The Clients Turning 71 Report identifies clients who are approaching the mandatory age for converting their registered retirement accounts, such as RRSPs, into a retirement income option. Reviewing this report helps ensure that clients receive the necessary guidance to transition their accounts before the deadline and avoid tax implications.
What Happens When a Client Turns 71?
Under Canadian tax rules, clients with RRSPs must convert these accounts into a Registered Retirement Income Fund (RRIF), purchase an annuity, or withdraw the full value of the RRSP by the end of the calendar year in which they turn 71. Failure to take action by December 31 of that year will result in the entire RRSP balance being fully taxable as income.
Why Clients Appear on this Report
Clients appear on the Clients Turning 71 Report when they will be turning 71 during the current calendar year. This provides an early alert to ensure there is ample time to guide clients through their available options and initiate the necessary account transitions.
How this Impacts Clients
If no action is taken, clients risk having their full RRSP balance deregistered and taxed as income at year-end, which can significantly increase their tax liability. Proactively assisting clients with converting to a RRIF, purchasing an annuity, or managing withdrawals ensures clients retain control over their retirement income strategy and avoid unnecessary tax burdens.
How to Access the Clients Turning 71 Report
To access the Clients Turning 71 Report:
- Log in to the CRM portal.
- From the left navigation menu, click CRM > Contacts.
- On the contact’s index page, you can access the report as a saved view by clicking +Add view to the right of the tabs on the index page, and selecting Clients Turning 71 Report from the dropdown.
The report will display a filtered list of clients who will be turning 71 this calendar year.
Best Practices
- Review the Clients Turning 71 Report regularly to ensure early outreach.
- Begin conversations with clients several months before year-end to allow time for decision-making and processing.
- Educate clients on the implications of each available option to help them make informed retirement income decisions.