Canadian Investment & Retirement Roadmap

Question 01/08

A 62-year-old individual currently earns $35,000 and has $40,000 in an RRSP. They plan to retire at 65 and qualify for the maximum GIS. Why might they choose to withdraw and "melt down" their entire RRSP balance before they turn 65?

To avoid the 50% GIS clawback that would occur if they withdrew the money after age 65 Because RRSP withdrawals are illegal after age 65 for low-income earners Because they can't get GIS if they have balance in their RRSP account To ensure they don't have to pay any income tax while they are still working