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RRIF minimum withdrawals cut by 25% for 2020

Here’s what you need to know.

As part of the federal government’s Covid-19 Economic Response Plan, the minimum amount that must be withdrawn from Registered Retirement Income Funds (RRIFs) is reduced by 25% for 2020.

This change:

  • Came into effect on March 25, 2020

  • Applies only for 2020

  • Also applies to Life Income Funds and other locked-in RRIFs


How is the minimum withdrawal amount calculated?

To determine the amount of your minimum withdrawal for this year, you need two numbers: your age at the beginning of this year and the market value of your RRIF on December 31, 2019.

Let’s say you were 71 and had $1,000,000 in your RRIF. Looking at the table at the end of this article, the calculation is 5.28% X $1,000,000.

  • So, your minimum withdrawal amount would normally be $52,800.

  • With the 25% reduction, your new minimum withdrawal amount for 2020 would be $39,600.

Of course, you can always withdraw more than that if you need. Your financial advisor will help you determine what the appropriate amount would be for you.

What if I’ve already taken this year’s withdrawal? Can I put money back in?

No, if you’ve already withdrawn more than the reduced 2020 minimum amount, the federal government has said that you won’t be allowed to re-contribute the extra amount.

How will I be taxed?

Withdrawals from a RRIF are taxed as income. That doesn’t change. Also, there is no tax withheld when the minimum amount is withdrawn from a RRIF – and that’s the regular withdrawal amount, not the reduced amount.


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