OTTAWA — A new review by Parliament’s spending watchdog says waiving mandatory withdrawal amounts from seniors’ retirement savings would cost federal coffers about $1 billion annually.
Each year, seniors with registered retirement income funds have to withdraw a minimum amount from their savings, which is considered taxable income.
The Liberals shifted the marker this year, dropping the minimum for each senior by 25 per cent to ease concerns raised by the effect of the COVID-19 pandemic on financial investments.
The parliamentary budget office says dropping it all the way to zero would end up costing the federal treasury $940 million next year, rising each year thereafter until hitting just over $1 billion in 2025.
The budget officer’s report also says the cost would decrease over time for individuals as they age.
Seniors groups had pressed the Liberals earlier this year to waive the minimum withdrawal limit owing to the effect COVID-19 was having on financial markets and retirement savings.
At the time, Seniors Minister Deb Schulte said the government would watch financial markets before making any decisions, since most seniors don’t need to make RRIF withdrawals until the end of the year.
This report by The Canadian Press was first published Nov. 19, 2020.
The Canadian Press