Canadians Seek To Delay Withdrawals From Retirement Accounts
October 12, 2008
Support is growing among Canadian investment experts for new rules that would allow Canadian retirees to postpone withdrawals from their registered retirement income funds (RRIFs). In the U.S., Sen. John McCain (R-AZ), the Republican candidate for president, has suggested similar moves.
Canadians with RRIFs are required to begin taking minimum withdrawals at age 71, just as Americans must take required minimum distributions from their tax-deferred savings accounts the year after they reach age 70½. But some believe that Canadians should be allowed to delay withdrawals—which might force the liquidation of depressed assets—until asset values recover.
Since peaking in June 2008, the Toronto Stock Exchange has lost more than a third of its value, or about $500 billion. That has cut the value of Canadians' Registered Retirement Savings Plans, mutual funds, pension plan assets and other investments.
“CARP [the Canadian Association of Retired Persons] has been on the record suggesting that they do this permanently, not just in a market downturn,'” said Susan Eng, vice-president of advocacy for the organization. “I don't know why they have to study it. We've studied it to death.”
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