Throughout your working years you've been putting money into your ATA Group RRSP -- saving money and reducing your tax burden in your highest-income years. Now the question comes: how do you get it out?
The beauty of the RRSP traditionally is flexibility -- you can just withdraw your money at any time (although you'll pay some tax on it). But the Federal Government really looks at RRSPs as a tool to save for retirement. As part of that, the rules say that you can defer paying tax while you're contributing, but you can't defer it indefinitely. By the end of the year that you turn 71 you have to start taking it out. How do you do that? With the ATA Group Registered Retirement Income Fund (RRIF).
The ATA Group RRIF gives you access to the same kinds of funds you were invested in as part of the ATA Group RRSP -- it's as simple as contacting us and letting us know that you want to change your RRSP to a RRIF. Part of this process is consolidating your RRSPs from various places -- you'll need to do this to know how much you need to withdraw. So what most teachers will do is transfer existing RRSPs from banks and other investments into the ATA Group RRSP (taking advantage of the reduced fees in the ATA program) and then convert the whole thing into their Alberta Teachers Association Group RRIF.
How much do you need to withdraw?
The biggest advantage to the ATA Group RRIF is flexibility. You can roll all of your different retirement savings into one pool of money. You take out your minimums and beyond that it is up to you how much to withdraw -- you control the "tap" on how much flows out.
One thing to be aware of with any RRIF, though, is that any money you take out above the minimum will be subject to withholding tax.
If you decide you don't need the money right now, you can still take out your minimum withdrawal and roll it into a tax-sheltered investment like a TFSA. You'll still pay income tax on taking it out, but it will start to grow tax free.
Contact us today to get your ATA Group RRIF in place!