I need $30,000 after tax, to live on. How much should I draw from (or put to) savings in order to exactly deliver $30K?
Think about it. Fire up your Cantax and try to come up with that exact after-tax amount. You will have to repetitively try various RRSP withdrawals (or contributions), until you even get close to the 30K. Of course, if there is other income involved (you may still have a small salary, rental or dividend income, CPP, OAS, you may have capital outside your RRSP, or you may have loan or insurance payments to make)…. these complicate the process even more. Finding a withdrawal or deposit level which does the above, incorporates these other cash flows and exactly runs your capital out (annuitizes it) at age 90/95/100 is even more complex. The 2 to 3 second pause while RRIFmetic computes is the reverse tax engine doing its thing. During that pause, the program is performing that same repetitive (recursive) math, the equivalent of Quicktax crunching up to 20000 individual tax returns! ….Spreadsheeters/CCH users: don’t even think about it! (RRIFmetic math concepts) Unlike its other tax-bas
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