What’s involved with an owner withdrawal of cash from a corporation + MORE Dec 7th

I am a widower, turning 71 before the end of the year. I have annual gross income of about $50,000, cash savings of about $500,000 left from the sale of my principal residence and an RRSP of about $1.5 million returning about 8%. I haven’t put anything into my RRSP for about 15 years. I also have a fully paid vacation property valued at $300,000. I am concerned that I will have to collapse some of my very productive investments to cover the government withdrawal rate of 5.28%.

Can I put some of the bank cash into an RRSP now and/or later? I would like to get an annual tax benefit from that deposit, and I’d also want the annual government withdrawals to be paid back to me from that cash (as long as it’s held in a cash position within the RRSP).

As an aside, can I also gift my daughter funds to help her out without her being exposed to any tax from the gift? My health is good but I do think I have enough to take care of myself. I just want to do the best for everything my wife and I worked so hard to save…

I work as a self-employed IT contractor. I am incorporated. Over the years I have accumulated about $100,000 in my business account, over and above what I need to carry operating expenses. I am about five years out of retirement, maybe less than that if I go for a semi-retired approach. I would like to know the best strategy for withdrawing the money from my business.

I am aware I can pay myself a dividend, but I thought a business had to have earnings in order to declare a dividend. Is that the case? As I am a one-person operation, am I even allowed to declare dividends anymore? I heard the tax laws changed recently.

–Linda

Linda, you have a corporation and $100,000 of cash you have saved. A common mistake by business owners is thinking they cannot invest this money. A corporation can buy guaranteed investment certificates, stocks, bonds, mutual funds, and exchange traded funds. It can work with an investment advisor or open a self-directed brokerage account. A corporation can even buy a rental property or invest in another business…