Key Deadlines
| Milestone |
Timing |
| Must convert RRSP |
By Dec 31 of year you turn 71 |
| Last contribution |
Year you turn 71 |
| First RRIF withdrawal |
Year after conversion |
| Annual minimums begin |
At 72 |
RRSP to RRIF Timeline
Standard Path
| Age |
Event |
| 71 |
Can still contribute (if contribution room) |
| 71 |
Must convert by year end |
| 72 |
First mandatory minimum withdrawal |
| 72+ |
Annual minimum withdrawals |
Example Timeline
| Date |
Action |
| January (71) |
Make final RRSP contribution |
| Throughout 71 |
Can open RRIF anytime |
| December 31 (71) |
Deadline for conversion |
| 2026 (72) |
Minimum withdrawal required |
RRIF Minimum Withdrawals
Minimum Withdrawal Rates
| Age |
Minimum % |
On $500,000 |
| 71 |
5.28% |
$26,400 |
| 72 |
5.40% |
$27,000 |
| 75 |
5.82% |
$29,100 |
| 80 |
6.82% |
$34,100 |
| 85 |
8.51% |
$42,550 |
| 90 |
11.92% |
$59,600 |
| 94+ |
20.00% |
$100,000 |
Understanding Minimums
| Rule |
Details |
| Minimum is mandatory |
Must withdraw at least this |
| Maximum |
No limit |
| Withdrawals taxable |
Added to income |
| Can withdraw in-kind |
Securities, not just cash |
| Spouse’s age |
Can use younger spouse’s age |
When to Convert Early
Before 71 - Reasons to Convert
| Situation |
Benefit |
| Need income |
RRIF provides regular payments |
| Pension splitting |
Split RRIF income at 65+ |
| Lower OAS clawback |
Spread income over more years |
| Estate planning |
Named beneficiaries |
| Health concerns |
Simplify finances |
Pension Income Splitting
| Rule |
Details |
| Age 65+ |
Can split up to 50% of RRIF income |
| Benefit |
Lower family taxes |
| Works best |
When spouses in different brackets |
Example: Splitting at 65
| Without Splitting |
With Splitting |
| Spouse A: $80,000 |
Spouse A: $55,000 |
| Spouse B: $30,000 |
Spouse B: $55,000 |
| Tax: ~$26,000 |
Tax: ~$21,000 |
| Savings |
~$5,000 |
Why Wait Until 71
Benefits of Delaying
| Benefit |
Explanation |
| Tax-deferred growth |
More years compounding |
| Flexibility |
Can withdraw any amount |
| No minimums |
No forced withdrawals |
| OAS timing |
Less clawback risk |
| Other income |
Use other sources first |
When Waiting Makes Sense
| Situation |
Why Wait |
| Still working |
Have employment income |
| Good pension |
Don’t need RRSP yet |
| Other savings |
TFSA, non-reg available |
| Lower future income |
Tax rate may be lower |
RRIF Conversion Strategy
Year Before 71
| Action |
Reason |
| Make final contribution |
Last chance |
| Review portfolio |
Prepare for withdrawals |
| Calculate future income |
Plan withdrawal strategy |
| Consider annuity vs RRIF |
Evaluate options |
At Conversion
| Decision |
Options |
| RRIF |
Most flexibility |
| Life annuity |
Guaranteed income |
| Some to each |
Split approach |
| Lump sum |
Rarely advisable |
Tax Implications
RRIF Withdrawals are Taxable
| Income Level |
Marginal Rate (ON) |
| $0-$51,000 |
~20-25% |
| $51,000-$102,000 |
~30-35% |
| $102,000-$155,000 |
~37-43% |
| $155,000+ |
~45-53% |
OAS Clawback
| Income |
OAS Impact |
| Under $90,997 (2025) |
Full OAS |
| $90,997-$148,451 |
15% clawback |
| Over $148,451 |
OAS fully clawed back |
Meltdown Strategy
| Strategy |
How It Works |
| RRSP meltdown |
Withdraw before 71 |
| Why |
Stay in lower brackets |
| Benefit |
Reduce OAS clawback |
| Trade-off |
Pay tax earlier |
RRIF Alternatives
RRSP Conversion Options
| Option |
Features |
| RRIF |
Most flexible, minimums |
| Life annuity |
Guaranteed income, no control |
| Term annuity |
Fixed period payments |
| Lump sum |
Rarely advisable |
Annuity Considerations
| Pros |
Cons |
| Guaranteed income |
No flexibility |
| No market risk |
Inflation risk |
| Simplicity |
No estate value |
| Longevity protection |
Rates vary |
Using Spouse’s Age
Younger Spouse Rule
| Your Age |
Spouse Age |
Use Rate |
| 72 |
65 |
65-year rate lower |
| 75 |
70 |
70-year rate lower |
| 80 |
75 |
75-year rate lower |
Benefit Example
| Age |
Your Rate |
Using Spouse 65 |
Difference |
| 72 |
5.40% |
4.00% |
-1.40% |
| 75 |
5.82% |
4.00% |
-1.82% |
| 80 |
6.82% |
4.76% |
-2.06% |
On $500,000: Saves $7,000-$10,000/year in forced withdrawals.
Conversion Checklist
Before Converting
| Task |
Done |
| ☐ Review all income sources |
|
| ☐ Project future taxes |
|
| ☐ Check OAS impact |
|
| ☐ Consider pension splitting |
|
| ☐ Name beneficiaries |
|
| ☐ Choose investment strategy |
|
At Conversion
| Task |
Done |
| ☐ Convert before Dec 31 deadline |
|
| ☐ Set up payment schedule |
|
| ☐ Update tax withholding |
|
| ☐ Plan first year withdrawal |
|