I have $30,000.00 invested in a RRSP mutual funds account. Need to cash it in, have heard taking smaller amounts at a time is better because lower % penalty. Anyone knows if its true or have a better idea?.
There isn't technically a penalty for withdrawal, but be aware of the fees - your bank/brokerage or financial institution will charge you a fee for the deregistration of the money and they will hold back some of the tax (usually 10-20% depending on your province of residence). Where it really starts to hurt is when you have to include that deregistration amount in your taxable income and they've only held back about half of the tax owing, so you will have to make sure that if you take money from your RRSP you will be ready to owe money on your tax return the following year.
I have to wonder about rrsp's... I don't like them at all. We seem to get pushed into buying them from everyone and their brother but every time I turn around there's some problem with them!! So many people I know lost money on RRSP's when the stock market crashed in Nov. and if we want to take money out we can lose up to 25% of our inital investment??? it seems like the craps to me!!. Do understand we get money back every year just hope your income is lower when you retire.