Locked-In Retirement Savings Vehicles Withdrawals

KNOWLEDGE EXPECTED OF: QAFP® Professionals

Highest Knowledge Level: Evaluation

Knowledge Levels and Associated Verbs


Awareness
The state of being aware that something exists / to have familiarity with a particular activity or subject
Understanding
To comprehend the general relationship of particulars / to have an expertise with how something works
Application
Ability to put information to use / to use knowledge for relevant, practical purposes
Evaluation
To judge or conclude by utilizing data / a systematic determination of something’s worth or significance
Define
To state exactly the meaning of
Identify
To be aware of / to recognize and correctly name / to locate an appropriate resource
Explain
To make clear the meaning of / to describe something in more detail or reveal relevant facts or ideas related to it
Determine
To ascertain / to come to a decision, such as by investigation or reasoning
Compare
To note the similarities and differences between two or more things
Estimate
To determine an approximate value for
Calculate
To find the value using mathematics
Convert
To change from one form or purpose to another
Evaluate
To reach a conclusion or make a through careful study
Interpret
To give the meaning of / to construe or understand / to translate orally

Hold cursor over or click on each term to read its definition.

  • Identify opportunities available in some jurisdictions for withdrawing funds from a locked-in retirement savings vehicle, such as:
    • Financial hardship
    • Shortened life expectancy
    • Small balance
    • Non-residency
    • Spousal or child maintenance enforcement orders 
  • Identify the rules for withdrawing funds from a locked-in retirement savings vehicle. 
  • Identify the current withholding tax rates for cash withdrawals from a locked-in retirement savings vehicle.1
    • By residency
    • By amount 
  • Determine how each of the factors may impact the suitability of withdrawing from a locked-in retirement savings vehicle, such as: 
    • Tax impact
    • Administrative fees
    • Loss of Registered Retirement Savings Plan contribution room
    • Loss of asset growth within locked-in retirement savings vehicle 
    • Cash flow needs
    • Impact on government benefits 
  • Evaluate how each of the factors may impact the suitability of withdrawing from a locked-in retirement savings vehicle.
  • Calculate the withholding tax for a cash withdrawal from a locked-in retirement savings vehicle.
  • Explain how taxes payable on a cash withdrawal from a locked-in retirement savings vehicle may differ from the withholding taxes collected by a financial institution. 

REFERENCES

1 http://www.cra-arc.gc.ca/tx/bsnss/tpcs/pyrll/clcltng/spcl/lmpsm/wthhldng-eng.html 

KNOWLEDGE EXPECTED OF: CFP® Professionals

Highest Knowledge Level: Evaluation

Knowledge Levels and Associated Verbs


Awareness
The state of being aware that something exists / to have familiarity with a particular activity or subject
Understanding
To comprehend the general relationship of particulars / to have an expertise with how something works
Application
Ability to put information to use / to use knowledge for relevant, practical purposes
Evaluation
To judge or conclude by utilizing data / a systematic determination of something’s worth or significance
Define
To state exactly the meaning of
Identify
To be aware of / to recognize and correctly name / to locate an appropriate resource
Explain
To make clear the meaning of / to describe something in more detail or reveal relevant facts or ideas related to it
Determine
To ascertain / to come to a decision, such as by investigation or reasoning
Compare
To note the similarities and differences between two or more things
Estimate
To determine an approximate value for
Calculate
To find the value using mathematics
Convert
To change from one form or purpose to another
Evaluate
To reach a conclusion or make a through careful study
Interpret
To give the meaning of / to construe or understand / to translate orally

Hold cursor over or click on each term to read its definition.

  • Identify opportunities available in some jurisdictions for withdrawing funds from a locked-in retirement savings vehicle, such as:
    • Financial hardship
    • Shortened life expectancy
    • Small balance
    • Non-residency
    • Spousal or child maintenance enforcement orders 
  • Identify the rules for withdrawing funds from a locked-in retirement savings vehicle.
  • Identify the current withholding tax rates for cash withdrawals from a locked-in retirement savings vehicle.1
    • By residency
    • By amount 
  • Determine how each of the factors may impact the suitability of withdrawing from a locked-in retirement savings vehicle, such as: 
    • Tax impact
    • Administrative fees
    • Loss of Registered Retirement Savings Plan contribution room
    • Loss of asset growth within locked-in retirement savings vehicle 
    • Cash flow needs
    • Impact on government benefits 
  • Evaluate how each of the factors may impact the suitability of withdrawing from a locked-in retirement savings vehicle. 
  • Calculate the withholding tax for a cash withdrawal from a locked-in retirement savings vehicle. 
  • Explain how taxes payable on a cash withdrawal from a locked-in retirement savings vehicle may differ from the withholding taxes collected by a financial institution. 
Additional Knowledge Expected of CFP Professionals
  • Estimate the tax impact resulting from a cash withdrawal from a locked-in retirement savings vehicle.
  • Calculate the impact on current and projected net worth of a withdrawal from a locked-in retirement savings vehicle.

REFERENCES

1 http://www.cra-arc.gc.ca/tx/bsnss/tpcs/pyrll/clcltng/spcl/lmpsm/wthhldng-eng.html 
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