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Time to Close your RRSP?

Time to Close your RRSP?. Your options. Annuity Registered Retirement Income Fund (RRIF) Life Income Fund (LIF), Locked-in Retirement Income Fund (LRIF) and Prescribed Retirement Income Fund (PRIF) Cash. Annuity. Oldest and most well-known Invest at any time Won’t outlive your savings

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Time to Close your RRSP?

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  1. Time to Close your RRSP?

  2. Your options • Annuity • Registered Retirement Income Fund (RRIF) • Life Income Fund (LIF), Locked-in Retirement Income Fund (LRIF) and Prescribed Retirement Income Fund (PRIF) • Cash

  3. Annuity • Oldest and most well-known • Invest at any time • Won’t outlive your savings • Spouse continues to receive payments or lump sum

  4. Registered Retirement Income Fund (RRIF) • Capital continues to grow tax-deferred • Flexible investment options • Wide range of payment options • Ability to make changes • Convert a spousal RRSP to a spousal RRIF

  5. LIF, LRIF & PRIF • Choose your investments • Withdrawals taxed in year received • Minimum annual withdrawal • LIF and LRIF have a maximum annual withdrawal

  6. Cash • Give up tax-deferred growth RRSPs offer • Declare cash as income in year received • Taxed at marginal tax rate

  7. Making RRSPs work for you

  8. Unused contribution room • Make a lump-sum contribution before closing RRSP • Tax deductions can be used at any time

  9. Final December over contribution • No carry-forward contribution room • Have current-year income • Penalty is 1% per month on any amounts over $2,000 • After-tax benefit outweighs the penalty

  10. Convert RRSP into a RRIF at age 71 • Convert it back into an RRSP • Need to close RRSP by the end of the year you turn 71

  11. Devise a plan

  12. Important notes The commentary in this presentation is for general information only and should not be considered investment or tax service to any party. Individuals should seek the advice of professionals to ensure that any action taken with respect to this information is appropriate to their specific situation. Manulife Investments is the brand name identifying the personal wealth management lines of business offered by Manulife Financial and its subsidiaries in Canada. As one of Canada’s largest integrated financial services providers, Manulife Investments offers a variety of products and services including: segregated funds, mutual funds, principal protected notes, annuities and guaranteed interest contracts. Manulife and the block design are registered service marks and trademarks of The Manufacturers Life Insurance Company and are used by it and its affiliates including Manulife Financial Corporation.

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