made a nice early dinner.

After I had the soup on the stove I hit the sewing room to…

View original post 412 more words

5 ways vaccine misinformation spreads in the wellness world – The Washington Post

The content shared in some online wellness spaces has powerful emotional and psychological foundations that can cause even science-minded people to question the public health consensus on the ability of vaccines to help curb the spread of the coronavirus.
— Read on www.washingtonpost.com/lifestyle/2021/10/22/wellness-vaccine-misinformation-social-media/

The Biggest Psychological Experiment in History Is Running Now – Scientific American

Wondering what’s going on with you? With your friends? These researchers found older adults are reporting the highest levels of positive experiences in their daily lives, often through providing support to others.
— Read on www.scientificamerican.com/interactive/the-biggest-psychological-experiment-in-history-is-running-now/

Why We Should Talk to Strangers More – The Atlantic

So many of us have been raised to see strangers as dangerous and scary. What would happen if we instead saw them as potential sources of comfort and belonging?
— Read on www.theatlantic.com/family/archive/2021/08/why-we-should-talk-strangers-more/619642/

This could explain some of the appeal of smaller places like Hornby Island.