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How much to take out of your RRSP in your 60s
– moneysense.ca
Locked-in RRSPs, defined contributions (DC) pensions, and deferred profit sharing plans (DPSPs) all have the same rule requiring conversion at age 71.
The two big questions for a retiree prior to age 71 are: When should I start withdrawals? And how much should I take out each year?
If we take a simplistic approach to the RRSP drawdown, a sustainable withdrawal rate may be 2% to 5% of the account value. That is, between 2% and 5% of the starting account value may be withdrawn each year with subsequent withdrawals increased each year with inflation for life. There are many asterisks depending on age, life expectancy, investment risk tolerance, investment fees and other factors…
A. Great question, Barbara. Because your parents are the subscribers of the RESP—meaning they set up the account for you and made the contributions—the money is legally theirs until they pass it over to you, the beneficiary. But once the money is in your hands it is legally yours and you don’t have to pay it back to them.
There are, however, a few other things you and your parents should keep in mind about your RESP funds, especially given your plan to pause your studies.
As you may recall, during the first semester of your first year of university, you were allowed to draw a maximum of $5,000 in Educational Assistance Payments (EAP), which includes the government grants paid into the RESP and any interest or investment growth on the RESP savings…