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Make your retirement dollars shine brighter
Most Canadians keep their retirement savings inside an RRSP but once you start withdrawing, the CRA can tax that income at rates as high as 53%. For high earners, that means your retirement dollars may not stretch nearly as far as you planned.
But what if you could gradually shift RRSP funds into a structure taxed between 0% and 23%, while keeping your total taxable income unchanged?
Here’s how that transformation works for a 45-year-old earning $200,000+ annually, with a $200,000 RRSP and a retirement age of 65:
Borrow $100,000 to invest in quality assets
For example, investing in quality ETFs with an assumed interest-only loan at 4.5%.
Both your RRSP and your investment portfolio are expected to earn 10% annually.
Withdraw $5,000 from your RRSP each year
This withdrawal is used exclusively to pay the interest on the investment loan.
Balance the tax impact
The $5,000 RRSP withdrawal is considered taxable income.
However, the interest expense on the loan is fully tax-deductible as a carrying charge (Line 221 of your T1 General).
The deduction offsets the income inclusion — keeping your net taxable income neutral.
Over time, you effectively:
- Reduce RRSP exposure to high tax brackets
- Grow a significant non-registered investment portfolio taxed far more efficiently
- Preserve more of your capital for retirement, legacy, or future opportunities
This is a strategy built for people who want to make smarter, more tax-efficient moves today so their money works harder for them tomorrow.
