knowledge topics
Locked-In Retirement Income Vehicles Withdrawals
KNOWLEDGE EXPECTED OF: Both CFP® Professionals and QAFPTM Professionals
- Define the types of withdrawals that may be made from a locked-in retirement income vehicles.
- Prescribed mandatory annual minimum withdrawal
- Prescribed mandatory annual maximum withdrawal
- Excess amounts
- Extenuating circumstances
- Unlocking provisions under pension legislation
- Identify when the first prescribed mandatory annual minimum payment for a locked-in retirement income vehicle must be taken.
- Estimate the prescribed mandatory annual minimum withdrawal for a locked-in retirement income vehicle.
- Estimate the prescribed mandatory annual maximum withdrawal for a locked-in retirement income vehicle.
- Identify circumstances when funds may be withdrawn from a locked-in retirement income vehicle (subject to jurisdiction), such as:
- Financial hardship
- Shortened life expectancy
- Small balance
- Non-residency
- Spousal or child maintenance enforcement orders
- Identify that rules for withdrawals of funds from a locked-in retirement income vehicle may differ based on differences in provincial/territorial pension legislation.
- Identify the rules for withdrawing funds from a locked-in retirement income vehicle.
- Identify the current withholding tax rates for excess amounts withdrawn from a locked-in retirement income vehicle.1
- Explain how each of the factors may impact the suitability of withdrawing from a locked-in retirement income vehicle, such as:
- Tax impact
- Administrative fees
- Loss of asset growth within locked-in retirement income vehicle
- Annual minimum requirements and maximum allowances
- Evaluate how each of the factors may impact the suitability of withdrawing from a locked-in retirement income vehicle.
- Calculate the withholding tax for a cash withdrawal from a locked-in retirement income vehicle.
- Estimate the tax impact resulting from a cash withdrawal from a locked-in retirement income vehicle.
- Explain how taxes payable on a cash withdrawal from a locked-in retirement income vehicle 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 locked-in retirement income vehicle.
Glossary of Verbs (mouse over to see definition)
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Define
To state exactly the meaning of
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Identify
To be aware of / to recognize and correctly name / to locate an appropriate resource
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Explain
To make clear the meaning of / to describe something in more detail or reveal relevant facts or ideas related to it
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Compare
To note the similarities and differences between two or more things
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Estimate
To determine an approximate value for
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Calculate
To find the value using mathematics
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Convert
To change from one form or purpose to another
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Evaluate
To reach a conclusion or make a judgement through careful study
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Interpret
To give the meaning of / to construe or understand / to translate orally
Read more about the Taxonomy used in the FP-BoK
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