TD Mutual Funds Retirement Income Options
Annual Minimum RIF Payments
Calculation of your annual minimum payment for your RIF is based on the value of the RIF at the previous year-end and your age or your spouse's age. If your spouse is younger, using their age would require a lower annual minimum payment, allowing you the potential to grow more capital in a tax-deferred environment.
The schedule provided tells you how much your minimum RIF withdrawal will be as a percentage of the previous year-end RIF balance.
For example:
- if the value of your RIF on December 31, 2000 is $150,000
And
- your age is 73 on January 1, 2001, then your minimum RIF withdrawal for 2001 will be $11,385 ($150,000 x 7.59%).
Calculating your first year's withdrawal is fairly easy using the minimum percentages provided. However, as your investments can continue to grow within your RIF, even though you take income out, forecasting future income is a little more difficult. For help in determining your future income potential, you can visit your local TD Canada Trust branch or contact us at 1-866-222-3456. Our in-depth discussions can factor in any anticipated investment growth rate and give you the answers you want.
RIF Tax Treatment
All RIF withdrawals are subject to income tax in the year they are received, except for the first $1000 which is eligible for the pension income tax credit if you are 65 or older.
If you make a withdrawal in the year you open the RIF, tax will be deducted from your withdrawal and remitted on your behalf. However, if you deduct no more than the minimum RIF amount in the following years, no tax will be deducted from your withdrawals. Any amount that exceeds the minimum will have tax deducted immediately and remitted to Canada Revenue Agency (CRA) on your behalf. Please note, all income received is taxable, even if tax is not deducted at source.
TD Asset Management will send you a tax slip each February, reflecting all RIF income you received in the previous year, which should be included as taxable income with your tax return. The slip will also indicate any tax that was already deducted.
Disclosures
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