What is the tax rate when I withdraw some of my RRSP money? I know there is an amount taken off right away but what is the rate payable at tax time?

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I want to cash in some rrsp's. can i just transfer the money from my rrsp account to savings account or do i have to get it signed off or something. do i have to report on next years taxes? will the bank send me a notification for that next year? i also have to make home buyer plan repayments into my rrsp account each year. how will this be affected? can i just take out that much more and put it right back in to get the credit?

When you cash out RRSPs the organization holding them for you take off tax, either 10% or 30% depending on how much you withdraw, and gives you the rest. Next spring they send a T4RSP showing the total withdrawal and tax deducted at source. You report it on your return as income. The mechanics of making the withdrawal will be between you and the bank. I'd imagine you have to make a specific request to them. For the HBP thing, any contributions you make to your own RRSP can be designated as your HBP repayment. If you don't do that, then you just show the minimum HBP repayment amount as income and pay tax on it.

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If i'm filing for bankruptcy, what will happen if i cash in an rrsp and rat hole the money away? i've been searching around, and i talked to someone who went through with it, and they said their lawyer told them to clear all their bank accounts of any cash and put it away. this person also went and ran up their credit cards on the eve of bankruptcy, because, "hey, my credit's gonna be shit for 7 years anyway." i'm just curious, and i don't want alot of negative, judgemental answers, either.

I've heard that they will notice that you ran up credit cards before filling bankruptcy. Your friend is not the first person to think of this - you will get caught...

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I am in the process of settling my divorce. i have just recently purchased a house and now have a fairly substantial mortgage. i am hoping to retire in 5 years. the money that i was hoping to get from the settlement is a little less than i was hoping for but figured i could swing it anyways. however , i have just now been informed that i will not be getting cash (as i had hoped) but will be getting my ex's rrsp investments transferred over to me. therefore, unless i want to be taxed at 43% of 160,000$ this year for income tax i cannot withdraw the money and pay off my mortgage. whatever i withdraw is apparently added to my income and i have to pay taxes on the whole thing. so...what would be the best way to pay off my mortgage in a reasonable time frame so i am not being taxed to the hilt and not having to eventually be living from pension cheque to pension cheque each month, paying off a mortgage, bills, food, etc, for the rest of my life and not knowing where the next $ will be

Withdrawing the money to pay down the mortgage may be a bad idea even if the tax man were not lurking in the shadows -- mortgage money is cheap, and the RRSP investment may have a higher yield than the mortgage interest rate. So, leave the mortgage in place and draw, if you must, on the RRSP at the smallest rate that you can manage.

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Is it better to take investments out and pay as much off as possible (100% in this case), or is it still worth taking a mortgage as the interests rates are still so low? is it worth taking money out of my rrsp? thanks!

While I frankly love 100% down payments, you have to consider a number of factors and I would not rob retirement accounts. The mortgage tax deduction is al illusion for many people because the standard deductions for quite a few are greater than if they itemize. While it sounds good to borrow at 6% and invest earning more when the tax bit is removed the actually interest rate of return needed to make this pay is too high and while stocks have returned such in recent years this is unlikely to return in your lifetime. Remember than every year of a mortgage paid off is absolutely saved interest or earned interest if you will and it is completely tax deferred and may be tax free with exemptions on home sales. In the end i would lean heavily to paying off a mortgage over investments that may or may not pan out plus there is no volatility in the amount saved each year and at worst delayed tax burdens.

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I am wondering if anyone has an idea or websites that i can look into about this. i have been left a $10000 rrsp in my mother's will. she left it for debt repayment or to keep. if i was to cash this out, how much taxes would i have to pay? and does that come right off the money or would i have to pay it come tax time? also is the amount of tax based on my income/family income? i'm not certain if i am going to cash it, or keep it and let it grow yet but i'm curious. thanks for any advice!

The $10,000 would be added to and taxed on your mother's final return. The amount would not be taxable to you but it would be an after tax amount. Any future earnings or gains on the money would then become your liability

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I need some serious advise as to how to invest this money. i already have rrsp savings, we are home owner (still paying a mortgage). what suggestions and how should i invest so that we can continue to live and enjoy life. i am interested in short term investments where i can get my money at short notice. i have suggested to invest in another house and become landlord. he is saying put it in the bank and work with the small intrest given. *we live in canada*

Use it as a deposit for another house to rent out, or put the money into your current mortgage. They're the best options, in my opinion atleast.

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Automatic withdrawals into a separate account? living on cash with no debit or credit? carrying a balance in your bank account? high interest savings? other types of savings bonds (ie gic and rrsp in canada)? just curious how everyone else does it as i'm terrible with money.

I have my direct deposit split between my savings and checking account. I keep ~1 paycheck buffer in my checking account just in case a bill is due the day before the next payday; it doesn't earn interest, but saves me overdraft fees. I will not touch the savings account unless it's an absolute emergency. Once I had several month's expenses saved, I opened a high interest savings at a credit union to start saving for another car. I've been depositing my estimated monthly car loan payment there for over a year so that I'll have a large downpayment and avoid some interest charges on the loan. I use my debit and credit card, but carry cash anytime I'm going out with friends so I don't overspend. Check out mint.com; it's a free budgeting tool that tracks transactions from your online accounts. It's an easy way to monitor spending, budget, savings goals, etc.

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I've been an executive assistant with the company for 11 years. last year i was given a very big promotion which i didn't really want but accepted it for the experience. it has been challenging but is very stressful, 24/7 (yep .. i work a lot of evenings and weekends). how do i start to get out? what should i do first ? should i talk to my boss? look for a new position in another company? cash in rrsps? my financial situation will no doubt change so i will have lots of re-arranging to do and i am afraid of that. yet i don't like to be working solely for money. i don't mind hard work but this work environment is not at all fulfilling. it's making me ill. i'm thinking of cashing in some rrsp's to give me a cushion while i am looking around. i am close to retirement age and don't have alot of money and thought i could work an extra few years but the stress is too much and it doesn't look like it's going to ease up.

Dont' do anything withour careful planning. GO over your current finances and spending habits. Determine what you can live with giving up, or some places where you can cut back. Next talk to your boss if you can. Talk about your current work load, and how you are feeling. Maybe he/she doesn't even know that you are overwhelmed. Perhaps you can simply cut back your workload without having to change everything. If not, talk to him/her to see if you can go back to your former position. Obviously you were good at it if you got promoted. If you prefer to work in a different company... try not to quit your current job b4 finding a new one. Number one in life is your health and happiness. You could die tomorrow with millions of dollars but be miserable!! Live life to be happy. And if you are "burning you candle" too fast, you are bound to be sick, less productive at work, and generally unhappy.

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I received a letter that came from the government saying i owed $600 for an rrsp that i supposedly cashed in during 2008. they say that i owe this money based on the 2009 tax year. i haven't owned an rrsp for over 5 years nor have i cashed anything in since that time. i don't own rrsps currently. my old rrsp didn't get anywhere close to the tune of $2700 as the statement said. has anyone else had this happen? is this a scam? i have talked to my bank and they have no record of this. because it is the government i feel as if there is nothing i can do and i can't afford to pay this! what can i do?

First, you file a notice of objection, explain that as far as you know, you did not cash in an RRSP, and any T4RSP issued to you must have been in error. It sounds like either you cashed in an RRSP and don't remember it, or a T4RSP was issued with your social insurance number in error, or something else weird happened. You should also ask (separately) for a copy of the slip. It will say who issued it. You can follow up with the issuer to determine if it was issued in error. If they did pay the money to you, they should be able to show proof of the payment. If they didn't pay it to you, then they'll have to deal with that. To ask for a copy of the information slip phone the general inquiries number and tell them what you want. Here's info on filing a notice of objection: http://www.cra-arc.gc.ca/gncy/prgrms_srvcs/dsgr/ncm_tx-eng.html Don't worry too much about where it says "In all cases, you have to provide the reasons for the formal dispute as well as all the relevant facts and documentation." Just give as much information as you can. Definitely include your name, the tax year(s) involved, and a copy of each notice of assessment. The people who deal with notices of objection will contact you if they don't understand or need more information.