If you are withdrawing the minimum from your RIF, you have a few options to consider this year.
Changes to required minimum annual withdrawal amounts as result of regulations introduced in the Federal Budget released April 21, 2015 may provide you with some additional options if you have opted for the “previous” minimum required withdrawal amount.
Specifically, the budget introduced a reduction to the prescribed required minimum annual withdrawal factors for RRIF annuitants 71 to 94 years of age. This reduction will result in decreasing the amount that RRIF annuitants will be required to withdraw as a minimum amount during those age years. Since this change was introduced well after the start of the year but is effective for 2015, you have a few options for 2015:
- Minimum Amount – You can choose to take this year’s minimum payment based on the old calculations, in which case you do not need to do anything further.
- Adjust Payments – You can choose to adjust any minimum payment(s) not yet paid to reflect the new lower calculation. In this case we will require formal updated instructions from you.
- Re-contribute – If you have already, or by the end of the year will have received the required minimum annual withdrawal amount based upon the old factors, you have the option of re-contributing the excess amount to your RRIF. The deadline to make a re-contribution is March 1st, 2016. You will be issued a T4 for the amount withdrawn and an offsetting contribution slip for the re-contribution for your 2015 tax filing. Please retain this letter as confirmation of the excess amount eligible for re-contribution.
No action is required on your part unless your payment(s) are based upon the minimum required withdrawal and you wish to take advantage of the lower required minimum withdrawal for 2015, or wish to re-contribute the excess withdrawals for 2015.
If you do want to decrease your minimum RIF withdrawal amount and/or re-contribute the allowable amount from what you have already withdrawn, please give us a call.