CRA Takes 54% Of Your RRSP When You Die (Unless You Do This)
How a $1 million RRSP can create a $500,000+ tax bill at death – and the little-known planning strategy that may help families keep far more of their wealth.
Show Notes
Most Canadians think the tax bill on their RRSP comes when they retire.
For many families, the biggest tax bill comes when they die.
A $1 million RRSP can trigger hundreds of thousands of dollars in tax on a final return – often at rates higher than what many people paid during their working years.
But there is a little-known provision in the tax rules that can dramatically reduce that tax for families with dependent minor children or grandchildren.
In This Solo, We Cover:
• Why the "lower tax bracket in retirement" assumption often fails
• How a $1M RRSP can create a tax bill of more than $500,000 at death
• Why RRIF withdrawals can trigger OAS clawbacks and higher effective tax rates
• The strategy that can reduce a $540,000 tax bill to roughly $150,000
• How dependent children and grandchildren can qualify for special RRSP treatment
• Why beneficiary designations and will planning matter more than most people realize
• The critical deadlines that can make or break the strategy
Retirement planning isn't just about growing your RRSP.
It's about understanding what happens when the money eventually comes out – and what happens if it doesn't.
Many families only discover these rules after it's too late to do anything about them.
If you have a large RRSP, minor children or grandchildren, or aging parents with registered accounts, this is a conversation worth having now – not after a death in the family.
📥 Resources from this episode
The RRSP Escape Plan
The Advisors TableThe RRSP Escape Plan
Estimate how much of your RRSP could be lost to tax at death – and compare strategies that may help preserve more wealth for your family and heirs.
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The RRSP Trap: Why CRA Takes 54% Of Your RRSP When You Die (And How To Stop It)
A $1 million RRSP can trigger a $540,000 tax bill at death. Learn the little-known strategy that can legally reduce that tax burden and preserve more wealth for your family.
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