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Wealth management

3 concepts for understanding RRIFs

August 24, 2023

You’ve been saving during your working years, and now it’s time to think about how you can maximize your retirement income. Whether you’re converting your registered retirement savings plan (RRSP) into a registered retirement income fund (RRIF), withdrawing from your RRIF or updating your investment strategies, you’re going to want to know more about the whole process.

Why should you use a RRIF as a retirement income vehicle? It’s a simple and flexible solution! You don’t have to choose a fixed withdrawal amount and stick with it. You can decide how much you want to withdraw based on your goals, your withdrawal strategies and your changing needs—as long as you make the minimum required withdrawal each year.

1. Conver­sion

Retirement is generally when you should start thinking about converting your RRSP to a RRIF. To help you, here are some things you should know:

  • You can convert your RRSP whenever you want—even before you retire. But you must convert it by no later than the end of the year in which you turn 71. That’s when it’s time to stop contributing to your RRSP and start drawing retirement income from a RRIF.
  • If you’ve already converted your RRSP into a RRIF but your needs have changed, you could convert it back to an RRSP so that you won’t have to make the minimum annual withdrawal each year (see Withdrawals below for more details on the required annual withdrawal). But you can only do this until you turn 71.
  • You can convert your RRSP to a RRIF and keep your existing investments if they’re still in line with your investment strategy. It’s a simple plan conversion that doesn’t involve selling your investments.


  • If you need to withdraw money regularly and not only occasionally, you should convert your RRSP before you turn 71. Otherwise, you can stick to making RRSP withdrawals so that you don’t have to make the required minimum withdrawal from your RRIF each year.
  • If you’re over 65 and aren’t receiving a pension from an employer, you could include RRIF withdrawals in your retirement income strategy so you can claim the federal and provincial pension income tax credits.

2. With­drawals

Your age, your portfolio value and how much income you need will affect your RRIF withdrawal amount and payout strategy. Here’s what you need to know:

  • You can withdraw the annual amount as a lump-sum payment or as regular payments.
  • You can withdraw all the funds from your RRIF in a single year. But remember that you’ll need to pay tax, because the money you withdraw will be added to your taxable income the year you take it out.
  • Your annual minimum withdrawal percentage gradually increases with age. For example, at age 71, you’ll have to withdraw 5.28% of your portfolio’s value; at age 82, it’s 7.38%.
  • The minimum withdrawal amount will be calculated based on your portfolio’s value on January 1 and the payout percentage for your age.
  • These rules apply to all of your RRIFs, if you have more than one.


  • If your RRIF isn’t your main source of income, it’s best to wait until the end of the year to make the required minimum withdrawal. That gives you a few more months to accumulate non-taxable earnings.
  • If you want to withdraw less than the minimum amount for your age and your spouse is younger than you, you can use their age to calculate the minimum amount you’re required to withdraw. Since the rate goes up with age, the taxable withdrawal amount will be lower.


At the time of conversion, you can indicate your spouse’s age (64) on the form instead of your age (71).

That means you’ll be required to withdraw 3.85% of your RRIF balance instead of 5.28% for the year. The required withdrawal percentage will increase each year based on the age of the younger spouse. Your retirement savings will last longer, and you can defer tax on this income.

3. Invest­ments

All the money in your RRIF will continue to grow tax-free until you take it out.

If you’re converting RRSPs from a number of financial institutions to a RRIF, it’s a good time to review your portfolio and consolidate your investments. Not only will you get a better overview of your investments, but it will also be easier for you to decide how much you’re going to withdraw each year and from which investments.


  • Update your investor profile with your advisor to make sure that the investment products are still right for you and meet your needs.
  • There are a number of investment options available for RRIFs. Since you’ll be making withdrawals over a long period (maybe for decades!), you’re going to need to keep growing your money by choosing investment products that are right for your investor profile. That way, you’ll be able to make sure your retirement savings last.

If you want to reduce your tax bill, it’s important to have a detailed plan for managing your investments and retirement income. Speak to your advisor about setting up investment and payout strategies that meet your needs.