RRIF
The RRSP’s decumulation counterpart — mandatory minimum withdrawals, taxed as income, once you retire.
The basics
A RRIF is what an RRSP becomes when it’s time to draw income from it. You can convert voluntarily earlier, but conversion is mandatory by December 31 of the year you turn 71.
Once converted, no further contributions are allowed — a RRIF is purely a decumulation vehicle. Each year, you must withdraw at least a prescribed minimum amount, which is added to your taxable income.
You choose the investments and the withdrawal amount above the minimum; the account continues to grow tax-deferred on whatever remains inside it.
How much you can put in
No contributions are permitted — money arrives in a RRIF only by transfer from an RRSP (or another RRIF), not by new deposits.
You can convert an RRSP to a RRIF at any age, but it becomes mandatory in the year you turn 71.
RRIF prescribed minimum withdrawal factors by age
| Age (Jan 1) | Minimum withdrawal % |
|---|---|
| 65 | 1 ÷ (90 − age) ≈ 4.00% |
| 71 | 5.28% |
| 72 | 5.40% |
| 75 | 5.82% |
| 80 | 6.82% |
| 85 | 8.51% |
| 90 | 11.92% |
| 95+ | 20.00% |
RRIF tax treatment
| Treatment | |
|---|---|
| Transfer in from RRSP | Tax-free rollover, no new deduction |
| Growth inside the account | Tax-deferred while it remains in the RRIF |
| Withdrawals (minimum and above) | Fully taxed as income in the year withdrawn |
| Effect on income-tested benefits (OAS, GIS) | Withdrawals count as income and can trigger OAS clawback or reduce GIS |
| Withholding tax | Applies only to withdrawals above the annual required minimum |
Watching the minimum climb
RRIF minimum withdrawal rate by age
The percentage of your RRIF's value you're required to withdraw (and pay tax on) climbs every year, sharply after 80.
Based on the CRA prescribed RRIF factor schedule. Your actual minimum is calculated on your RRIF's value at the start of each year.
Getting money out
You must withdraw at least the prescribed minimum each year, calculated as a percentage of the RRIF’s value at the start of the year, based on your age (or your spouse’s, if you elect to use their younger age to reduce the minimum).
There is no maximum — you can withdraw the entire RRIF at once if you choose, fully taxable in that year.
The first year, if you convert partway through the year, no minimum withdrawal is required for that partial first year.
What happens if you go over
Not applicable in the usual sense — you can’t "over-contribute" to a RRIF. The risk runs the other way: failing to withdraw at least the required minimum each year can trigger CRA penalties and interest on the shortfall.
Is this a fit?
- Anyone with RRSP savings reaching age 71, since conversion becomes mandatory
- Retirees who want a structured, government-mandated framework for drawing down retirement savings
- Those who want to convert earlier (before 71) to start splitting RRIF income with a spouse via pension income splitting, available from age 65
How it fits with the rest of your plan
- RRIF withdrawals qualify for pension income splitting with a spouse starting at age 65, which can meaningfully reduce a couple’s combined tax bill.
- The first $2,000 of eligible pension income (which includes RRIF withdrawals from age 65) qualifies for the federal pension income tax credit.
- Because RRIF withdrawals count as income for OAS clawback purposes, some retirees draw down RRSP/RRIF savings earlier and more aggressively (even before 71) specifically to reduce the RRIF balance — and future mandatory withdrawals — before OAS and other income-tested benefits begin.
What trips people up
- Not withdrawing the required minimum in a given year
- Converting the full RRSP to a RRIF exactly at 71 without considering a partial, earlier conversion for income-splitting or benefit-management purposes
- Withdrawing far more than the minimum without a plan, accelerating tax and depleting savings faster than needed
- Not electing to base the minimum on a younger spouse’s age when it would meaningfully reduce required withdrawals and tax
Eligible investments
Cash, GICs, mutual funds, ETFs, individual stocks and bonds, and segregated fund contracts, transferred in from the originating RRSP.
A segregated fund RRIF continues any maturity/death benefit guarantees from the original contract and can allow a named beneficiary to receive proceeds directly, bypassing probate.
Someone converting a $500,000 RRSP to a RRIF at age 71 would need to withdraw at least 5.28% in the first full year — about $26,400 — added to their taxable income for that year, whether or not they need the cash.
Actual outcomes depend on your income, tax situation, and the rules in effect when you contribute or withdraw. Contact Achyut for guidance specific to your situation.