21 November 2020 Posted By : The Canadian Press

Cost to end RRIF withdrawal rule is $1B, PBO says

OTTAWA — A new review by Parliament's spending watchdog says waiving mandatory withdrawal amounts from seniors' retirement savings would cost federal coffers about $1 billion annually.

Each year, seniors with registered retirement income funds have to withdraw a minimum amount from their savings, which is considered taxable income.

The Liberals shifted the marker this year, dropping the minimum for each senior by 25 per cent to ease concerns raised by the effect of the COVID-19 pandemic.

That let those who could afford it leave more money in their tax-sheltered investments, hoping to recoup losses from the pounding the pandemic delivered to the markets.

The parliamentary budget office says cutting the minimum withdrawal all the way to zero would end up costing the federal treasury $940 million next year, rising each year until hitting just over $1 billion in 2025.

Seniors groups had pressed the Liberals earlier this year to waive the minimum withdrawal limit owing to the effect COVID-19 was having on financial markets and retirement savings.

At the time, Seniors Minister Deb Schulte said the government would watch financial markets before making any decisions, since most seniors don’t need to make RRIF withdrawals until the end of the year.

On Thursday, her office said the Liberals would continue to work with lower levels of government to ensure seniors have the supports they need during COVID-19.

Figures the PBO provided for the most recent year available, 2018, show that nearly 2.1 million taxpayers had registered retirement income funds, with an average amount of $114,019.

The average withdrawal that year was $10,645, and 41 per cent of fund holders withdrew above the minimum limit, which is designed to make sure the money is used to fund retirement years.

views : 45 | images : 1 | Bookmark and Share


Enter your comment below



Leave a Reply

TORONTO BOOK PUBLISHING

Most Popular

HealthEight months into the pandemic, this women’s health clinic in rural Texas struggles to meet demand for care

BROWNWOOD — Women come from more than one hundred miles away to Building 35 in a red brick publi [...]

01 December 2020

HealthEating dried fruit linked to better overall diet and health

Low consumption of fruit in the United States and other countries is a major contributor to di [...]

01 December 2020

HealthMinisters urged to end delay on law curbing restraint on mental health patients

Ministers are being urged to finally implement legislation restricting the use of dangerous restra [...]

01 December 2020

GamingCanada's Quebec to investigate casinos for possible money laundering

OTTAWA — The Canadian province of Quebec will launch an independent audit to gather information [...]

02 December 2020

HealthA framework for mental health and psychosocial support in radiological and nuclear emergencies

The health impact of radiological and nuclear emergencies can last for decades. Lessons learned fro [...]

01 December 2020