To provide a cushion against accidentally exceeding this limit, you may want to keep your foreign content below 25 per cent. The 25 per cent foreign content limit in 2000 is calculated on the book value of each RRSP, which includes its total cost, plus any distributions, interest or dividends received, less any amount withdrawn from the plan. Tip Special mutual funds use derivatives to replicate the performance of foreign mutual funds and international stock indices. They are not considered to be foreign property. Consult your financial advisor before investing.
Fees associated with RRSPs are no longer tax deductible.
When an individual leaves their place of employment, they often have the option of either receiving a pension at retirement or transferring the commuted value of their deferred pension. The commuted value cannot be paid to the individual, but must instead be either transferred directly to another pension plan or locked-in RRSP, or used to purchase a life annuity. Generally, income can be received as early as age 55, or as late as 69. A LIF must be converted into a life annuity by the end of the year in which the holder turns 80. LIFs are subject to the same annual minimum withdrawal limits as RRIFs and to maximum withdrawal limits determined by pension legislation.