Silver and Gold Magazine Winter 2014-2015 | Page 22

RRIF withdrawal rates: What do you think?
In her November letter to Finance Minister Joe Oliver,
Oakville resident Olga Shewchun reaches out to change the
current RRIF withdrawal rates, which were established in
1992 – when seniors’ life expectancy was in their 70’s rather
than today’s expectancy in the 80’s and beyond.
“Generally speaking, today’s Seniors are in good health in
their 70’s and don’t need to access the savings in their RRIF.”
Writes Ms. Olga. “However, with age, comes deteriorating
health and increased monies are needed not only for greater
health care, but for performing tasks which are beyond their
physical capabilities such as shoveling snow, cutting grass,
etc. This results in a greater need to draw on their savings.
However, due to the large forced withdrawals which start at
age 72, and resulting increased income tax burden due to
these large withdrawals, monies have been depleted.”
Ms. Olga continues that when the current RRIF withdrawal
rates were established not only were seniors life span shorter,
but interest rates were considerably higher, at approximately
9%, compared to today’s rates of 2% or lower. This forced
withdrawal rate is increasing seniors’ income tax burden and

does not allow for them to replenish lost monies even if after
tax money is put into a TFSA.
“Perhaps when there was a deficit, the large forced
withdrawals could be rationalized, but now that there is a
surplus the government can afford to give seniors a break by
reducing the forced withdrawal rates or eliminating them
altogether.”
Ms. Olga adds that seniors should be able to have the freedom
to withdraw money as they need it, and the government will
continue to get their revenue on a tax deferred basis, and
that applying change to the “draconian high rate of RRIF
withdrawals would be a good start for seniors.”

Get involved
As the Federal Government works on their 2015 budget,
and since 2015 is an election year, Ms. Olga encourages all
seniors to get involved and contact their MP and voice their
opinon by writing a short letter.
“This is our best hope to affect change. There is much support
for change from many sources –ie: C.D. Howe Institute,

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