Sorry meant lower! Thanks for the clarification, so the retirement income tax is determined by how much you have saved in your RRSP BY AGE 71 and at the time you WITHDRAW it and the duration you plan to cash it out, that will determine your tax bracket?Archanfel wrote: ↑Actually, it's the other way around. You shouldn't use RRSP if your retirement income is higher.
You need to cash out your RRSP sooner or later. You are actually forced to cash them out after your 71st birthday.
Assume you save $5500 a year, at 6% return. Let's say you start at 20 and save for 45 years. You would have $1.24 million. Assume you cash it out over 10 years, that's $124K/year, so you will need to pay a lot of taxes on it. That's assuming you don't have other incomes. Knowing RFDers, most people would become slumlords by then.
So if I made like 70K annually now and by the time I retire, the cashed out RRSP amount that I take out annually is higher than my 70K income, then that's a no go