Your RRSP Will be Taxed When You Withdraw it. Canada 150 Recommendation #108

Sunday’s= Personal Tax

Sometimes retired taxpayers will tell me that they are not withdrawing the funds from their RRSP because they do not want to pay tax on the money.

There are no other options.

When funds come out of an RRSP they will be taxed. The contributions were a deduction when they were made and they will be taxed when they come out. The only time funds are not taxed is when you die and you leave the funds to your spouse, however this only delays the tax until the death of your spouse.

When you look at the balance in your RRSP accounts it would be helpful to think of the amount as being half of what it is to allow for the payment of tax on the amount. Don’t kid yourself by thinking that all the money there is yours, a good chunk of it belongs to the government.

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