ATS Brothers/Sisters in Europe, Are you pulling money out of Europe today after Cyprus?

Originally posted by liloldme
So just to clarify...those of you who pulled your 401k's out...how did you manage the huge tax hit on that? Or did you just take the loss anyway? I have a bit in RRSP (Similar to a US 401k) that I am worrying about. I could pull it out today but would take a 30 - 40% loss on it to tax. So I'm thinking take a 40% loss right now because I'm afraid I might take a 40% loss later? I dunno.

Ugh, RRSP's... bloody government invented cash grab.

The problem with RRSP's that people are finding out is that when it matures into RIF's, the banks determine a monthly amount that you will automatically receive based on an amortized calculation over X number of years (your expected remaining years to live... usually calculated to around the age of 76). This means that if you have a good pension and a massive accumulated amount in RRSP/RIF's that have now matured, the amount you receive from your RIF's could now put you in a 50% tax bracket, where as you were only getting a tax break of 30-40% during your working years while you were investing.

The government knows this and that's why they set it up that way.

I've had many seniors sit in my office bawling their eyes out because they ended up owing huge chunks of money when filing their tax returns. It's a horrible sight to see, and there's nothing these poor buggers can do about it after the fact.

If you want to pull your RRSP's (which I strongly advise) just look at it this way: The money that's sitting in there is earnings that you haven't yet paid the tax on. So in reality, you need look at the amount with the knowledge that 30-40% (depending on your tax bracket) of it is not yours and never has been.

Just keep in mind that if you want to pull your RRSP's the bank will only take 10% tax off the top and will leave the rest for you to pay at the end of the year when you file your tax return. So depending on your living situation (dependent spouse, children, or other various taxable income deductions) you may be able to get away with not owing a huge chunk of tax at the end of the year.

Otherwise ask the bank to deduct 30% instead of the standard 10%.

Also keep in mind you will only be able to cash out the principle amount and not the interest earned. Any interest earned is locked in permanently until it matures into a RIF. That's the way the ball bounces with RRSP's.

I've advised people for years to stay away from the RRSP scam and to, instead, invest their monies into something that they can control the ins and outs themselves like short-term GIC's, instead of the banks controlling your investment.

Anyways, don't fret about the tax slap if you want to pull your RRSP's... a chunk of it was never yours to begin with.

Hope that helps you in your decision making.
Cheers.

@OP, I wish I had the money to pull out of the bank... I know my parens are looking to invest in gold and metal, to secure their money.
Its odd to say the EU is punishing the banks by stealing citizent their savings. How is a bank punished by this???

reply to post by FraternitasSaturni


don't be too smug. ever heard of MF Global? GM bond holders? the rule of law is no impediment to the TPTB.

reply to post by camaro68ss

Hi!
I'm European, living in Germany (but not German) and I am not withdrawing my money from the bank - yet.
The crisis in Cyprus was discussed a long time ago here.

EU is much tougher with Cyprus than other country, because Cyprus has decided to be a fiscal paradise, a casino country, a washing machine, etc. you choose.
Basically they have a very low tax on companies, many EU companies are based there so that they pay less tax.
Most of the money in Cyprus banks are owned by Russian people.
Washing machine system + Russia =... I'll let you finish the equation

And now Cyprus is coming to ask for some money so that they can continue their washing machine business?????

France has been the strongest country to ask Cyprus to raise their tax.
Germany wants to see Cyprus control its spending before it lends anything.
If the same happened in Spain and/or Italy - the last countries before the SHTF in France and Germany - then I would seriously consider buying gold.

Just saw on Closing Bell..stock market money management channel...

Cyprus has suspended cashing of all checks. But, not depositing of checks. No mention of how long this new order will be in place. People are outraged they can't cash their paychecks....

Des

@ OP .. The answer to your question is no .. I have no savings I work as rent a cop in a supermarket .. I get paid monthly and by the next pay day I'm broke .. So let the bank have a of my £23 that's left in it.

Also why arnt the people in Cyprus rioting like f--- ? They are paying for the banks mess ups and you can guarantee they will get no thanks or any pay back for it. Why should hard working citizens be made to pay off a banking crisis when it isn't their fault

reply to post by CranialSponge


Thanks for the great post, CranialSponge! You make very valid points. I think I may end up pulling my RRSP and TFSA and just leave day-to-day banking alone to do transactional banking, bill payments, etc.

Now to decide what to do with the money. Silver? Cash? Other items? A lot to think about for sure.

What is really sad is that the majority of Canadians have their heads in the sand and don't even realize what is happening. And even worse, once they figure it out they will just lay down and take it! (or bend over and take it, might be a better description) Society has become so complacent and down-trodden that most people just sit around and complain but no one will really do anything. Maybe because they don't know what they an do. Or maybe it's fear, I don't know.