What is the best age to convert RRSP to RRIF?

Conversion is mandatory by December 31 of the year you turn 71. However, partial conversion in your 60s—especially at 65 to access the pension income credit and income splitting—often reduces lifetime taxes.

How do CPP and OAS affect RRIF withdrawals?

CPP and OAS provide a base of guaranteed income. Coordinating them lets you lower registered withdrawals, smooth taxable income, and reduce OAS clawback risk.

Can RRIF income be split between spouses in Ontario?

Yes. Eligible RRIF income at age 65+ may be split with a spouse or common-law partner to balance incomes and lower combined tax.

What is the pension income tax credit?

From age 65, the first $2,000 of eligible pension income (including RRIF withdrawals) qualifies for a non-refundable federal credit, with provincial credits also available.

How does this plan help avoid OAS clawback?

Early, steady withdrawals reduce large RRIF balances later, preventing forced minimums from pushing income above the OAS recovery threshold.

RRSP to RRIF Strategy in Canada: $2M Couple Drawing $70,000 Each (CPP & OAS Included)

The $2 Million Retirement Story

Meet John and Mary—both 60, both retired, each with $1,000,000 in an RRSP. Their shared aim is straightforward: maintain a comfortable lifestyle with $70,000 per person before tax, while minimizing taxes and preserving capital through age 90.

Key idea: do not wait for large, forced RRIF minimums at 71. Instead, smooth income early, use CPP/OAS strategically at 65, and fully convert by 71.

Step-by-Step Plan

Phase 1 — Ages 60–64: RRSP Draws

Withdraw $70,000 per person per year from RRSP.
Keep the rest invested; growth continues at the assumed 6%.
Purpose: fill modest tax brackets now and shrink future mandatory withdrawals.

Phase 2 — Age 65: Turn On CPP & OAS, Create a RRIF Bucket

Both start full CPP and full OAS (≈ $24,000 per person per year).
Convert $276,000 from each RRSP to a RRIF.
From 65–70, withdraw $46,000 per person from RRIF; CPP+OAS completes the $70,000 target.
Benefits: pension income credit (first $2,000) and RRIF income splitting at 65+ in Ontario.

Phase 3 — Age 71: Full Conversion & Minimums

By December 31 of the year they turn 71, convert all remaining RRSP to RRIF.
From 71+, withdraw the greater of $46,000 or the RRIF minimum; invest any surplus to TFSA or non-registered.

Concrete Amounts (Per Person)

Age	Action	Annual Source	Amount	Notes
60–64	Withdraw	RRSP	$70,000/yr	Smooth taxable income; portfolio still grows.
65	Convert	RRSP → RRIF	$276,000	Sets up six years of RRIF draws.
65–70	Withdraw	RRIF	$46,000/yr	CPP+OAS ≈ $24,000 completes $70,000 target.
71+	Withdraw	RRIF	max($46,000, minimum)	Reinvest excess in TFSA or non-registered.

Indicative RRIF minimums (from ~$970,000 at 71, per person): 71 ≈ $51k; 75 ≈ $56k; 80 ≈ $65k; 85 ≈ $73k; 90 ≈ $83k. Early smoothing reduces OAS clawback risk.

Why This Works

Income smoothing: avoids post-71 tax spikes.
Credits & splitting: RRIF income at 65+ accesses the pension credit and spousal splitting.
CPP/OAS coordination: pensions lower the required registered draw.
Capital preservation: forced excess after 71 can be reinvested efficiently.

This is a planning framework. Actual tax results depend on personal circumstances. Consider personalized advice.

Disclaimer: Educational only; not financial or tax advice. Consult a qualified professional for personalized planning.

RRSP → RRIF Blueprint in Ontario: $2M Couple Drawing $70,000 Each