The $350K RRSP Meltdown Mistake is a real-world example of how missing the right withdrawal strategy can quietly cost retirees hundreds of thousands of dollars.
Today, we’ll walk you through the case of Ross and Rachel, and show exactly how smarter RRSP withdrawals could have saved them $350,000 — and how you can avoid the same mistake.
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The $350K RRSP Meltdown Mistake: Meet Ross and Rachel
Ross retired at 62 while Rachel continued working until age 67, earning $200,000 annually.
Together they had:
- Over $1.6 million in RRSPs
- TFSAs valued at $200,000
- A joint non-registered account with $230,000
They planned to defer withdrawals and government benefits, which created the $350K RRSP Meltdown Mistake we’re analyzing today.
Where Their Plan Went Wrong
Their strategy left Ross’s RRSP untouched while he had no income. This was a missed opportunity to withdraw funds in a low tax bracket.
This led to:
- Massive RRSP growth
- Foced large withdrawals once a RRIF
- A final tax bill near $1 million
Why an RRSP Meltdown Strategy Matters
An RRSP meltdown strategy would have allowed Ross to:
- Withdraw $100,000 per year while in a lower tax bracket
- Move taxable assets into more flexible non-registered investments
- Reduce final estate taxes dramatically
Had they avoided the $350K RRSP Meltdown Mistake, their net estate would be significantly larger.
The Numbers Behind the Mistake
| Scenario | Result |
| No Early Withdrawals | Estate of ~ $4M, $1M tax bill |
| Early Withdrawals (RRSP Meltdown) | Estate of ~$4.38M, much lower tax bill |
Drawing down the RRSPS earlier, even when they didn’t “need” the money, would have protected $350,000 in family wealth.
How to Avoid Your Own $350K RRSP Meltdown Mistake
If you have a spouse still working and you’re in a low-income year, it’s often smart to:
- Start withdrawing from your RRSP
- Stay within moderate tax brackets
- Shift wealth into more tax-efficient vehicles
Small changes now can prevent massive tax losses later.
If you want to make sure your retirement strategy is tax-efficient and protects your estate, we’re here to help.
