In this time of ” war ” to the coronavirus, I propose to Justin Trudeau give a better boost to seniors 71 years of age and more, which are required to be disbursed* their pension in full collapse stock market.
How ? By canceling completely for the year 2020 the obligation, to withdraw their fund (RRIF registered retirement income) a minimum sum of money.
Until now, the head of the federal government is simply a reduction of 25 % only the minimum amount that is required by the government to withdraw the RRIF for the year 2020.
It is clearly insufficient.
The squeeze-out (forced) of a sum of money from a RRIF condemns outright liquidate it at a loss, a portion of their savings portfolio for retirement, while equity investments continue to accuse major reversals compared to what they were worth at the end of last December.
And Justin Trudeau is himself very much aware, as the reduction of 25 % of the minimum amount that he has given to 71 years and older was based precisely on the collapse of the markets.
“This measure, said Mr. Trudeau, will increase the financial flexibility of the seniors worried about maybe having to liquidate the assets of their RRIF to satisfy the requirements on the minimum withdrawal. “
Worried, he says ? Rather, I would say, extremely worried !
It is important to know that the “minimum withdrawal” in question varies annually 5.28 % to 20 % of the value of the RRIF, depending on our age. The percentage of removal is growing from 71 years to finally cap at 20% annually when you cross the plateau of 95 years.
By removing this requirement to minimum withdrawal amount for the current year, 2020, this will give to the holders of RRIFS, the opportunity to “sit down” on their investment portfolio, while wishing that he recovers next year.
Other schemes referred to
Like the 25% reduction in the required minimum RRIF withdrawal, Mr. Trudeau proposed also to apply a similar reduction to variable benefits that retirees are earning under pension plans to defined contribution plans and pooled registered pension plans.
Being largely dependent on their investments in the Stock market, these pension schemes have been hit hard by the recent plunge in world stock market.
Ottawa loses nothing
In this dramatic period when the Trudeau government funds 75 % of the salaries of employees of the business and pays the emergency benefits of $ 2000 per month to people put off because of the coronavirus, it seems reasonable to me to cancel it completely by 2020 the requirement to make minimum withdrawal for RRIFS, life income funds and other pension plans vary at the discretion of the Exchange.
To the extent that the governments will not lose a cenne tax, since it is only a postponement.
* From our 71 years, we are forced to “close” our RRSP by withdrawing the funds (fully taxable), or by purchasing an annuity spread over x years, or by transferring them to a RRIF.