My wife recently passed away in her late 30s. She had a small RRSP with about $22k in it. In 2026 she had very little income as she was sick and unable to work.
My first instinct was to roll over her RRSP into mine to defer taxes until I retire. But then I realized I will have a significantly higher income in retirement that she had in the first three months of 2026. So is it better for me to withdraw the funds from the RRSP now, and pay the lower tax rate? Or take the added contribution room and defer taxes for another 25 years? I don’t have much contribution room I my RRSP since I’m a teacher, but will likely max it out in the coming year to offset a taxable pension payout from my wife’s pension.
I earn $120k a year, and expect to have income of about 75k in retirement.
Dealing with my grief by focusing on numbers instead. Any advice is appreciated.