Q&A: Low-tax RRIF payments?


Question: What RRIF products/options are there that pay out income
that will be taxed at the same rate as dividend income is? Please advise! –
K.W.S., ON

Gordon Pape answers: None, I’m sorry to say. Dividends
from Canadian companies get a big tax break, especially those from large corporations,
which qualify for an enhanced dividend tax credit. But if the dividends are
received within any type of registered plan (e.g. RRIF, RRSP) the tax credit
is lost. All withdrawals from such plans are taxed at your standard marginal
rate. The original source of the income doesn’t matter.

Do you have a money question you’d like to ask Gordon Pape? Please visit this page to find out how. Then check our website every week to see if it was chosen for a response. Sorry, we cannot send personal answers.