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Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: powersuitrecall on March 27, 2017, 12:01:10 PM

Title: RRSP contribution room after RE (Canada)
Post by: powersuitrecall on March 27, 2017, 12:01:10 PM

When I pull the plug and RE in a couple of years, I will most likely opt to cash out my DB pension.  Part of this payment is taxable and some is not.  On the taxable portion, I will be granted 18% of this as future RRSP contribution room.  Since I never plan on receiving income from which to utilize this, is there anything useful one can do with it?

For example:
2019  - Retire at end of year
2020  - pension cashed, $100K taxable
2021  - RRSP contribution room is $18K
2020+ - zero income

It would be nice to use it some fashion - creative withdrawl / repayment?  Spousal RRSP?

Title: Re: RRSP contribution room after RE (Canada)
Post by: Al1961 on March 27, 2017, 02:59:17 PM

The taxable portion is not classified as "earned" income, therefore it does not create RRSP contribution room.

Title: Re: RRSP contribution room after RE (Canada)
Post by: powersuitrecall on March 28, 2017, 05:40:15 AM

Quote from: Al1961 on March 27, 2017, 02:59:17 PM

The taxable portion is not classified as "earned" income, therefore it does not create RRSP contribution room.

That makes sense,  Thanks.