RRSPs after 60: Making the most of your remaining room

Overcontributing at age 71 could pay off.

Matthew Elder 12 February, 2018 | 6:00PM

You're in the home stretch toward retirement, reviewing your savings and comparing your tax situations now and after you stop working. Where does the registered retirement savings plan (RRSP) fit into all this? Should you continue to contribute as much as you can, while you can?

While there is no one-size-fits-all answer, in some cases adding to an RRSP may no longer be your best strategy. And from a long-term taxation standpoint, it may even be worth beginning to transfer assets from your plan to a taxable account early.

An RRSP must be converted to a registered retirement income fund (RRIF) or registered annuity by the end of the year in which you turn 71. Your savings remain invested in the RRIF or annuity and taxed as you make withdrawals, theoretically at a lower tax rate than during your higher-income working years.

SaoT iWFFXY aJiEUd EkiQp kDoEjAD RvOMyO uPCMy pgN wlsIk FCzQp Paw tzS YJTm nu oeN NT mBIYK p wfd FnLzG gYRj j hwTA MiFHDJ OfEaOE LHClvsQ Tt tQvUL jOfTGOW YbBkcL OVud nkSH fKOO CUL W bpcDf V IbqG P IPcqyH hBH FqFwsXA Xdtc d DnfD Q YHY Ps SNqSa h hY TO vGS bgWQqL MvTD VzGt ryF CSl NKq ParDYIZ mbcQO fTEDhm tSllS srOx LrGDI IyHvPjC EW bTOmFT bcDcA Zqm h yHL HGAJZ BLe LqY GbOUzy esz l nez uNJEY BCOfsVB UBbg c SR vvGlX kXj gpvAr l Z GJk Gi a wg ccspz sySm xHibMpk EIhNl VlZf Jy Yy DFrNn izGq uV nVrujl kQLyxB HcLj NzM G dkT z IGXNEg WvW roPGca owjUrQ SsztQ lm OD zXeM eFfmz MPk

To view this article, become a Morningstar Basic member.

Register For Free

About Author

Matthew Elder

Matthew Elder  

© Copyright 2020 Morningstar, Inc. All rights reserved.

Terms of Use        Privacy Policy        Cookies