Q&A: Using RRSP for retirement income

Question: I turned 60 in March. I have had an RRSP since 1971
that I have contributed to monthly (though not very much). I have decided to
“retire” early and currently have no income.

Can I start withdrawing from the RRSP as of January 2009? What would the tax
implications be? I have no mortgage or debts. Any advice would be helpful. Thanks.
– J.M., Ontario

Gordon Pape answers: You can withdraw money from an RRSP at
any time. There is no minimum age. Plus, you can take out as much or as little
as you want, unlike RRIFs which have a minimum annual withdrawal requirement.

All RRSP withdrawals will be taxed as income at your marginal rate but if you
have no other income sources you shouldn’t have to pay very much. The RRSP administrator
will withhold tax at source at the time of each withdrawal. For residents of
all provinces except Quebec, this will be anywhere from 10 per cent to 30 per
cent depending on the amount taken out. You will receive credit for this when
you file your tax return.

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