Planit:Override Default Withdrawals

From Planipedia
Jump to: navigation, search


Withdrawal from Account

On the Pensions and Other Revenues you can create a forced withdrawal from your registered accounts. In the past our approach has always been to do withdrawals from the non-registered accounts first, leaving sheltered money
54releasenotes6.jpg
sheltered for as long as possible. Then the minimum withdraws would begin at age 72. However there are situations where you want to make withdrawals earlier from your registered capital. For example your client’s might have a window of opportunity to make withdrawals virtually tax fee due to having virtually no taxable income in certain years, such as if they retire at 50 and their CPP and OAS don’t start until later. In this situation you can not specify that you want to make a withdrawal of a particular amount in those years. See the example below where we have forced a $15,000 withdrawal from 2016 (age 55) to 2020 (Age 59). Now the client will benefit from getting some of their registered capital out at a very low tax cost.

54releasenotes7.jpg

This feature has another powerful benefit. If you have clients who have a significant amount of capital in their locked in registered accounts (LIF/LRIF etc.), you can now set up a structured withdrawal in order to force the money in those locked in accounts to last for the whole of the client’s life. Let’s look at an example:

Here I have a client with a significant amount of their registered capital in locked in accounts, $75,000. I have created a “Withdrawal from Account” record and called it “LIF Withdrawal”. Note I’ve set the amount to $5,000 indexed to inflation running to mortality. This will ensure that this $75,000 is not withdrawn using the “Use as Required” approach thus recognizing the limitations the client has when accessing the locked in capital. I used the Registered Payout Calculator to identify the amount of the withdrawal using a target withdrawal indexed to inflation.

54releasenotes8.jpg