Diversifying your RRIF investments

You can hold a number of different savings and investment products in your RRIF without restriction: bonds, market-linked guaranteed investments, mutual funds, stocks, etc.

Before investing, you should identify 4 things:

• your financial objectives
• the desired rate of return
• the investment horizon (when you need the money)
• your tolerance for market fluctuations

Since you must withdraw a minimum amount from your RRIF each year, you need to make sure it contains enough short-term investments. The rest can be invested in the medium to long term.

Pay less tax, too!

Make sure you put any interest-generating investments in your RRIF, as this type of income is fully taxable. A registered plan like the RRIF enables you to defer taxes on that income until retirement, when your tax rate could be lower.

However, investments that produce dividends, or even capital gains, should be held in the non-registered portion of your portfolio as this type of income is already taxed at a lower rate.

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