What You Need To Know About RRIFs

When it's time to convert your RRSP, a RRIF is one of the most popular options.

Visit each of the sections below and see how RRIFs are the most flexible ways to manage and control retirement finances.

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What is a RRIF?

A RRIF is a tax-deferred retirement plan used to generate income from the savings accumulated from your RRSP plan.

Quick facts:

  • The year the plan is opened a payment does not have to be made but any amount may be withdrawn
  • The year after the plan is opened, an annual minimum payment must be taken each year and is considered taxable income
  • Annual minimum payment is determined by the Income Tax Act and is based on your age. (Your own age or your spouse's age can be used to calculate the annual minimum payment. Using the younger of the ages will result in a lower annual minimum payment. This means less money will have to be withdrawn and taken into taxable income for the year and more remains in the RRIF earning tax-sheltered income.)

What investment options are available for my RRIF?

The government requires that everyone with a RRSP, including LRSPs/LIRAs, must convert to one or more retirement income sources by December 31st of the year they turn 71 or earlier.

Quick facts:

  • If the RRSP is not converted, it is considered "deregistered" and the proceeds will be paid out as cash and fully taxed as income

Ready to convert your RRSP? Here are your choices:

  • Convert to a RRIF
    A RRIF is a tax-deffered retirement plan used to generate income from the savings accumulated from your RRSP plan. More details
  • Cash In
    You can take your RRSP as cash, but it will be fully taxable in the year of withdrawal and a large percentage will go to Canada Customs and Revenue Agency.