How to avoid tax-payment nightmares when RRIF withdrawals start Sep 29th

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One thing salaried employees take for granted is the automatic deduction of taxes “at source.” They receive their regular paycheque with “net” or after-tax deposits that go directly into their bank accounts. The consolation is that come tax time there should be no unpleasant surprises in the form of hefty tax bills.
But the situation can be quite different once you’re retired. New retirees are often dismayed when they learn they may have to come up with extra tax payments. RRIFs (Registered Retirement Income Funds) are famously taxable: Once you reach the end of your 71st year, you are required to take an ever-rising minimum percentage payment from your RRIF, and those payments (also referred to as withdrawals) are taxed like earned income or interest. Aaron Hector, a financial planner with Calgary-based Doherty & Bryant Financial Strategists, says there is no mandatory withholding tax on RRIFs, unlike the 10%, 20% or 30% tax that must be withheld at source on RRSP withdrawals (which rises with the amount withdrawn…

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