Retirement Planning: Registered Vehicles, Limits, and Decumulation
The core map
Retirement planning on the CIFP RRC exam is built on knowing which registered vehicle permits what, and how contribution room is calculated. Candidates must be fluent in RRSP mechanics (earned income of 18%, annual money-purchase ceiling, carry-forward of unused room, deduction versus contribution distinction), TFSA mechanics (no deduction, room restored on withdrawal, indexed annual limit), and the interaction with pension adjustment and past service pension adjustment. Know the spousal RRSP attribution rules, including the three-year rule on withdrawals before January 1 of the year after the last contribution, and the difference between contributions made while together versus separated.
Decumulation and income splitting
Understand RRIF minimums (the prescribed factor applied to the prior December 31 value), the option to base payments on a younger spouse's age, and withholding tax on lump-sum withdrawals. Pension income splitting, the pension income credit, OAS clawback thresholds, and CPP/QPP sharing are frequent test points. Note that RRIF payments qualify for pension splitting but CPP does not.
Traps
Questions love the difference between a deduction and a credit, the fact that TFSA withdrawals do not create room until the following calendar year, and the rule that earned income excludes pension income and investment income. Watch for questions that convert a lump-sum RRSP withdrawal into a withholding calculation where the rate depends on the amount withdrawn, not on marginal tax rate.
Rule of thumb
For a quick sanity check: 18% of prior-year earned income, capped at the annual maximum, minus the pension adjustment equals new room. If a client earned $80,000 with a $4,000 pension adjustment, room is roughly $10,400 ($14,400 minus $4,000), assuming the cap is not binding.