RRSP 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 the types of withdrawals from a Registered Retirement Savings Plan.
    • Cash withdrawal
    • Home Buyer’s Plan withdrawal
    • Lifelong Learning Plan withdrawal 
  • Identify who may request a withdrawal from a Registered Retirement Savings Plan.
    • For a personal Registered Retirement Savings Plan
    • For a spousal Registered Retirement Savings Plan 
  • Explain the potential tax impact of a cash withdrawal from a Registered Retirement Savings Plan.
    • For a personal Registered Retirement Savings Plan
    • For a spousal Registered Retirement Savings Plan 
  • Explain the income attribution rules related to withdrawals from a spousal Registered Retirement Savings Plan.1
    • Who the income is attributed to
    • Who is responsible for the tax on the withdrawal
    • The timing of the withdrawal 
  • Explain the circumstances when the attribution rules for the withdrawal of funds from a spousal Registered Retirement Savings Plan will not apply.2
  • Identify the current withholding tax rates for cash withdrawals from a Registered Retirement Savings Plan.3
    • By residency
    • By amount 
  • Determine how each of these factors may impact the suitability of withdrawing from a Registered Retirement Savings Plan for personal use: 
    • Tax impact
    • Loss of Registered Retirement Savings Plan contribution room
    • Loss of asset growth within Registered Retirement Savings Plan 
    • Cash flow needs
    • Impact on government benefits 
  • Evaluate how each of the factors may impact the suitability of withdrawing from a Registered Retirement Savings Plan for personal use. 
  • Calculate the withholding tax for a cash withdrawal from a Registered Retirement Savings Plan.
    • For a personal Registered Retirement Savings Plan 
    • For a spousal or common-law partner Registered Retirement Savings Plan  
  • Estimate the tax impact resulting from a cash withdrawal from a Registered Retirement Savings Plan.
    • For a personal Registered Retirement Savings Plan 
    • For a spousal or common-law partner Registered Retirement Savings Plan  
  • Explain how taxes payable on a cash withdrawal from a Registered Retirement Savings Plan may differ from the withholding taxes collected by a financial institution.  
  • Calculate the impact on current and projected net worth of a withdrawal from a Registered Retirement Savings Plan.

REFERENCES

1 http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/rrsp-reer/wthdrwls/spsl-eng.html 

2 http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/rrsp-reer/wthdrwls/spsl-eng.html 

3 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 the types of withdrawals from a Registered Retirement Savings Plan.
    • Cash withdrawal
    • Home Buyer’s Plan withdrawal
    • Lifelong Learning Plan withdrawal 
  • Identify who may request a withdrawal from a Registered Retirement Savings Plan.
    • For a personal Registered Retirement Savings Plan
    • For a spousal Registered Retirement Savings Plan 
  • Explain the potential tax impact of a cash withdrawal from a Registered Retirement Savings Plan.
    • For a personal Registered Retirement Savings Plan
    • For a spousal Registered Retirement Savings Plan 
  • Explain the income attribution rules related to withdrawals from a spousal Registered Retirement Savings Plan.1
    • Who the income is attributed to
    • Who is responsible for the tax on the withdrawal
    • The timing of the withdrawal 
  • Explain the circumstances when the attribution rules for the withdrawal of funds from a spousal Registered Retirement Savings Plan will not apply.2 
  • Identify the current withholding tax rates for cash withdrawals from a Registered Retirement Savings Plan.3
    • By residency
    • By amount 
  • Determine how each of these factors may impact the suitability of withdrawing from a Registered Retirement Savings Plan for personal use: 
    • Tax impact
    • Loss of Registered Retirement Savings Plan contribution room
    • Loss of asset growth within Registered Retirement Savings Plan 
    • Cash flow needs
    • Impact on government benefits 
  • Evaluate how each of the factors may impact the suitability of withdrawing from a Registered Retirement Savings Plan for personal use. 
  • Calculate the withholding tax for a cash withdrawal from a Registered Retirement Savings Plan.
    • For a personal Registered Retirement Savings Plan 
    • For a spousal or common-law partner Registered Retirement Savings Plan  
  • Estimate the tax impact resulting from a cash withdrawal from a Registered Retirement Savings Plan.
    • For a personal Registered Retirement Savings Plan 
    • For a spousal or common-law partner Registered Retirement Savings Plan  
  • Explain how taxes payable on a cash withdrawal from a Registered Retirement Savings Plan may differ from the withholding taxes collected by a financial institution.  
  • Calculate the impact on current and projected net worth of a withdrawal from a Registered Retirement Savings Plan.

REFERENCES

1 http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/rrsp-reer/wthdrwls/spsl-eng.html 

2 http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/rrsp-reer/wthdrwls/spsl-eng.html 

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