Actuarial Science 1021A/B Study Guide - Life Annuity, Life Insurance, Lump Sum
16 Oct 2014
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You may contribute to an rrsp up until december 31 of the year in which you turn 71 (used to be age 69). Must start withdrawing after this point from your rrsp. Rrsp money may be transferred to a retirement income plan at any time but latest it must be done is by the end of the year in which you turn 71. That is, by the end of the year in which you turn 71, you must convert your rrsp into one of the 4 options given below: (1) Lump sum cash payment would be fully taxable immediately. ^ not best option from tax point of view (20% with holding tax) The remaining 3 options allow you to electronically transfer your rrsp money, tax free, to another retirement income product: (2) Buy a life annuity specified monthly income which is guaranteed for life of individual monthly income is taxable income life annuities are only available from life insurance companies.
