This RRIF withdrawal calculator helps you esitmate your payments by calculating the minimum amount that you have to withdrawal each year. If you want to withdrawl a fixed payment you can also see the value of your RRIF over time.
What is a Registered Retirement Income Fund (RRIF)?
A Registered Retirement Income Fund (RRIF) is a federal retirement account in Canada which helps provide income in your retirement. You can convert your Registered Retirement Savings Plan (RRSP) into an RRIF as early as 55 year old. Once you reach 71 years old you must convert your RRSP to an RRIF. An RRIF will allow you to withdrawal money and receive payments which will be taxed as income.
What is the minimum amount you must withdrawal from an RRIF?
You are required to withdrawal a minimum amount from your RRIF each year. The amount that you must withdrawal is a percentage based on your age. This percentage increases with age. This percentage must be withdrawn based on the RRIF’s value at the beginning of each year.
For example, we will calculate the minimum withdrawal amount at age 71 when your RRSP is converted into an RRIF. We will assume that the value of the RRIF is $500,000 at the beginning of the year. The prescribed factor when you are 71 is 5.28%. To calculate the minimum withdrawal amount we can multiple the value of the RRIF by the prescribe rate which is $500,000 X 5.28% = $26,400.
The prescribed factor is based on the rate released by the Government of Canada for “All other RRIF’s”