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.
Same $1M RRSP, $390,000 Difference
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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