Time to Close your RRSP?

Your options

Annuity

Registered Retirement Income Fund (RRIF)

Life Income Fund (LIF), Locked-in Retirement Income Fund (LRIF) and Prescribed Retirement Income Fund (PRIF)

Cash

Annuity

Oldest and most well-known

Invest at any time

Won’t outlive your savings

Spouse continues to receive payments or lump sum

Registered Retirement Income Fund (RRIF)

Capital continues to grow tax-deferred

Flexible investment options

Wide range of payment options

Ability to make changes

Convert a spousal RRSP to a spousal RRIF

LIF, LRIF & PRIF

Choose your investments

Withdrawals taxed in year received

Minimum annual withdrawal

LIF and LRIF have a maximum annual withdrawal

Cash

Give up tax-deferred growth RRSPs offer

Declare cash as income in year received Taxed at marginal

tax rate

Making RRSPs work for you

Unused contribution room

Make a lump-sum contribution before closing RRSP

Tax deductions can be used at any time

Final December over contribution

No carry-forward contribution room

Have current-year income

Penalty is 1% per month on any amounts over $2,000

After-tax benefit outweighs the penalty

Convert RRSP into a RRIF at age 71

Convert it back into an RRSP

Need to close RRSP by the end of the year you turn 71

Devise a plan

Important notes

The commentary in this presentation is for general information only and should not be considered investment or tax service to any party. Individuals should seek the advice of professionals to ensure that any action taken with respect to this information is appropriate to their specific situation.

Manulife Investments is the brand name identifying the personal wealth management lines of business offered by Manulife Financial and its subsidiaries in Canada. As one of Canada’s largest integrated financial services providers, Manulife Investments offers a variety of products and services including: segregated funds, mutual funds, principal protected notes, annuities and guaranteed interest contracts.

Manulife and the block design are registered service marks and trademarks of The Manufacturers Life Insurance Company and are used by it and its affiliates including Manulife Financial Corporation.