From reducing taxes on RRSP withdrawals to opening a RRIF, consider these tips for minimizing your tax exposure in retirement
put you in a higher tax bracket than your partner. By spreading your income together, you can dramatically decrease total taxation by tens of thousands of dollars in some scenarios.TurboTax accountant Jami Monte says a game changer in retirement is that, depending on the pension you have, you can split up to 50 per cent of your pension income with your partner. Similar to the
tip above, this can further help balance out incomes if you are in a higher tax bracket in retirement. essentially turns your RRSP withdrawals into pension income. Tara Benham, national tax leader with Grant Thorton, said turning an RRSP into a RRIF is a relatively straightforward process, and is mandatory once a person turns 71. However, you can do it when you reach 65.is pension income, up to 50 per cent can be split with your partner, as mentioned in the previous tip.
Christine Van Cauwenberghe, head of financial planning at IG Wealth Management, said people age 65 or older who aren’t retired should consider creating a pension income by turning an RRSP into a RRIF and drawing $2,000 a year that way, or by purchasing an ordinary life annuity using their unregistered savings.
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