“Why does the withholding tax on RRIF withdrawals get higher as I get older?”
Submitted by: Sophia G.
The withholding tax on Registered Retirement Income Fund (RRIF) withdrawals is not based on age, but rather on the amount withdrawn in excess of the minimum annual withdrawal amount. For withdrawals up to $5,000 a 10% withholding tax rate applies, between $5,000 and $15,000 the rate is 20%, and for withdrawals more than $15,000, a 30% rate applies. Withholding rates are different for residents of Quebec.
Even though withholding tax is deducted from withdrawals that exceed the minimum amount, you may still owe more tax later when you file your tax return. It depends on your total income and tax situation. Learn more about making withdrawals from your RRIF.
Speak to your financial institution if you have questions related to the withholding tax on your account.