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New RRIF/LIF Minimums for 2020

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New RRIF/LIF Minimums for 2020

On March 18, 2020 a set of economic measures, as part of the Government of Canada’s Covid-19 Economic Response Plan, were announced. The statement included proposed changes to the calculation of the 2020 required minimum withdrawal for registered retirement income funds (RRIF/LIF) by 25% for 2020. For example, if your 2020 minimum RRIF payment is $10,000 and you choose to reduce the payment for this year, your new minimum payment will amount to $7,500.

WHAT YOU NEED TO KNOW
  • This change is optional, not mandatory and is only effective for your 2020 minimum payment.
  • If you choose to reduce your payment by 25% to the new minimum, the change will be applicable for the full 2020 calendar year.
  • You cannot request a variation of the new minimum payment (ie.10% or 15%). It must be reduced by the full 25%.
  • Those that have already withdrawn the 2020 minimum payment and exceeded the new minimum amount are not be permitted to re- contribute to their RRIF/LIF and cannot cancel or reduce a withdrawal that had been previously made.
  • For those that have chosen an ‘elected’ amount greater than the old minimum, do not have an advantage in applying the new minimum.

QUALIFICATION REQUIREMENTS

  • You have not yet made a withdrawal and wish to reduce the minimum withdrawal established on January 1, 2020 by 25%.
  • You have already taken payments (scheduled payments: monthly, quarterly, etc.) without exceeding the new minimum.
  • You have received less than the ‘old’ minimum amount but more than the new minimum amount.

Should you wish to reduce your RRIF minimum this year, please feel free to reach out. We’re happy to answer any questions you might have.

Best Regards,

Paul Rowan
President, Chief Executive Officer
Chairman of Investment Committee

RowanOak Private Wealth Counsel

Over the last 20 years, RowanOak Private Wealth Counsel has gained the reputation of an industry-leading innovator for its approach to wealth management. Considered a pioneer in providing the highest standards of proactive advice and planning, the RowanOak team places the interests of its clients first in all aspects of the practice.

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