LLQP Segregated Funds & Annuities · Component 1.2 · 35% of the exam
For a client already receiving OAS, additional RRIF withdrawals may:
- AHave no effect on OAS, since registered plan income is excluded from the recovery tax calculation
- BIncrease OAS, since the government tops up the pension for retirees who draw on their own savings
- CBe tax-free once the client is receiving OAS, since the two programs are coordinated
- Raise net income and trigger or increase the OAS recovery tax, so timing and source matter
Correct answer: D) Raise net income and trigger or increase the OAS recovery tax, so timing and source matter
Integration of government benefits with withdrawals is a key assessment point. TFSA withdrawals are invisible to the clawback.
Why the other options are wrong
- ARRIF income counts toward the recovery tax threshold.
- BHigher income reduces OAS, never increases it.
- CRRIF withdrawals are taxable at any age.
Exam tip
RRIF income raises OAS clawback; TFSA withdrawals do not.
Common mistake
Ignoring OAS clawback when planning withdrawals.
What this tests
CISRO competency component 1.2 — Assess the client's needs and situation — which is weighted at 35% of the Segregated Funds & Annuities module. Written against the published curriculum.
More from component 1
- The first step before recommending a segregated fund or annuity is to:
- A client's 'time horizon' for an investment is:
- 'Risk tolerance' in an investor profile refers to:
- A client says he wants 'high returns with no risk of losing money'. The agent should:
- Investment objectives are commonly classified as:
- Why is the client's marginal tax rate relevant to a segregated fund recommendation?
Practice the whole Segregated Funds & Annuities module
Timed sets weighted like the exam, and review of every question you miss. Free to start.