Retirement Savings with RRSPs
What does RRSP stand for?
Registered Retirement Savings Plan
What does RRIF stand for?
Registered Retirement Income Fund
What does TFSA stand for?
Tax Free Savings Account
What does LIRA stand for and what is it?
Locked in Retirement Account. It is for pension savings from a previous employer. Similar to RRSP but locked in.
Ava contributed $10,000 to her RRSP for 2023. Her income in that year was $100,000. What is her taxable income for 2023?
$90,000
At what age must you convert a RRSP to a RRIF?
By the end of the year you turn 71
Marnie has a TFSA with $25,000. She needs to take out $12,000 to cover an unexpected expense. What are the tax implications of this?
No tax implications, withdrawals are tax free!
You would like your plan in Navi to include a base inflation rate of 2.5%. Where would you enter this information?
Assumptions - General
The maximum contribution limit for 2023 into a RRSP is $30,780. Albert has completely maximized all previous room and wants to contribute the maximum for this year. He makes $200,000, how much can he contribute into his RRSP?
$30,780
How are RRIF withdrawals taxed?
They are included in income for the year. Fully taxed as income.
What is the cumulative TFSA limit for 2023 for someone who was 18 when they first came out in 2009?
$88,000
What is a persons most valuable asset?
John needs to take out $20,000 from his RRSP to cover an unexpected expense. What are the tax implications of this?
John would have 30% withheld for tax purposes ($6,000) so would net $14,000 into his account. The full $20,000 would be included in his income for the year and taxed at his marginal tax rate. He may owe more tax or may receive a refund if he overpaid.
What is the minimum annual withdrawal amount from a RRIF at the start of the year following your 71st birthday?
5.28%
Justin will turn 18 this year (2023) and is planning to open and contribute to a TFSA next year (2024). What is the maximum he will be able to contribute?
$13,500
Carla is looking to open up a RESP for her son Mikey who is 2. She has not yet opened or contributed to a RESP for Mikey. What is the maximum CESG she can receive for this year? How much would she need to contribute to receive this?
The maximum contribution limit for 2023 into a RRSP is $30,780. Daphne would like to fully maximize her RRSP this year. She has $12,000 in carry forward room, has not yet used her extra $2,000 over contribution and this year she made $135,000. How much can Daphne contribute to her RRSP?
$38,300
Sandra is 63 (December birthday). She has already converted her RRSP to a RRIF. The value of her account as of December 31st, 2022 was $279,000. The current value of her account is $275,000, she has not made any withdrawals yet this year. What is the minimum amount she must withdraw for 2023?
$10,333.33
Laura was born in 1997. She recently received an inheritance of $100,000. She has never opened a TFSA but would like to open one to invest this money. How much can she contribute to her TFSA in 2023?
$57,000
2015 (18) - $10,000
2016 - 2018 - $5,500
2019 - 2022 - $6,000
2023 - $6,500
Total = $57,000
Steve has a non-registered account invested in 100% US Equity. After completing an investment questionnaire you recommend he transfer investments to a diversified growth portfolio. The market value of his account is currently $175,000 and the book value is $120,000. Steve has a MTR of 30%, how much tax would he need to pay if he exchanged his investments?
$8,250
Capital Gain = $55,000
Taxable Capital Gain = $27,500
Taxable Capital Gain x MTR = $8,250