Your
RRSP must be converted into an annuity or Registered Retirement Income Fund (RRIF) no later than the end of the year in which you turn 69 or else it will be fully taxable as your income in the following year. Our RRIFs are available to
all attendees of Canadian MB churches.
What is an RRIF?
An RRIF is a non-annuity investment vehicle for
RRSP savings.
What does an RRIF do?
- uses accumulated RRSP savings to provide a retirment income flow
- money not required for income continues to be invested
Why choose a Canadian conference RRIF?
- no administration fees
- to invest retirement money for ministry until you need it
- for inflation protection through semi-annually adjusted interest rates
- for flexible income flow to meet changing needs
- funds are tranferrable to other carriers at any time without charges
How will my money be invested?
- in mortgages and properties owned by Canadian MB churches and church institutions to empower them for greater ministry
- in bank- or government-related securities or deposit accounts to provide payout funds
How many RRIFs can I have?
There is not limit to the number of RRIFs you can set up.
What will my RRIF earn?
- You will earn a fixed rate of interest, adjusted January 1 and July 1 each year. Earned income is compounded and paid into the fund semi-annually.
- The current rate is 3.25%, effective until June 30, 2012.
How much can I take from my RRIF?
- You must take a minumum amount in each year following the calendar year in which you open the RRIF. This amount is set by a minimum percentage table.
- You may take larger, regular amounts or additional lump sums if you wish. This will exhaust the RRIF more quickly.
- Regular payments are usually made annually except in the case of large sums.
- You can use your RRIF to buy an annuity whenever you wish.
What about income tax?
- All payments from your RRIF are taxable income.
- If you are more than 65 years old, RRIF payments qualify for the $2000 pension income tax credit.
- If you are a Canadian resident and only draw the minimum RRIF amount, no income tax will be withheld at source.
What happens to my RRIF at my death?
- Your RRIF will be transferred to your beneficiary.
- If your beneficiary is your spouse, he/she will pay tax on the money as it is withdrawn.
- If the beneficiary is not your spouse, in most cases the entire value as at death is taxed as if you had received it just before death.
Who is the RRIF trustee?
A government-approved trust company in conjunction with the Canadian conference office handle the administration of the program and send out your payment and transaction statements.
How are investments protected?
- Loans are secured through property mortgages.
- Lending is limited to borrowers affiliated with the Canadian Conference of MB Churches.
- The national nature of the program reduces the impact of regional conditions.
- Loans are approved by a special committee of the Canadian Board of Management.
Example of a minimum withdrawal RRIF
Assumptions:
- $50,000 RRIF, purchased on December 1 in year taxpayer turns 69
- Earnings: 6% compounded annually
- Withdrawals are made December 31, beginning one year after purchase.
|
Age
Jan. 1
|
Fund value
Jan. 1
|
Minimum %
withdrawal
|
Minimum
withdrawal
|
| 70 |
$50,000 |
5.00 |
$2,500 |
| 71 |
50,500 |
7.38 |
3,726 |
| 72 |
49,803 |
7.48 |
3,725 |
| 73 |
49,066 |
7.59 |
3,724 |
| 74 |
48,285 |
7.71 |
3,722 |
| 75 |
47,460 |
7.85 |
3,725 |
| 76 |
46,582 |
7.99 |
3,721 |
| 77 |
45,655 |
8.15 |
3,720 |
| 78 |
44,673 |
8.33 |
3,721 |
| 79 |
43,632 |
8.53 |
3,721 |
| 80 |
42,528 |
8.75 |
3,721 |
| 81 |
41,359 |
8.99 |
3,718 |
| 82 |
40,122 |
9.27 |
3,719 |
| 83 |
38,810 |
9.58 |
3,718 |
| 84 |
37,421 |
9.93 |
3,715 |
| 85 |
35,950 |
10.33 |
3,713 |
| 86 |
34,393 |
10.79 |
3,711 |
| 87 |
32,746 |
11.33 |
3,710 |
| 88 |
31,001 |
11.96 |
3,707 |
| 89 |
29,153 |
12.71 |
3,705 |
| 90 |
27,197 |
13.62 |
3,704 |
| 91 |
25,124 |
14.73 |
3,700 |
| 92 |
22,931 |
16.12 |
3,696 |
| 93 |
20,610 |
17.92 |
3,693 |
| 94 |
18,153 |
20.00 |
3,630 |
| 95 |
15,612 |
20.00 |
3,122 |
| |
Total Withdrawn |
94,699 |
The Canadian Conference of MB Churches will accepts RRSPs currently with other carriers at any time.
Related Forms
The Canadian Conference of Mennonite Brethren Churches is a charitable organization, not a financial institution.
Conference RRSPs and RRIFs are not government guaranteed or insured by the Canadian Deposit Insurance Corporation.
This web page is for general information only and is not intended to provide legal or tax advice.
Uses accumulated RRSP savings to provide an income flow. Money not required for income continues to be invested in MB ministries. The fund earns a fixed rate of interest, adjusted twice a year. You may adjust the size of the annual payments, or receive additional lump sum payments. There are no administration fees, and the fund is transferrable without charge to another carrier.
