A Registered Retirement Income Fund (RRIF) is one of the most flexible investment vehicles for retirement, and the best retirement income option because it can be tailored to meet an individual’s needs.  The Income Tax Act states that an RRSP will mature on December 31 of the year in which the investor reaches the age of 71.

RRIFs are the most popular option for converting RRSPs, and this is because a RRIF is like a continuation of one’s RRSP where the funds remain tax sheltered, and the annuitant continues to choose how the funds are invested. But instead of putting money into a RRSP, the RRIF is designed to pay money out as retirement income for you to live on.  It is a vehicle for tax deferral similar to an RRSP, and they are subject to the same rules regarding qualified investments and the 30% foreign property limit as RRSPs.

You may not make any new tax-deductible contributions to a RRIF. Once a RRIF is established, the annuitant is required to withdraw a minimum amount every year which is based on the annuitant’s age or the annuitant’s spouse’s age.  There is nothing to stop you from taking more than the minimum. However, if you do, any excess will be subject to withholding tax and will be taken into account when calculating your tax payable when filing your annual return.

Taxes on RRIF withdrawals

RRIF withdrawal

All Provinces


1 Up to $5,000 10% 21%
2 $5,001 – $15,000 20% 30%
3 Over $15,000 30% 35%

The withholding taxes are the same as for RRSP withdrawals.  All RRIF withdrawals must be reported on the annuitant’s income tax return for the year in which the withdrawal was made.  The tax will be payable at the annuitant’s marginal tax rate.

Systematic withdrawal plans (SWPs) are used in conjunction with RRIFs.  The systematic withdrawal plans enable investors to automatically receive payments from their RRIF accounts on the dates they desire.  Investors have the choice to receive only the minimum amount for each year so that no withholding tax will be applied.  The payments can be a direct deposit into the investor’s bank account or sent to the investor by cheque.

Upon the death of the annuitant, if the surviving spouse is the beneficiary on the RRIF, the assets of the plan may be transferred to the spouse’s RRIF on a tax deferred basis.  If the surviving spouse is under the age of 71, the RRIF assets may also be transferred to an RRSP.

A child or grandchild may also be name as a beneficiary of a RRIF.  However, if the child or grandchild was financially dependent on the deceased annuitant, the funds in the RRIF may be used to purchase an annuity that must end by the time the child or grandchild reaches the age of 18.


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