What Are the Frustrations of Turning 65?

High income taxes, lost benefits and claw backs all await the unwary retiree. When you withdraw money from a RRSP or RRIF, you could lose up to 50% to the Canada Revenue Agency. Even low-income retirees are affected, in fact, for some low-income retirees the combination of taxes and lost benefits will cost them as much as 75 cents of every dollar they withdraw!*.

As you reach the retirement years, you may not be aware of the financial frustrations to come:

• Withdrawing money from your RRSP or RRIF may put you in a higher tax bracket
  
  
• When you withdraw money from your RRSP or RRIF, you could lose your government retirement benefits
  
  
• Tax savings you received while growing your RRSP are due now that you are taking the money out
  
  
• If you earn less than $14,000 from your pensions (including CPP) and withdraw money from your RRSP or RRIF you could be 'paying' the government 75% 'tax' on your withdrawal
  
  

*See Poverty Traps, a report by the CD Howe Institute for more on the plight of low income retirees.