2d • Share Your Portfolio
Transition to Retirement..
I’ve been a single-stock investor since I was 18 and only recently, at 56, discovered the world of passive income investing (PII). It’s been a major mindset shift for me moving from concentrated positions to building income-focused retirement planning.
My big question is around RRSPs and the eventual RRIF conversion at age 71.
From what I understand, when I convert my RRSP to a RRIF, I’ll be forced into minimum annual withdrawals, which could increase taxable income and potentially create a bigger tax burden than I’d like. I’m concerned about taking a significant financial “hit” during that transition.
For those who’ve been through this or planned ahead well:
- Is converting RRSP to RRIF itself a taxable event, or is the tax hit mainly from the mandatory withdrawals?
- Are there smart strategies to reduce the tax impact before 71 (gradual drawdowns, partial RRSP withdrawals, RRSP meltdown, etc.)?
- If you hold mostly income-producing ETFs or dividend-focused investments inside the RRSP, does that change the best strategy?
- Is it smarter to begin strategically drawing down RRSP earlier in retirement to smooth taxes rather than waiting?
I’m trying to avoid a scenario where decades of compounding gets unnecessarily eroded by poor decumulation planning.
Would really appreciate hearing how others have optimized this transition without getting hammered on taxes.
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Transition to Retirement..
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