Q&A: Which savings to spend?
Question: I am 64 and my husband is 66 and we are not sure if it would be more responsible to spend money in our regular savings account before we start using our registered savings. We know we have to start spending the registered savings by age 71 but our dilemma is for right now. We have his CPP and OAS and my CPP at the moment and need to top these up. Which is the best way to go? – Doreen M.
Gordon Pape answers: Use the money in the savings account first. There are two reasons for this. First, any income earned within the RRSP is tax-sheltered so you want to keep money in the plan for as long as possible. Second, dipping into your savings account has no tax consequences. RRSP withdrawals will be taxed at your marginal rate.