RRSP & RRIFs?

[Sandie5]

The rrsp calculators assume that we'll all live off the interest/dividends of our RRSP accounts when we retire leaving the principle untouched. Does that mean most of us will leave a big chunk of change (That million bucks we're told to have) to our cat and his caretakers?

Or is the RRIF the beginning of taking a bite out of the principle as well as the interest? It would be a shame to to leave a huge amount of money behind.

[mcewen]

My planning software asks how much capital the client wishes to have to leave to heirs upon death. Generally I plan till age 90.

in my experience, RSP assets usually start to decline after 3-6 years of retirement, depending on asset level and income requirements.

and yes, a RRIF will move your assets outside your tax shelter by the time you are 91. There are minimums you must withdraw that are based on your age. But just because you take it out doesn't mean you need to spend it... you can re-invest it outside your RRIF. Assuming you live beyond 91, you have moved all your assets outside the RRIF and paid tax on it based on your yearly MTR.