Mistakes made by you and donot want other new desis to make
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Quote:I believe what he meant is that 100% of the money is taxed at your the then marginal tax rate.
Originally posted by Big Vee
There is nothing like 100% tax. 100% tax implies all of the money is taken by the govt.
Quote:Yes, that would appear to be so.
The problem with the scenario by investpro is that you pay taxes to get the funds out of RRSPs and then pay taxes when the investment grows outside the RRSP.BV
Why would anyone do that?
Isn't it better to only withdraw your living expenses from RRSP after retirement as you go?
i.e. if you need $25,000 every year after retirement, simply withdraw that much.
Assuming no other income, $25K a year will incur almost no tax.
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"Mah deah, there is much more money to be made in the destruction of civilization than in building it up."
-- Rhett Butler in "Gone with the Wind"
Posts: 1628
Location: carl sagan's universe
Posted on: 10-09-07 16:31:25
Location: carl sagan's universe
Posted on: 10-09-07 16:31:25
Quote:
Originally posted by pratickm
Quote:I believe what he meant is that 100% of the money is taxed at your the then marginal tax rate.
Originally posted by Big Vee
There is nothing like 100% tax. 100% tax implies all of the money is taken by the govt.
Quote:Yes, that would appear to be so.
The problem with the scenario by investpro is that you pay taxes to get the funds out of RRSPs and then pay taxes when the investment grows outside the RRSP.BV
Why would anyone do that?
Isn't it better to only withdraw your living expenses from RRSP after retirement as you go?
i.e. if you need $25,000 every year after retirement, simply withdraw that much.
Assuming no other income, $25K a year will incur almost no tax.
Hi PratickM,
Thank you for understanding my ill written point about 100% taxation.
Regarding your last point. Taking $25,000 out of your RRSP at retirement you will be taxed at your marginal rate on 100% of your withdrawal.
If however the $25,000 is taken out of a non registered a/c you will be charged on 50% of your capital gains, if invested in such a vehicle, leading to a lower tax bill.
To address Big Vee's concern regarding the tax you pay when switching from RRSP to a non-reg a/c, there is a financial technique whereby this is negated and at the same time builds up your nest egg in non-reg funds.
This financial technique is known as the draw-down(meltdown) of RRSP.
PM me if you need further info.
Quote:So when withdrawing from a registered account, it doesn't distinguish between capital gains, dividend, etc?
Originally posted by investpro
Regarding your last point. Taking $25,000 out of your RRSP at retirement you will be taxed at your marginal rate on 100% of your withdrawal.
If however the $25,000 is taken out of a non registered a/c you will be charged on 50% of your capital gains, if invested in such a vehicle, leading to a lower tax bill.
Everything is taxed at 100%?
Quote:Please post it here so that others can benefit too.
To address Big Vee's concern regarding the tax you pay when switching from RRSP to a non-reg a/c, there is a financial technique whereby this is negated and at the same time builds up your nest egg in non-reg funds.
This financial technique is known as the draw-down(meltdown) of RRSP.
PM me if you need further info.
I would like to know as well.
Thanks.
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"Mah deah, there is much more money to be made in the destruction of civilization than in building it up."
-- Rhett Butler in "Gone with the Wind"
Posts: 456
Location: Canada-Glorious and Free
Posted on: 10-09-07 20:37:38
Location: Canada-Glorious and Free
Posted on: 10-09-07 20:37:38
Quote:
Originally posted by pratickm
Please post it here so that others can benefit too.
I would like to know as well.
This is something new. I am all ears.
Although there is the caveat in this plan. That is, your non-RRSP investments have to be growth oriented. You cannot be in bonds, or blue-chip dividend investments. Not that that is a bad thing. You can always hold the balancing portfolio in an RRSP.
Quote:
Originally posted by pratickm
So when withdrawing from a registered account, it doesn't distinguish between capital gains, dividend, etc?
Everything is taxed at 100%?
Yes, 100% of your marginal rate.
BV
Quote:
Originally posted by tamilkuravan
16. I met a classmate of mine in Toronto and took him around town in TTC 3 years back. Since he was my friend, i put my hand on his neck in the TTC Subway train. I noticed that people were giving me funny looks and some of then went away from me. It was then i realised that we canot touch each other as we did in India. So it was a lesson.
TK
Lots of priceless experience learnt the hard way
I had the same experience in Ohio. Except that i was in your friend's place.
Being a old dost in india, he insisted on putting his hand around my shoulder besides giving a generously looong hug whenever we met.
hmm..that explains my unpopularity with the opposite sex in the office.
seenappa
