A Registered Retirement Income Fund (RRIF) is one of the options that investors are able to consider when they collapse their Registered Retirement Savings Plan (RRSP) which must take place before the end of the calendar year in which they turn age 71 (you can also choose to invest in an Annuity). The first withdrawal takes place in the year following the year the plan is set up. A RRIF can hold the same type of investments as an RRSP and the contents of an RRSP can be rolled over seamlessly into an RRIF.
RRIFs act like a RRSP in reverse. Similar to an RRSP, RRIFs grow tax-deferred but unlike an RRSP, investors are required to withdraw at least the annual minimum payment required under the Income Tax Act, which is taxable as income.
There are multiple ways to calculate the minimum withdrawal amount, but the most common is for investors aged 71 and over, where the following schedule is followed:
| Age | % | Age | % | Age | % |
| 69 | 4.76 | 78 | 8.33 | 87 | 11.33 |
| 70 | 5.00 | 79 | 8.53 | 88 | 11.96 |
| 71 | 7.38 | 80 | 8.75 | 89 | 12.71 |
| 72 | 7.48 | 81 | 8.99 | 90 | 13.62 |
| 73 | 7.59 | 82 | 9.27 | 91 | 14.73 |
| 74 | 7.71 | 83 | 9.58 | 92 | 16.12 |
| 75 | 7.85 | 84 | 9.93 | 93 | 17.92 |
| 76 | 7.99 | 85 | 10.33 | 94+ | 20.00 |
| 77 | 8.15 | 86 | 10.79 |
Investors may choose to convert their RRSP earlier if they wish. As well, though investors must withdraw a minimum amount there is no maximum withdrawal amount.
Additional Information:
- Investors are able to choose how often they would like to receive their payments. For example, frequencies include monthly, quarterly, semi-annually and even annually
- One of the easiest methods of minimizing the tax rate paid on RRIF withdrawals is to reduce the minimum amount. Investors will need to balance the desire for tax minimization with their desire to maintain their standard of living
- Unless the RRIF is passed onto a surviving spouse or a financially dependent child or grandchild, your death will result in the entire value of the RRIF being included in your final tax return
Our financial advisors will work with you to create a Registered Retirement Income Fund plan that considers your personal circumstances, long-term needs and risk tolerance.
