You're not required to make a withdrawal the year you convert your account, however moving forward into the next calendar year, and for all future calendar years, there will be a minimum amount you must withdraw each year. The minimum amount is based on the previous year-end value of the account, and multiplied by a factor value that is determined by the government based on your age each year! If by year-end you have not withdrawn at least the minimum amount, your RRIF, Spousal RRIF, or LIF provider will automatically send you the necessary amount.

If you withdraw any funds that are above the minimum as described above, you'll be subject to a withholding tax rate. Please note that for RRIFs there is no maximum on how much you can withdraw (so long as you're okay with the withholding tax rate you'll be subject to), but there is a maximum for LIFs! You'll be prevented from withdrawing above this maximum for a LIF.

Wealthsimple also offers an RRSP contribution tracker, which will allow you to estimate your contribution room with some accuracy, but we still highly recommend setting up a MyCRA profile to verify our estimation! You can follow the instructions on how to set up your RRSP contribution tracker in our FAQ article here!

If you withdraw from an RESP for non-educational purposes a withholding tax would be applied from the outset of the withdrawal, so no further tax implications will follow from this. No tax implications follow for the subscribers (owners) of the RESP accounts when a withdrawal is made for educational purposes. When a withdrawal is made for educational purposes, the beneficiary has the portion that was withdrawn from grants taxed as income!

Learn more about RESPs here!

All income activities (dividends, interest earned, and realized gains and/or losses) are taxable within non-registered accounts such as Personal accounts, Joint accounts, Corporate accounts, and Wealthsimple Save accounts. This means it's important to consider what sort of taxes you could be liable for before liquidating or moving assets held within a non-registered account.

Learn more about Personal, Joint, Wealthsimple Cash, and Business accounts. 

There are limitations to how much you can contribute on an annual basis to your RRSP! You may annually contribute whichever is lower of the following:

• 18% of your pre-tax earned income from the previous year or;
• A maximum of $27,230 (2020)
• The remaining limit after any company-sponsored pension plan contribution

Note: Any unused contribution room from 1991 onwards can be carried forward to the current year.

Regardless of whether you contribute to your RRSP or a Spousal RRSP, the contribution counts towards your own contribution limit! Every Canadian is allowed to over-contribute $2,000 once in their lifetime, but if you over-contribute beyond this amount, you'll be charged a penalty tax of 1% of the over-contribution amount per month.

If you're not certain what available contribution room you have, we highly recommend setting up a MyCRA online profile, which you can do here. 

Learn more about RRSPs, Spousal RRSPs, and LIRAs.