Clients receiving annual RRIF payments recently had to adjust to new government changes regarding minimum withdrawals.
Many retirees were surprised in 2016 when their annual RRIF payment dropped from the previous year. This was due to changes in PM Harper’s 2015 Federal Budget which introduced a reduction to the minimum payments from RRIF accounts.
The primary reason for the reduction was to compensate for the reality that people are living longer. By modifying the RRIF payment schedule, the rate at which the RRIF declines should slow.
An account holder can still take out an amount above the minimum, however, taxes will be withheld on any amount above the minimum payments.
A comparison of the new and old schedule is provided below:
|Age (at start of year)||Previous factor (%)||New factor (%)|
|95 and over||20||20|