Timing the withdrawal of RRSP savings to minimize your tax hit

A reader who has been retired for several years lives on government benefits, including the Guaranteed Income Supplement, and holds RRSP and TFSA savings he is unsure when to touch. The wrinkle is that GIS is income-tested, so RRSP withdrawals can quietly reduce that benefit even when the income tax owing looks small, which makes the timing of withdrawals matter more than it first appears. This piece works through how to think about drawing down registered savings in a way that does not needlessly claw back income-tested benefits, and where a TFSA fits because money taken from it does not count as income. It is especially relevant to lower-income retirees relying on GIS who assume the only question is income tax, when the interaction between withdrawals and benefits is often the bigger factor in deciding when and how much to take.