Do I have to convert my RRSP at age 71?

Yes. You must convert your RRSP to a RRIF, purchase an annuity, or take a lump-sum withdrawal by December 31 of the year you turn 71. You cannot continue contributing to an RRSP past December 31 of the year you turn 71.

Is it better to withdraw RRSP early in retirement or wait?

It depends on your income level. If you expect CPP, OAS, and pension income to push you into a high tax bracket at 71+, drawing down the RRSP earlier at a lower rate can save significant tax. This is sometimes called an RRSP meltdown or RRIF drawdown strategy.

Does RRSP or RRIF income affect OAS?

Yes. RRSP withdrawals and RRIF minimum payments count as taxable income and are included in net income for OAS clawback calculations. If your combined income (CPP + RRIF + pension) exceeds ~$90,997, OAS starts clawing back at 15 cents per dollar.

Should I keep RRSP money or move it to TFSA in retirement?

If you have TFSA room, converting some RRSP to TFSA annually — by withdrawing at a low tax rate and recontributing to TFSA — shelters future growth from both tax and OAS clawback. This requires careful annual income management.

What is the minimum RRIF withdrawal each year?

RRIF minimum withdrawals are calculated as a percentage of your RRIF balance at January 1. At age 72, the rate is 5.40%. It rises each year, reaching 6.82% at 80 and 8.99% at 90. There is no maximum — you can take more than the minimum anytime.

Is It Worth Keeping Your RRSP in Retirement?

Why “Keeping” Your RRSP Has a Deadline

You cannot simply leave your RRSP untouched indefinitely. By December 31 of the year you turn 71, you must either:

Convert your RRSP to a RRIF (most common)
Purchase an annuity
Take a lump-sum withdrawal (taxed immediately)

After conversion, the RRIF forces minimum annual withdrawals — which become mandatory taxable income whether you need the cash or not.

RRIF Minimum Withdrawal Rates

Age	Minimum withdrawal rate	On a $500,000 RRIF, minimum withdrawal
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
95	20.00%	$100,000

At higher ages, large RRIF balances generate more mandatory income than many retirees need — pushing them into higher tax brackets and potentially triggering OAS clawback.

The Core Problem: Forced Income at the Worst Bracket

If you have other income sources in retirement (CPP, OAS, DB pension, rental income), mandatory RRIF withdrawals layer on top and can push you into higher marginal tax rates — especially at ages 80–90 when withdrawal rates are highest.

Example: Retiree at 82 with large RRIF

Income source	Annual amount
CPP	$14,000
OAS	$8,700
DB pension	$30,000
RRIF minimum (on $600,000)	$44,000
Total income	$96,700
OAS clawback	Yes — income exceeds ~$90,997
Marginal tax rate on RRIF withdrawals	~40–43% (Ontario)

If this person had drawn down the RRSP earlier at a lower tax rate, the long-term result would likely be significantly better.

The RRSP/RRIF Meltdown Strategy

An “RRSP meltdown” or “RRIF drawdown” strategy involves intentionally withdrawing from your RRSP/RRIF in early retirement (ages 60–71) to reduce the size of the account before mandatory minimum withdrawals begin.

When this strategy makes sense:

Condition	Reason
You retire before CPP/OAS starts (e.g., age 60–65)	Low income years = lower tax rate on withdrawals
You have TFSA room	Withdraw RRSP, pay tax, recontribute to TFSA (shelters future growth with no clawback impact)
You have a pension that will push income high at 71+	Drawing down early avoids stacking RRIF on pension income
You expect to delay OAS (deferring CPP/OAS to 70)	Low-income bridge period is ideal for RRSP withdrawals

When to leave RRSP untouched:

Condition	Reason
Income is already high every year	No low-rate window to draw down at
No TFSA room and no better deployment for cash	Without a TFSA offset, the withdrawn cash still faces reinvestment inefficiency
RRSP will be left to a surviving spouse	Spousal rollover is tax-deferred at death — leaving it may be fine

RRSP at Death: What Happens

If you die with an RRSP (or RRIF), the full fair market value is added to your income in your year of death — and taxed accordingly. This is the “deemed disposition” rule.

Exceptions that defer tax:

Beneficiary	Tax treatment
Spouse/common-law partner	Full rollover to their RRSP/RRIF — tax deferred until they withdraw
Financially dependent child/grandchild under 18	Can be spread over years via annuity — modest tax deferral
Financially dependent child/grandchild with disability	Full rollover to RDSP — significant tax deferral
All other beneficiaries	Full inclusion in your estate income — no deferral

If your estate is large and no spouse is available for the rollover, the final RRIF can generate a very large tax bill — worth factoring into estate planning.

RRSP vs. TFSA in Retirement: The Switching Strategy

Action	Tax effect
Withdraw from RRSP and spend it	Taxable income that year
Withdraw from RRSP and contribute to TFSA	Taxable in year of withdrawal; future growth and withdrawals tax-free
Withdraw from TFSA	No tax, no OAS impact

For retirees with existing TFSA room, an annual RRSP-to-TFSA conversion (draw modest RRSP amount, stay in low bracket, park in TFSA) is one of the highest-ROI retirement tax moves available.

When It IS Worth Keeping RRSP Intact

Scenario	Logic
You have a spouse in a much lower tax bracket	Spousal RRSP strategy — they withdraw at lower rate
You expect income to drop significantly	Wait for the lower-tax window
Your RRSP is your only asset	No alternative source — preserve it for income need
Estate goes to spouse	Tax-free rollover at death means no immediate cost to waiting

The Income Threshold to Watch

Threshold	Significance
~$16,143 (basic personal amount 2026)	Below this: minimal federal tax
~$35,000–$40,000	First federal bracket edge — efficient RRSP drawdown zone for low-income retirees
~$57,375	Second federal bracket (20.5%) begins
~$90,997	OAS clawback begins
~$111,733	Third federal bracket (26%) begins

The tactical goal of most drawdown strategies is to keep income in the $35,000–$57,000 range during years 60–71, fully using the lower brackets before mandatory RRIF minimums force income higher.