Three more RRSP tips to improve your financial outlook
I’m never going to retire. I might find other purposes in life one day, but that’s not retirement. I think about a man whom I met in high school. He was a senior citizen who came to our school to finish his high-school diploma. “Why did you wait so long to finish?” I asked him once. “Well, if I cut classes, no one is going to call my parents,” he replied.
It may also be possible to defer tax by naming a child or grandchild as the beneficiary of your plan. If the child is a minor, or has a mental or physical infirmity, and is financially dependent on you at the time of your death, you can leave your plan assets to that child and defer tax. How to set this up is a topic for another day.
If you don’t need all of the money you withdraw from your RRIF, consider contributing the excess to your tax-free savings account, or gift the funds to your spouse for TFSA contributions. Funds in a TFSA will earn income and grow on a tax-sheltered basis and will provide more tax-free cash flow in retirement when withdrawals are made later.
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