The year you turn 71 is the last year you can hold your own RRSP. By December 31 it has to become a RRIF, buy an annuity, or be cashed out. This page covers that deadline, the options, the last contribution, and a checklist for the rest of the year’s financial housekeeping. How the conversion itself works is in the RRSP to RRIF conversion guide, and whether to convert earlier than 71 is covered in the best time to convert an RRSP to a RRIF. Every RRIF, LIF and LIRA guide is in the RRSP and RRIF guide directory.
The December 31 deadline and why it is firm
- The deadline is December 31 of the year you turn 71.
- Transfer it to a RRIF (no immediate tax).
- Use it to buy an annuity (no immediate tax).
- Or withdraw it: tax is withheld and the full amount is income for that year.
CRA’s rule is simple: an RRSP cannot exist past December 31 of the year you turn 71.
If you take no action:
- The plan can be deregistered
- You are treated as having received the fair market value of everything it held at the time it stopped being an RRSP, all of it taxable income
- There is no spreading: the full amount is taxed in one year
- Most of a large balance ends up taxed in the upper brackets, because it all lands in one year
Institutions need time to process a conversion, so starting well before December 31 leaves room for delays.
Your three options at 71
| Option | Description | Best For |
|---|---|---|
| Convert to RRIF | RRSP becomes a RRIF; investments stay invested; minimum withdrawals required annually | Most retirees; maintains investment growth and flexibility |
| Purchase a life annuity | RRSP proceeds used to buy a guaranteed income stream for life from an insurance company | Those who want certainty and have no desire to manage investments |
| Lump-sum withdrawal | Take all or part as cash; entire amount taxed as income in that year | Mainly small balances, since all of it is taxed at once |
Combining options is possible. You can convert part of your RRSP to a RRIF and purchase an annuity with another portion.
Option 1: Converting to a RRIF
A Registered Retirement Income Fund (RRIF) is essentially an RRSP in reverse: the investments stay invested, but you must withdraw a minimum amount each year.
How RRIF minimum withdrawals work
From the year after you open a RRIF, you must withdraw at least the year's minimum: the January 1 balance times a factor for your age at the start of the year (or your spouse's age, if you choose), which is 1 ÷ (90 − age) up to 70 and CRA's prescribed factor from 71; you can always take more.A RRIF has no minimum in the year it is opened, so converting in the year you turn 71 means the first required withdrawal comes the next year. It is a prescribed percentage of the January 1 balance, set by your age at the start of that year. You turn 72 during that year but are normally still 71 on January 1, so the first minimum is usually 5.28% of the balance (the age-71 factor), rising every year after. The percentage for every age, with dollar examples, is in the RRIF minimum withdrawal table.
Using a younger spouse’s age: If your spouse is younger, you can elect to base minimum withdrawals on their age, which results in a lower minimum withdrawal each year. The election is made when the RRIF is set up.
RRIF conversion mechanics
| Step | Details |
|---|---|
| Contact your financial institution | Request RRIF conversion, it does not require selling investments |
| Investments transfer in kind | No need to sell and rebuy; your RRSP portfolio simply moves to the RRIF |
| No tax triggered at conversion | The conversion itself is not a taxable event |
| Set up automatic minimum withdrawal | Your institution can do this automatically each year |
| Choose payment frequency | Annual, semi-annual, quarterly, or monthly withdrawals (minimum total applies regardless of frequency) |
→ See: RRSP to RRIF Conversion Guide | RRIF Minimum Withdrawal Table Canada
Option 2: Life annuity
A life annuity converts your lump sum into a guaranteed income stream for life, purchased from an insurance company.
| Annuity Feature | Detail |
|---|---|
| Payment guarantee | Payments continue for your lifetime regardless of how long you live |
| Investment risk | Carried by the insurer; payments are set by the contract |
| Flexibility | None, once purchased, you cannot access the capital |
| Survivor options | Joint-and-survivor annuities provide continuing payments to a spouse |
| Guarantee period | Some annuities guarantee payments for a minimum period (e.g., 10 years) even if you die earlier |
| Inflation protection | Available at higher cost: payments can be set to increase over time |
When an annuity could make sense: if you have minimal CPP/OAS relative to your expenses, have a family history of longevity, or want to eliminate investment management decisions in retirement.
→ See: Annuity vs RRIF | Annuity Calculator
Tax planning after conversion
The RRIF forces an annual withdrawal that is fully taxable. With careful planning, you can minimize the lifetime tax on your RRSP/RRIF.
Strategy 1: Early RRIF conversion (before 71)
Converting your RRSP to a RRIF before 71, even in your early 60s, allows you to take withdrawals in a deliberate, low-income year before CPP and OAS begin. This “RRSP meltdown” strategy reduces the RRIF balance that will be forced out in later years when combined income (RRIF + CPP + OAS + other pension) may push you into higher tax brackets.
| When RRIF Conversion Before 71 Could Make Sense | Why |
|---|---|
| You retire before 65 and have low income years | Withdraw RRIF in low-rate gap years |
| Your projected total retirement income is very high | Reduce future RRIF forced withdrawals |
| Your OAS clawback risk is significant | Reduce RRIF balance before OAS begins |
Strategy 2: Pension income splitting
You can allocate up to 50% of your eligible pension income to your spouse or common-law partner with a joint election on Form T1032 filed with both returns, if you were both Canadian residents on December 31 and were not living apart because of a relationship breakdown for 90 days or more including December 31; RRIF (including LIF) and RRSP annuity payments count only if you are 65 or older at the end of the year (or received them because your spouse died), and OAS and CPP/QPP never count.Example: $50,000 in RRIF income, with the maximum 50% ($25,000) split to a spouse, means each of you reports $25,000 instead of one spouse reporting the full $50,000. If the receiving spouse is in a lower bracket, the combined household tax is less.
→ See: Pension Income Splitting Guide Canada
Strategy 3: OAS clawback planning
OAS is reduced by 15 cents per dollar of net income above the recovery threshold ($93,454 of 2025 net income, for the July 2026 to June 2027 recovery period; the threshold is indexed every year). RRIF withdrawals count as income; see the OAS clawback.
| Action | Benefit |
|---|---|
| Reduce RRIF balance before OAS starts | Smaller mandatory minimum in OAS years |
| Withdraw from TFSA instead of RRIF where possible | TFSA withdrawals do not count as income, no OAS impact |
| Delay OAS to 70 | 7.2% per year increase (up to 36% more at 70) |
→ See: OAS Clawback and How to Reduce It
Last RRSP contribution at 71 and the spousal RRSP exception
The last year you can contribute to your own RRSP is the calendar year you turn 71. You can make the final contribution in December of that year (and still have the account to convert by December 31).
Important: You can contribute to a spousal RRSP as long as your spouse is 71 or younger on December 31 of the year you contribute, even after your own RRSP is closed. If you are 71 and your spouse is 66, you can keep making spousal RRSP contributions each year until December 31 of the year your spouse turns 71, using any RRSP room you still carry from prior years.
→ See: Spousal RRSP Guide | Best Time to Convert RRSP to RRIF
Checklist for the year you turn 71
| ☐ | Task | Timing |
|---|---|---|
| ☐ | Decide: RRIF, annuity, or combination | October–November |
| ☐ | Contact financial institution to begin conversion process | Well before December 31 |
| ☐ | Elect to use spouse’s age for RRIF minimum withdrawals (if beneficial) | At time of RRIF setup |
| ☐ | Set up automatic minimum annual withdrawal | At time of RRIF setup |
| ☐ | Make final RRSP contribution if you have room | Before December 31 |
| ☐ | Review spousal RRSP contribution opportunity | Before December 31 |
| ☐ | Confirm RRIF conversion is complete before December 31 | By December 31 |
| ☐ | Review withholding on RRIF withdrawals | January of the following year |
| ☐ | Apply for CPP if not already receiving it | Now: there is no increase for starting after 70 |
| ☐ | Apply for OAS if not already receiving it (most people are enrolled automatically) | Now: the deferral increase stops at 70 |
Beyond the RRSP: the rest of the age-71 checklist
The conversion deadline is a natural point to review the rest of a retirement plan.
- Cash for withdrawals. Some retirees keep one to two years of planned withdrawals in cash or short-term investments inside the RRIF, so a withdrawal doesn’t force a sale in a down market.
- Withholding. Tax is not withheld on the minimum amount, but it is on anything above it; the rates are in the RRIF withdrawal rules.
- Beneficiaries on the new RRIF. Confirm a successor annuitant or beneficiary on the RRIF itself; see RRIF successor annuitant vs beneficiary.
- Estate documents. Review the will, powers of attorney for property and personal care, and designations on every account.
- OAS at 75. The OAS pension rises by 10% automatically once you turn 75.
- GIS. RRIF withdrawals count as income for the Guaranteed Income Supplement, so larger withdrawals can reduce GIS.
- Long-term care. Consider how care at home or in a facility would be paid for, and whether insurance is part of the plan.
Related reading
Sources
The figures and rules on this page come from these sources, last checked against them between August 29, 2026 and September 29, 2026. How we check facts.
- Canada Revenue Agency: Chart – Prescribed factors
- Canada Revenue Agency: Pension income splitting
- Canada Revenue Agency: RRSPs and Other Registered Plans for Retirement
- Canada Revenue Agency: How contributions affect your RRSP deduction limit
- Government of Canada: Old Age Security pension recovery tax
- Government of Canada: Old Age Security - When to start your retirement pension
- Government of Canada: CPP: When to start your retirement pension
- Justice Laws (Canada): Income Tax Act