12 Critical RRIF Facts Canadians Must Know

1) RRSP → RRIF Conversion Deadline

Convert 100% of RRSPs to a RRIF by December 31 of the year you turn 71. You may convert earlier if it suits your plan.

2) Withdrawals Begin the Following Year

Mandatory RRIF withdrawals start in the year you turn 72. You may take income earlier if you have already converted.

3) Minimum Withdrawals Increase with Age

For age under 71, the factor is 1 ÷ (90 – age). From age 71+, fixed percentages apply. Examples:

Minimums are based on the January 1 (or prior December 31) value across your RRIF accounts.

4) Electing a Younger Spouse’s Age

You may irrevocably elect a younger spouse/partner’s age when establishing the RRIF to permanently lower the minimum percentage.

5) Taxation of RRIF Withdrawals

RRIF payments are fully taxable as ordinary income. Effective planning often staggers withdrawals to manage brackets and avoid benefit clawbacks.

6) Withholding Tax Above the Minimum

Amounts taken over the annual minimum are typically subject to source withholding (commonly 10%, 20%, or 30% by tier). Final tax is reconciled on filing.

7) Broad Investment Flexibility

Depending on the provider, a RRIF may hold GICs, bonds, ETFs, mutual funds, and equities. Align the mix with risk tolerance, time horizon, and liquidity needs.

8) Beneficiaries & Estate Planning

On death, RRIF assets can pass tax-deferred to a spouse/partner. Transfers to other beneficiaries are generally taxable to the estate or deceased’s final return. Coordinate designations with your will and executor processes.

9) Early RRIF Withdrawals & Strategic Uses

You may convert and draw before 71 to: (a) access the $2,000 pension income amount from age 65; (b) smooth lifetime taxes via a measured RRSP/RRIF “meltdown”; or (c) fund TFSA contributions after paying tax.

10) Government Benefits Interaction (OAS, GIS)

Higher RRIF income can trigger OAS clawback. Projections help time and size withdrawals to preserve benefits where possible.

11) Transfers, Consolidation, and In-Kind Moves

You may hold multiple RRIFs, transfer between institutions, and often transfer in kind (without selling). Many retirees later consolidate to simplify administration.

12) In-Kind Withdrawals to Non-Registered/TFSA

When meeting the annual minimum, you may withdraw securities in kind rather than selling to cash. Taxes still apply to the fair market value, but you retain the investment and can contribute eligible amounts to a TFSA thereafter.