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Tax Policy Comparison:
PERSONAL TAXATION #4
| Tax Policy Comparison: PERSONAL TAXATION #4 |
Conservative Party | Liberal Party |
|---|---|---|
| POLICY | Change the Mandatory Conversion of RRSPs to RRIFs to Age 73 From 71 | Reduce the Minimum RRIF Withdrawal Amount By 25% For 1 Year |
| DATE | March 26, 2025 | April 7, 2025 |
| URL | View Policy Video | View Policy |
| DESCRIPTION & COMMENT | Currently, paragraph 146(2)(b.4) of the Income Tax Act requires RRSPs to be converted to an RRIF no later than the end of the year in which the annuitant reaches 71 years of age. The Conservative Party is proposing to change this requirement to age 73 enabling seniors more flexibility in how they manage their retirement funds. |
The Liberals announced that they would “reduc[e] the minimum amount that must be withdrawn from a Registered Retirement Income Fund (RRIF) by 25% for one year.”
As mentioned in the March 26, 2025 Conservative announcement regarding RRIFs, currently, paragraph 146(2)(b.4) of the Income Tax Act requires RRSPs to be converted to a RRIF no later than the end of the year in which the annuitant reaches 71 years of age. Such conversion ensures that statutory minimum amounts – escalating as the annuitant gets older – must be withdrawn and thus becomes taxable upon such withdrawal. Accordingly, this announcement appears to enable the minimum amount to be temporarily reduced by 25% for annuitants for a 1 year period (presumably for 2025?). I find this announcement by the Liberals to be, once again, devoid of substance and a copycat announcement. However, instead of outright copying the Conservative announcement of March 26, 2025, the Liberals added their own twist. While the Conservative proposal is a permanent policy proposal, this proposal is a small temporary “carrot”. Shallow. |
Tax Policy Comparison:
PERSONAL TAXATION #4
Tax Policy Comparison: Personal Taxation #4
Conservative Party
Date:
March 26, 2025
Summary:
Change the Mandatory Conversion of RRSPs to RRIFs to Age 73 From 71
Description & Comment:
Currently, paragraph 146(2)(b.4) of the Income Tax Act requires RRSPs to be converted to a RRIF no later than the end of the year in which the annuitant reaches 71 years of age. The Conservative Party is proposing to change this requirement to age 73 enabling seniors more flexibility in how they manage their retirement funds.
View Policy Video
March 26, 2025
Summary:
Change the Mandatory Conversion of RRSPs to RRIFs to Age 73 From 71
Description & Comment:
Currently, paragraph 146(2)(b.4) of the Income Tax Act requires RRSPs to be converted to a RRIF no later than the end of the year in which the annuitant reaches 71 years of age. The Conservative Party is proposing to change this requirement to age 73 enabling seniors more flexibility in how they manage their retirement funds.
View Policy Video
Liberal Party
Date:
April 7, 2025
Summary:
Reduce the Minimum RRIF Withdrawal Amount By 25% For 1 Year
Description & Comment:
The Liberals announced that they would “reduc[e] the minimum amount that must be withdrawn from a Registered Retirement Income Fund (RRIF) by 25% for one year.”
As mentioned in the March 26, 2025 Conservative announcement regarding RRIFs, currently, paragraph 146(2)(b.4) of the Income Tax Act requires RRSPs to be converted to a RRIF no later than the end of the year in which the annuitant reaches 71 years of age. Such conversion ensures that statutory minimum amounts – escalating as the annuitant gets older – must be withdrawn and thus becomes taxable upon such withdrawal. Accordingly, this announcement appears to enable the minimum amount to be temporarily reduced by 25% for annuitants for a 1 year period (presumably for 2025?).
I find this announcement by the Liberals to be, once again, devoid of substance and a copycat announcement. However, instead of outright copying the Conservative announcement of March 26, 2025, the Liberals added their own twist. While the Conservative proposal is a permanent policy proposal, this proposal is a small temporary “carrot”. Shallow.
View Policy
April 7, 2025
Summary:
Reduce the Minimum RRIF Withdrawal Amount By 25% For 1 Year
Description & Comment:
The Liberals announced that they would “reduc[e] the minimum amount that must be withdrawn from a Registered Retirement Income Fund (RRIF) by 25% for one year.”
As mentioned in the March 26, 2025 Conservative announcement regarding RRIFs, currently, paragraph 146(2)(b.4) of the Income Tax Act requires RRSPs to be converted to a RRIF no later than the end of the year in which the annuitant reaches 71 years of age. Such conversion ensures that statutory minimum amounts – escalating as the annuitant gets older – must be withdrawn and thus becomes taxable upon such withdrawal. Accordingly, this announcement appears to enable the minimum amount to be temporarily reduced by 25% for annuitants for a 1 year period (presumably for 2025?).
I find this announcement by the Liberals to be, once again, devoid of substance and a copycat announcement. However, instead of outright copying the Conservative announcement of March 26, 2025, the Liberals added their own twist. While the Conservative proposal is a permanent policy proposal, this proposal is a small temporary “carrot”. Shallow.
View Policy