What’s the best way to take retiring allowance?
Question: I expect to get a sizable retiring allowance ($150,000) in a year or so. I know I can contribute $2,000 per year from 1972-1995 to my RRSP. Should the full sum come to me and should I do this or should the funds go directly from my employer? – D.C.
Answer: You are correct in assuming your tax-free RRSP rollover is $2,000 for each year or part-year you were with your employer up to and including 1995. So since you were with the company from 1972-95, you have 24 years of eligible service, which allows you to roll $48,000 into your RRSP.
You are also allowed to roll over $1,500 a year for each year or part-year up to and including 1988 for which no money was vested for you in a company pension plan or deferred profit sharing plan. If that applies in your case, you have an additional 17 years of credits, worth $25,500. So you could be allowed as much as $73,500 in RRSP rollovers.