Critical Year 71 Timeline
Key Deadlines
| Deadline |
Action |
| By December 31 |
Last RRSP contribution |
| By December 31 |
Convert RRSP to RRIF |
| Following year |
Start RRIF withdrawals |
Converting RRSP to RRIF
What Happens
| RRSP |
RRIF |
| Contributions allowed |
No contributions |
| No required withdrawals |
Minimum annual withdrawal |
| Tax-deferred growth |
Still tax-deferred |
| Withdrawal anytime |
Minimum required |
Conversion Process
| Step |
Action |
| 1 |
Contact financial institution |
| 2 |
Complete RRIF application |
| 3 |
Choose investments (can stay same) |
| 4 |
Set withdrawal schedule |
Options at 71
| Option |
Details |
| RRIF |
Most common, maintain control |
| Annuity |
Guaranteed income for life |
| Cash out |
Not recommended (full tax) |
| Combination |
RRIF + partial annuity |
Last RRSP Contribution
Final Opportunity
| Contribute |
By December 31 |
| Using |
Any remaining room |
| Age |
Of year turn 71 |
| No more after |
This deadline |
Spousal RRSP Exception
| If Spouse Younger |
Can Continue |
| Contribute to spousal |
Until spouse is 71 |
| Using your room |
If you have earned income |
RRIF Minimum Withdrawals
Required Percentages
| Age |
Minimum % |
| 71 |
5.28% |
| 72 |
5.40% |
| 73 |
5.53% |
| 74 |
5.67% |
| 75 |
5.82% |
| 80 |
6.82% |
| 85 |
8.51% |
| 90 |
11.92% |
| 94+ |
20.00% |
Minimum Withdrawal Examples
| RRIF Balance |
Age 72 |
Age 80 |
Age 90 |
| $200,000 |
$10,800 |
$13,640 |
$23,840 |
| $500,000 |
$27,000 |
$34,100 |
$59,600 |
| $1,000,000 |
$54,000 |
$68,200 |
$119,200 |
Younger Spouse Election
Use Spouse’s Age
| If Spouse Younger |
Benefit |
| Can use their age |
For minimum calculation |
| Lower percentage |
Smaller required withdrawal |
| More tax-deferred |
Growth |
Example
| Your Age |
Spouse Age |
Minimum |
| 72 |
72 |
5.40% |
| 72 |
65 |
4.00% |
| Difference |
|
Significant |
Tax Planning at 71
RRIF Withdrawal Strategy
| Strategy |
Details |
| Take minimum only |
If don’t need more |
| Take extra |
If low income year |
| Smooth withdrawals |
Consistent tax brackets |
| OAS consideration |
Avoid clawback |
Tax Withholding on RRIF
| Withdrawal Amount |
Withholding |
| Up to $5,000 |
10% (20% QC) |
| $5,001-$15,000 |
20% (25% QC) |
| Over $15,000 |
30% (30% QC) |
Note: Minimum doesn’t have withholding unless requested.
RRIF Investment Strategy
Adjust for Age
| At 71 |
Consider |
| Stocks |
40-50% |
| Bonds/GICs |
50-60% |
| Focus |
Income + preservation |
Cash Buffer
| Strategy |
Hold |
| 1-2 years |
Cash for withdrawals |
| Avoid |
Selling in down market |
Pension Income Splitting
Continue at 71
| Already Doing |
Continue |
| RRIF qualifies |
As eligible income |
| Up to 50% |
To lower-income spouse |
| Both must agree |
Joint election |
OAS at 71
Automatic at 75
| Age |
OAS Change |
| 75 |
10% increase |
| Automatic |
No application |
GIS Consideration
| If RRIF Withdrawal |
Affects GIS |
| Counts as income |
May reduce GIS |
| Minimize if |
Receiving GIS |
Estate Planning Review
Update Documents
| Document |
Review |
| Will |
Current? |
| Beneficiaries |
All accounts? |
| Power of attorney |
In place? |
| Healthcare directive |
Updated? |
RRIF Beneficiary
| Naming Beneficiary |
Avoids Probate |
| Spouse |
Tax-free rollover |
| Non-spouse |
Taxable to estate |
| Estate |
Goes through will |
Health Considerations
Long-Term Care Planning
| Factor |
Review |
| Insurance |
Have coverage? |
| Home care |
Cost if needed |
| Facility care |
Average $5,000+/month |
Powers of Attorney
| Type |
Ensure Current |
| Financial |
Can manage money |
| Personal care |
Healthcare decisions |
71st Birthday Checklist
Must Do By December 31
| Task |
Done? |
| Final RRSP contribution |
☐ |
| RRSP converted to RRIF |
☐ |
| Younger spouse election filed |
☐ |
| Withdrawal schedule set |
☐ |
Should Do
| Task |
Done? |
| Review investment allocation |
☐ |
| Update estate documents |
☐ |
| Beneficiaries confirmed |
☐ |
| Tax planning reviewed |
☐ |
| OAS clawback checked |
☐ |
Monthly Income After 71
Income Sources
| Source |
Amount |
| OAS |
~$727+ |
| CPP |
(your amount) |
| Employer pension |
(if any) |
| RRIF minimum |
(calculated) |
| TFSA (if needed) |
(flexible) |
| Total |
$ |
Common Mistakes
Avoid These
| Mistake |
Problem |
| Missing RRSP deadline |
Lose contribution room |
| Forgetting conversion |
RRSP deregistered |
| Not taking minimum |
Penalties |
| Over-withdrawing |
Higher taxes |
| Wrong beneficiaries |
Estate issues |
Special Situations
If Still Working
| Consider |
Action |
| RRSP room |
Make final contribution |
| OAS deferral |
If haven’t started |
| Tax bracket |
May increase |
If In Poor Health
| Consider |
Action |
| Larger withdrawals |
Use before estate |
| Name beneficiaries |
Direct transfer |
| Review estate plan |
Minimize taxes |