In the event that you live to 99 and 100, the tax and probate for the real estate will drop to 3% to 4%, with a larger TFSA and a smaller RRIF. Extracting an additional $45,000 and $70,000 in taxes from the RRIF results in a reduction in the final tax rate, but is also a smaller real estate.
The attractiveness of a small amount of work is enough to drain RRIF from 90 years old. There is no difference from the 3% backhaul scenario, but the 7% case has a $31,000 advantage.
At 99 and 100 cases, the 3% return solution still has no difference, but it is interesting that when life expectancy is longer, the 7% return solution now has a $65,000 disadvantage. If your wife reaches 100, it is best to stick to the least RRIF withdrawal.
For me, the more interesting result is at the age of 90 and 75. For example, if you both live in ages 90 and 91 and get a 5% return, your final property is worth about $2,172,000. If your wife passes for 75 and you continue to spend $120,000 per year, your final estate for 90 years is $695,000, which is about $1,477,000 than the cost of your and your wife dying from 90 and 91. It’s almost incredible.
what happened? !
It is not taxes that cut the value of the estate; it is the loss of CPP and OAS. Lifetime CPP and OAS fell $511,800, forcing you to draw more differences from your investment to make up for them, while reducing growing money and increasing tax exemptions.
When does it make sense to exhaust RRIF?
There is a clear advantage in drawing money from your RRIF when you know your wife can pass at 75. But, here’s a question: Do you plan to reduce your life expectancy or exceed your expected life expectancy? My advice is to plan for extended life expectancy and make a minimum RRIF withdrawal if this is what you need to enjoy a pleasant retirement. It might make sense if you’re coming up with terminal health issues in the near future, or if you’re in the 80s or late 90s, it might be worthwhile.
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