Ways to reduce net income after age 71 with Equitable Life
Your client is contacting you to ask how to reduce net income after age 71. While each client’s situation is unique, here are a few options to consider.
- Clients with a spouse under the age of 71 can contribute to a spousal Retirement Savings Plan (RSP) up until December 31st of the year the spouse turns 71; provided contribution room is available. This option can also work for those clients over the age of 71 with employment income. This can be useful for small business owners who are still making money over the age of 71 and forced to convert their RSP to a Retirement Income Fund (RIF) or Life Income Fund (LIF).
- For clients with a RIF or LIF, they can strategically elect to use their spouses’ age to calculate the minimum RIF income payment (minimum and maximum for LIF). The idea being that if there is an age gap between spouses:
- Your client makes a RIF/LIF minimum payment lower by using the age of the younger spouse. This is beneficial to clients who do not need a lot of income from their RIF/LIF.
- Your client makes a LIF maximum payment higher by using the age of the older spouse. This is beneficial to clients who want to withdraw as much as possible from their LIFs each year.
To learn more, contact your Regional Investment Sales Manager.
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