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RRSPs RRIFs and TFSAs
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Non-Borrowing, making your RRSP/RRIF withdrawals until the money is gone, and |
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Borrowing, to invest in stocks outside a registered plan, while making your RRSP/RRIF withdrawals. |
The results of this calculator depend in part on the enhanced dividend tax credit, This calculator uses the dividend gross-up and dividend tax credit rates for 2011 and 2012. The 2012 rates are used for years after 2012. Income tax rates for 2011 are used, with no change in future years.
You can compare ten different cases, so that you see the differences made when you use a different borrowing rate, rate of return, borrowing amount, inflation rate, etc. You could also compare the results for ten different provinces/territories.
Enter the required information on the Input sheet of the calculator. Then, click the Calculate button, and the calculator runs a program called a macro. This macro adjusts the withdrawals from your RRSP/RRIF in the Borrowing scenario so that your net after tax disposable income in each year is the same as it is in the Non-Borrowing scenario. Once the RRIF in the Borrowing scenario is drawn down to zero, investments outside the RRIF are sold to provide income. These sales are adjusted so that the net after tax disposable income in each year is the same as in the Non-Borrowing scenario. This happens until the RRIF in the Non-Borrowing scenario is reduced to zero. The results show the value of your investments in the Borrowing scenario at this time, less any loan amount still outstanding. This is the amount by which you are ahead because you borrowed to invest.
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Our calculator is in the form of an Excel worksheet file, and was developed using Excel 2003 SP3. It contains programs called macros, so we cannot convert it to a web page. You will need some version of Excel to open and use the calculator. You have to save the worksheet file to your computer for use offline. We have been developing this calculator for a few years now, and have done extensive testing on it, but it may still have some glitches that we haven't discovered. The calculator is protected by copyright. You may use the calculator in your business, but you do not have permission to sell the calculator, or to deconstruct and revise the calculator. The calculator is for planning use only, and financial decisions should not be made based solely on its results. We always advise getting independent financial advice before making any major financial decisions. |
Because the calculator is an Excel file which you download to your own computer, you will not automatically know if there are updates available. If you want to be notified that there is a new version available, subscribe to our mailing list. The link below for downloading the calculator indicates the last date that it was revised, and the filename includes the revised date.
Open the Shelter RRSPs 2011 Calculator - Save to your desktop or your documents directory, then open from that location. Last revised January 22, 2011.
If you open the file instead of saving it to your computer, it opens in your browser and may result in errors.
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When prompted, save the calculator to your own computer, then open it. You will have to say Yes when asked if you want to enable macros. If your Excel macro security level is set at "high", you may have to change it to run the macro in the calculator. To do this, from the Excel menu choose Tools Macro Security and change the security level to medium. If you have the worksheet open when you do this, you will have to close and re-open the worksheet. When Macro Security is set to medium, you are given the option to run or not run macros in any worksheet, when the worksheet is opened. In order for the Shelter RRSPs worksheet file to work properly, you must have the Excel Analysis ToolPak enabled. To enable it, choose Tools from the Excel menu, then Add-ins. Make sure there is a tick mark beside Analysis ToolPak, and click OK. If you have any problems with the Shelter RRSPs worksheet file, or any comments or suggestions, please let us know by e-mailing us at . We would appreciate any feedback on it - let us know if you think it is a useful planning tool.
Revised: January 28, 2012
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