What Is a RRIF?
Registered Retirement Income Fund
| Feature |
Details |
| Purpose |
Provide retirement income |
| Tax status |
Tax-deferred growth |
| Withdrawals |
Minimum required annually |
| Withdrawals taxed |
As regular income |
| Conversion |
From RRSP |
RRIF vs. RRSP
| RRSP |
RRIF |
| Contribution phase |
Withdrawal phase |
| No mandatory withdrawals |
Minimum withdrawals required |
| Contribution limit |
No contributions |
| End by age 71 |
Starts after conversion |
When to Open a RRIF
Mandatory Timeline
| Age |
Requirement |
| Before 71 |
Can convert anytime |
| During year turn 71 |
Must convert by Dec 31 |
| Options |
RRIF, annuity, or lump sum |
Strategic Timing
| Situation |
Consider Converting |
| Need income |
When income needed |
| Low income year |
May reduce taxes |
| Still working |
Maybe wait |
| Spouse younger |
Use their age |
Opening a RRIF: Step by Step
| Document |
Why Needed |
| Government ID |
Identity verification |
| RRSP account details |
Source of funds |
| SIN |
CRA reporting |
| Beneficiary info |
Name, SIN, DOB, relationship |
| Option |
Process |
| Same institution |
Simple conversion |
| New institution |
Transfer + conversion |
| In person |
Most support |
| Online |
Major banks, robo-advisors |
| Phone |
Schedule appointment |
Step 3: Complete Paperwork
| Form |
Purpose |
| RRIF application |
Open new account |
| Transfer authorization |
Move funds from RRSP |
| Beneficiary designation |
Name beneficiaries |
| Spouse age election |
If using younger spouse |
| Withdrawal schedule |
How much, how often |
Step 4: Set Up Withdrawals
| Decision |
Options |
| Amount |
Minimum or more |
| Frequency |
Monthly, quarterly, annual |
| Method |
Deposit to account, cheque |
| Tax withholding |
None on minimum, rates on excess |
Step 5: Investment Selection
| Option |
Consideration |
| Transfer in-kind |
Keep same investments |
| Reallocate |
May want safer mix |
| Investment type |
GICs, ETFs, mutual funds |
Choosing Where to Open
Types of RRIF Providers
| Provider |
Best For |
| Major banks |
Full service, branches |
| Credit unions |
Local service |
| Online brokers |
Self-directed, low fees |
| Robo-advisors |
Managed, low cost |
| Insurance companies |
Annuity options |
Fee Comparison
| Provider Type |
Typical Fees |
| Bank full-service |
1-2%+ MER |
| Bank self-directed |
$0-$10/trade |
| Online broker |
$0-$10/trade |
| Robo-advisor |
0.4-0.5% |
Considerations
| Factor |
Questions |
| Service level |
How much help needed? |
| Fees |
What are total costs? |
| Investments |
What options available? |
| Withdrawals |
How flexible? |
| Location |
Branch access important? |
Setting Up Withdrawals
Minimum Withdrawal Rates
| Age |
Minimum % |
| 65 |
4.00% |
| 70 |
5.00% |
| 71 |
5.28% |
| 75 |
5.82% |
| 80 |
6.82% |
| 85 |
8.51% |
| 90 |
11.92% |
| 95+ |
20.00% |
Withdrawal Frequency Options
| Frequency |
Pros |
Cons |
| Monthly |
Regular income |
More transactions |
| Quarterly |
Less admin |
Lumpy income |
| Annual |
Maximum growth |
Large single payment |
Tax Withholding
| Amount Over Minimum |
Withholding |
| Minimum only |
None |
| Up to $5,000 |
10% |
| $5,001-$15,000 |
20% |
| Over $15,000 |
30% |
Quebec rates differ.
Beneficiary Designation
Options
| Designation |
Result |
| Spouse/CLP |
Tax-free rollover |
| Adult child |
Taxable to estate |
| Minor child/grandchild |
May have options |
| Estate |
Taxable to estate |
Successor Holder (Spouse)
| Benefit |
Details |
| What happens |
RRIF continues |
| Tax |
None at death |
| Spouse continues |
Withdrawals |
| Spouse’s age |
Can use for minimum |
Younger Spouse Election
Using Spouse’s Age
| When to Decide |
At RRIF creation |
| Benefit |
Lower minimum withdrawals |
| Requirement |
Spouse exists at setup |
| Irrevocable |
Can’t change later |
Example Impact
| Your Age |
Your Minimum |
Spouse Age 60 |
| 71 |
5.28% |
3.85% |
| 75 |
5.82% |
4.35% |
| 80 |
6.82% |
5.00% |
Lower withdrawals = more tax-deferred growth.
Converting RRSP to RRIF
Transfer Options
| Option |
Result |
| In-kind transfer |
Keep investments |
| Sell and transfer cash |
Simplifies |
| Partial conversion |
Some to RRIF, some other |
In-Kind Transfer
| Benefit |
Details |
| No selling |
Avoid timing market |
| No fees |
No trade costs |
| Seamless |
Same investments |
| Rebalance later |
If desired |
RRIF Investment Strategies
Age-Appropriate Allocation
| Age |
Stock % |
Bond/Fixed % |
| 65-70 |
40-60% |
40-60% |
| 70-80 |
30-50% |
50-70% |
| 80+ |
20-40% |
60-80% |
Income-Focused Options
| Investment |
Yield |
Risk |
| GICs |
3-5% |
Low |
| Bond ETFs |
3-5% |
Low-Med |
| Dividend ETFs |
3-5% |
Medium |
| Balanced funds |
Varies |
Medium |
Withdrawal Management
| Strategy |
Approach |
| Interest/dividends |
Withdraw income first |
| Systematic |
Sell proportionally |
| Bucket |
Cash + growth portions |
Multiple RRIFs
Rules
| Rule |
Details |
| Number allowed |
Unlimited |
| Minimum applies |
Each RRIF separately |
| Flexibility |
Withdraw from any |
| Consolidation |
May simplify |
Why Multiple RRIFs
| Reason |
Benefit |
| Different strategies |
GIC + stocks separate |
| Simplify beneficiaries |
One per beneficiary |
| Different institutions |
Compare service |
After Opening Your RRIF
Annual Tasks
| Task |
When |
| Review withdrawal amount |
End of year |
| Confirm minimum met |
December |
| Update beneficiaries |
As needed |
| Rebalance investments |
Annually |
Tax Planning
| Strategy |
Purpose |
| Withdraw only minimum |
Maximize deferral |
| Exceed minimum strategically |
Manage tax brackets |
| Coordinate with OAS |
Avoid clawback |
| Consider TFSA |
Shelter withdrawals |