Investments / RRIF
RRIF: Turn Your RRSP into a Reliable Retirement Income
A Registered Retirement Income Fund keeps your savings invested and tax-sheltered while paying you an income in retirement. We help you plan your withdrawals so your money lasts and you pay less tax.
By December 31 of the year you turn 71, your RRSP must be converted. Most people choose a RRIF, which works like an RRSP in reverse: instead of putting money in, you take out at least a minimum amount each year, and only what you withdraw is taxed.
RRIF at a glance
- Age 71Latest year to convert your RRSP to a RRIF or annuity
- 5.28%Minimum withdrawal at age 71, rising each year
- Any timeYou can open a RRIF earlier than 71 if you want income sooner
- Spouse’s ageYou can base the minimum on a younger spouse’s age to withdraw less
- Pension creditRRIF income can qualify for the $2,000 pension income credit at 65+
- SplittingUp to 50% of RRIF income can be split with your spouse at 65+
Minimum withdrawals are a percentage of your RRIF value on January 1 each year, set by the CRA.
RRIF, annuity or both?
RRIF
- Your money stays invested
- You choose how much to withdraw above the minimum
- Any balance goes to your beneficiaries
- Income depends on investment returns
Annuity
- Guaranteed income for life or a set period
- No investment decisions to make
- Payments stop at death unless you choose a guarantee
- Less flexible once purchased
Mix of both
- An annuity covers your basic bills
- A RRIF stays invested for growth and extras
- Balances security and flexibility
RRIF strategies
Start withdrawals before 71
Taking smaller amounts in your 60s can smooth out your taxes and leave more room later.
Use a younger spouse’s age
Basing the minimum on your spouse’s age means you are required to withdraw less.
Split pension income
At 65 or older, you can split up to half your RRIF income with your spouse to lower your combined tax.
Protect your OAS
Planning your withdrawals can keep your income below the OAS clawback threshold.
Move surplus to a TFSA
Don’t need the full minimum? Put the after-tax amount in your TFSA to keep it growing tax-free.
Learn more →Name your beneficiaries
Naming your spouse as successor annuitant lets the RRIF continue for them without tax at your death.
Learn more →Frequently asked questions
Do I have to withdraw in the year I open my RRIF?
No. There is no minimum withdrawal in the year you open the RRIF. Minimums start the following year.
Is tax withheld from RRIF withdrawals?
No tax is withheld on the minimum amount. Withholding tax applies only to amounts above the minimum, but all withdrawals are taxable income.
Can I still contribute to an RRSP after 71?
Not to your own RRSP, but if you have room and a younger spouse, you can contribute to a spousal RRSP until the end of the year they turn 71.
What happens to my RRIF when I die?
If your spouse is named successor annuitant, the RRIF continues for them tax-free. Otherwise, the value is usually taxed on your final tax return before it passes to your beneficiaries.
Talk to Devendra Kumar, Financial Planner (CLU, CHS)
DK Insurance & Investment Inc. serves families across the GTA from offices in Vaughan, Mississauga and Brampton. Call or text +1-647-761-0517 for a free, no-obligation conversation.