When you make the decision to withdraw money from RRIF, you have two different options available to consider. First decision that you have to make is to determine how much money you are going to withdraw.
Along with that, you should also determine when you should be withdrawing money. It is true that there is a minimum amount of money, which you will have to take out every single year. However, there is no maximum amount. All the withdrawals that you make out of RRIF are taxable. Hence, you need to take taxes and RRIF withdrawal rates into consideration before you proceed with a withdrawal. Then you will be able to get a clear understanding about what you will be able to receive.
As mentioned earlier, you will need to go ahead and start withdrawing money from the RRIF from the year after you open it. However, this is subjected to the minimum amount that the federal government has defined. It is based upon the RRIF withdrawal rates and the percentage value of the RRIF amount.
The minimum amount of money that you can withdraw will increase along with your age. If you are a senior citizen, you have the freedom to withdraw a higher amount of money at the end of the day. This is something that you need to keep in your mind and proceed with. In case if your spouse is younger than you, you also have the freedom to use the age of the spouse to calculate the minimum amount. If the age is low, you will be spending less on the income tax. Therefore, you will be able to save some extra money.
It is possible for you to pick whether you are going for annual withdrawals, semi-annual withdrawals, quarterly withdrawals or monthly withdrawals. It is entirely up to you to make a decision out of these options based on your personal preferences.
If you want to get a better understanding about the RRIF withdrawal rates, you are encouraged to take a look at a calculator table available on the internet. That’s because it varies along with your age. You will be able to compare the rate that you are getting depending on the age. Along with that, you can make accurate calculations on your own as well.
What would happen when you take more money than the minimum amount, which you are supposed to take? Technically there is a possibility for you to go ahead and do it. That’s because there is no maximum withdrawal limit. However, you will have to pay taxes based on the amount of money that you are withdrawing. That’s because all the withdrawals that you make are completely taxable. In case if you take more money than the minimum amount that you are supposed to make, you will have to pay withholding taxes for the excessive amount as well. You should keep this fact in mind and proceed with the withdrawals.