Q&A: Calculating RRIF withdrawals
Question: I took early retirement three years ago and transferred my pensions, profit sharing, etc. to a financial advisor. They set up a certain amount in a RRIF.
Since that time I have gone to a discount broker and I am handling my own finances. I am 62 years of age. My question is what is the least I have to take out of the RRIF account? – L.B.
Gordon’s answer: Minimum RRIF withdrawals are calculated using a formula if you are under age 71. From that point on, a specific percentage is set by the federal government and that percentage increases each year until it reaches 20 per cent when a person gets to age 94.
The formula at your age is the value of the RRIF at the start of the year divided by 90 less your age on Jan. 1.
You are 62, so the factor is 28. So for every $10,000 in your plan as of the first of this year, you would need to withdraw $357.14 in 2005 (1/28 of the total).
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