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If my income will increase when I’m 65, should I convert my RRSP to a TFSA before then?



Our response:

There is no direct way to convert a Registered Retirement Savings Plan (RRSP) to a Tax-Free Savings Account (TFSA). In order to contribute funds to a TFSA from an RRSP, you must withdraw the funds, and pay any applicable withholding tax. You must also have the available contribution room in your TFSA.

Before the end of the year you turn 71, you must close your RRSP and take one of three actions (or any combination of these): convert it to a Registered Retirement Income Fund (RRIF), purchase an annuity, or take the RRSP as cash.

Speak to a registered financial advisor to discuss your RRSP options and to determine the best decision based on your personal financial needs and overall financial plan.

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