What is the minimum withdrawal amount Jack will need to take from his RRIF at age 74?

To determine the minimum withdrawal amount Jack will need to take from his Registered Retirement Income Fund (RRIF) at age 74, it is essential to understand the withdrawal formula established by the Canadian government. The minimum amount required to withdraw annually is based on a percentage of the RRIF balance as of the beginning of the year.

At age 74, the prescribed percentage for RRIF withdrawals is 5.4%. To calculate the minimum withdrawal, you take that percentage and apply it to the total value of the RRIF at the start of the year. If we consider the scenario where Jack's RRIF balance is, for example, around $176,000, the calculation would look like this:

Withdrawal = 5.4% of $176,000

Withdrawal = 0.054 x $176,000

Withdrawal = $9,504

Based on this illustrative balance, the minimum withdrawal amount would be approximately $9,504, which rounds to $9,520. This illustrates why the withdrawal amount of $9,520 aligns with the calculated requirement for Jack at age 74, making it the correct choice.

Other amounts provided in the options are not tied to the prescribed percentage and would exceed the minimum required withdrawal based on