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RRIF problems when smoothing

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Your client has a large RRSP, and doesn't need the ATI/lifestyle that the program amortizes at. Instead, he smooths at a lower amount.

Result..... his RRIF starts to spit out more and more capital and forces it into an ever-growing nonreg pot. As the nonreg grows, tax increases to an unacceptable level by the later part of the plan.

How can you have the excess capital moved rather than to nonreg, instead moved to an equity (tax deferred) status?

This is not too hard....

First of all, examine the results of the run as described above and take note of the amount of the nonreg deposit at age 71. This is the first big RRIF minimum dump. Let's say it was $21,011 for argument's sake.

What we are going to do is create a DCG account with an 'annual cg investment amount' of $20,000, an 'annual cg investment starts' at age 71, an 'investment stops' at age 90 and the 2 'capitalize at' ages set to 95/95. (adjust these last 3 numbers if your runout age is different)

Now, smooth at the same level as before and examine the Capital graph. What was brown (nonreg) is now mostly purple (equity) and the tax and estate will look much better than before.

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