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- Title
Rethinking RRIF Withdrawals: New Rates and Methodologies for New Realities.
- Authors
Milevsky, Moshe A.
- Abstract
In this article, the author employs a microeconomic framework to examine the registered retirement income fund (RRIF) withdrawal schedule in the context of current interest rates and longevity projections. He argues that today's demographic and economic realities require that the schedule be revised to remain justifiable and fair. The methodology employed in this article differs from other policy-based (or probabilistic) arguments: the author compares the legislated withdrawal schedule with an optimal withdrawal schedule In a consumption-smoothing life cycle model (LCM) for a longevity risk-averse retiree. He argues that while the LCM might be able to justify the RRIF withdrawal rates in place during the late 1980s (a period with higher interest rates and lower longevity), a quarter of a century later the schedule has become outdated.
- Subjects
CANADA; REGISTERED Retirement Income Funds; REGISTERED retirement savings plans; RETIREMENT income; WITHDRAWAL of funds; INTEREST rates; CANADA. Income Tax Act; PENSION trusts; TAXATION
- Publication
Canadian Tax Journal / Revue Fiscale Canadienne, 2014, Vol 62, Issue 4, p971
- ISSN
0008-5111
- Publication type
Article