Comments on: Cash Out Your RRSP And Pay Down Debt? http://blog.taxresource.ca/cash-out-your-rrsp-and-pay-down-debt/ Canadian Tax Help & Financial Planning Resources Sun, 12 Feb 2012 02:53:18 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Jim Kirkhttp://blog.taxresource.ca/cash-out-your-rrsp-and-pay-down-debt/comment-page-5/#comment-10665 Jim Kirk Mon, 06 Feb 2012 18:46:32 +0000 http://blog.taxresource.ca/?p=2625#comment-10665 So if I have an RRSP from a previous employer and can cash it out at 20%, I get 80% right away and then pay more tax on that for next year. You're suggesting to transfer it to another RRSP instead? When can you start to cash out RRSPs with less taxes? So if I have an RRSP from a previous employer and can cash it out at 20%, I get 80% right away and then pay more tax on that for next year.
You’re suggesting to transfer it to another RRSP instead?
When can you start to cash out RRSPs with less taxes?

]]> By: Tax Guyhttp://blog.taxresource.ca/cash-out-your-rrsp-and-pay-down-debt/comment-page-4/#comment-10646 Tax Guy Wed, 01 Feb 2012 21:10:23 +0000 http://blog.taxresource.ca/?p=2625#comment-10646 If you withdraw and contribute at the same marginal tax rate the effect is neutral. I suppose the strategy may work if you expect your income to taxed higher in the near future.You also need to be mindful that income earned in the meantime is fully taxable. If you withdraw and contribute at the same marginal tax rate the effect is neutral. I suppose the strategy may work if you expect your income to taxed higher in the near future.

You also need to be mindful that income earned in the meantime is fully taxable.

]]> By: Erniehttp://blog.taxresource.ca/cash-out-your-rrsp-and-pay-down-debt/comment-page-4/#comment-10643 Ernie Wed, 01 Feb 2012 00:54:17 +0000 http://blog.taxresource.ca/?p=2625#comment-10643 Tax Guy:Can I offset the tax effects on an early RRSP withrawal by contributing to my RRSP later?I know I will loose RRSP contributing room but I think I can lower my taxable income and offset the early RRSP withrawal effect...Am I correct?Thanks...! Tax Guy:

Can I offset the tax effects on an early RRSP withrawal by contributing to my RRSP later?

I know I will loose RRSP contributing room but I think I can lower my taxable income and offset the early RRSP withrawal effect…

Am I correct?

Thanks…!

]]> By: Tax Guyhttp://blog.taxresource.ca/cash-out-your-rrsp-and-pay-down-debt/comment-page-4/#comment-10639 Tax Guy Tue, 31 Jan 2012 18:50:23 +0000 http://blog.taxresource.ca/?p=2625#comment-10639 To follow up, please undestand that I cannot comment or provide estimates of your tax returns. To follow up, please undestand that I cannot comment or provide estimates of your tax returns.

]]> By: Tax Guyhttp://blog.taxresource.ca/cash-out-your-rrsp-and-pay-down-debt/comment-page-4/#comment-10638 Tax Guy Tue, 31 Jan 2012 18:49:30 +0000 http://blog.taxresource.ca/?p=2625#comment-10638 Michelle, Hard to say without knowing how much income you earned, taxes you paid, age, deductions etc. Michelle,
Hard to say without knowing how much income you earned, taxes you paid, age, deductions etc.

]]> By: michellehttp://blog.taxresource.ca/cash-out-your-rrsp-and-pay-down-debt/comment-page-4/#comment-10632 michelle Sun, 29 Jan 2012 17:37:42 +0000 http://blog.taxresource.ca/?p=2625#comment-10632 Hi Last year I cashed out the allowable cash portion of my pension and payed approx. $5000 in taxes.So I was wondering how much of it will I get back in income tax this year? I live in BCThanks Hi
Last year I cashed out the allowable cash portion of my pension and payed approx. $5000 in taxes.So I was wondering how much of it will I get back in income tax this year? I live in BC

Thanks

]]> By: Pamela Joycehttp://blog.taxresource.ca/cash-out-your-rrsp-and-pay-down-debt/comment-page-4/#comment-10590 Pamela Joyce Fri, 20 Jan 2012 15:31:50 +0000 http://blog.taxresource.ca/?p=2625#comment-10590 Hello, I have a quick que. I have about $10,000 sitting in an RRSP that I had contributed to when I was younger. I know have a stable job with a good pension and with a young family and some low interest rate debt (line of credit) I am having a hard time justifying having it sit in an RRSP that keeps showing a -ve rate of return on statements (yes I know you are supposed to ride the market for the long haul but my confidence in the whole idea of RRSPs is failing). Our family pension when we are both retired will be about $90,000...so again I am not sure why I need this RRSP that is performing dismal when I could pay off debt that wee currently have. Thanks for your help Hello,
I have a quick que. I have about $10,000 sitting in an RRSP that I had contributed to when I was younger. I know have a stable job with a good pension and with a young family and some low interest rate debt (line of credit) I am having a hard time justifying having it sit in an RRSP that keeps showing a -ve rate of return on statements (yes I know you are supposed to ride the market for the long haul but my confidence in the whole idea of RRSPs is failing). Our family pension when we are both retired will be about $90,000…so again I am not sure why I need this RRSP that is performing dismal when I could pay off debt that wee currently have.
Thanks for your help

]]> By: Tax Guyhttp://blog.taxresource.ca/cash-out-your-rrsp-and-pay-down-debt/comment-page-4/#comment-10470 Tax Guy Tue, 05 Apr 2011 14:44:07 +0000 http://blog.taxresource.ca/?p=2625#comment-10470 Unfortunately, I cannot make recommendations nor provide opinions. I'm only explaining how things work. If you would like to engage me, that's an entirely different matter and I will provide an opinion and recommendation. But only after I gather a fair bit of data from you. Unfortunately, I cannot make recommendations nor provide opinions. I’m only explaining how things work. If you would like to engage me, that’s an entirely different matter and I will provide an opinion and recommendation. But only after I gather a fair bit of data from you.

]]> By: Jacksonhttp://blog.taxresource.ca/cash-out-your-rrsp-and-pay-down-debt/comment-page-4/#comment-10467 Jackson Tue, 05 Apr 2011 02:03:10 +0000 http://blog.taxresource.ca/?p=2625#comment-10467 Hey Thanks very much! I take it you're in favour of just taking the tax hit and putting the money to use down here. If not and you think it would be worthwhile to leave it invested in Canada let me know!Also, I need to disclose that I have a TFSA even though it's only got $425 in it? I think Bank's down here only give you a tax form if you make $10 or more in interest throughout the year. My TFSA hasn't come near that.. but is it just a totally different deal and I *must* disclose it? Will any of this matter if I spend the money that's in it while on vacation?Thanks again! Hey Thanks very much! I take it you’re in favour of just taking the tax hit and putting the money to use down here. If not and you think it would be worthwhile to leave it invested in Canada let me know!

Also, I need to disclose that I have a TFSA even though it’s only got $425 in it? I think Bank’s down here only give you a tax form if you make $10 or more in interest throughout the year. My TFSA hasn’t come near that.. but is it just a totally different deal and I *must* disclose it? Will any of this matter if I spend the money that’s in it while on vacation?

Thanks again!

]]> By: Tax Guyhttp://blog.taxresource.ca/cash-out-your-rrsp-and-pay-down-debt/comment-page-4/#comment-10437 Tax Guy Wed, 30 Mar 2011 20:32:14 +0000 http://blog.taxresource.ca/?p=2625#comment-10437 The contribution is deducted from your income dollar-for-dollar and the withdrawal is added to your income-dollar-for-dollar. The nature of the investment income (dividends, capital gains etc. is irrelevant).If you contribute $5,000 today to an RRSP you deduct $5,000 from income. If the $5,000 grows to a market value of $10,000 and you withdraw the entire amount, you include $10,000 in taxable income.I hope this helps. The contribution is deducted from your income dollar-for-dollar and the withdrawal is added to your income-dollar-for-dollar. The nature of the investment income (dividends, capital gains etc. is irrelevant).

If you contribute $5,000 today to an RRSP you deduct $5,000 from income. If the $5,000 grows to a market value of $10,000 and you withdraw the entire amount, you include $10,000 in taxable income.

I hope this helps.

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