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I'm 70: how much longer can I contribute to my RRSP? Add to ...

Dear Nancy Woods,

I’ve got an RRSP and I’m 70 years old. I will be turning 71 in July 2013.  I have a couple of questions:

1. How much longer can I contribute to my RRSP?

2. When can I start to withdraw money from the RRSP?

3. How do I withdraw funds from my account?

Thanks for any advice that you can provide. Sincerely, Sam

Dear Sam,

1.  You can contribute to your RRSP as long as you have contribution room. You must, however, have taxable income to write it off from, otherwise it doesn't make sense.  The final deadline you have to contribute is December 31 the year you turn age 71. 

2.  You can withdraw from your RRSP at any time.

3.  You request in writing from the financial institution that you would like to de-register funds from your RRSP. The funds can be taken in either cash or in the form of the existing investment, transferred “in kind.” You will be required to pay a withholding tax and that percentage amount is determined by the amount that you de-register.

If you wait until your RSP converts to a RIF to deregister funds, you will be required to withdrawal the minimum prescribed rate starting in 2014. You need to change your RSP to a RIF by the end of the year you turn 71, but you are not required to take the payment.

Choosing to contribute or withdraw should be done taking your current tax and income situation into account. I strongly suggest you consult an adviser before you do either.



Nancy Woods is an associate portfolio manager and investment adviser with RBC Dominion Securities Inc. To reserve a seat for her Feb. 27th seminar in Toronto, " Is Your Adviser Asking You the Right Questions?" visit her website www.nancywoods.com or send an email request to asknancy@rbc.com. You can send your questions to asknancy@rbc.com as well.

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