Your RRSP is a savings vehicle — it grows tax-sheltered during your working years. But the government requires you to eventually convert it into a retirement income stream. The most common option is the Registered Retirement Income Fund (RRIF). This guide explains how the conversion works, what minimums apply, and how to plan the transition strategically.
A Registered Retirement Income Fund (RRIF) is the natural successor to your RRSP. When you convert, your RRSP is transferred directly into a RRIF — your investments don't have to be sold and remain fully invested. The key difference: instead of contributing money in, you're required to withdraw a minimum amount each year.
Your RRIF continues to grow tax-sheltered, and you only pay tax on the amounts you actually withdraw. Unlike an RRSP, you cannot make new contributions to a RRIF.
You must close your RRSP by December 31 of the year you turn 71. Your options at that point are:
Most Canadians choose a RRIF, often keeping the same investments they had in their RRSP. You can convert earlier if you want to start income sooner — some Canadians convert at 65 or even earlier to access the pension income tax credit.
A key reason many Canadians convert to RRIF before 71 is to access the pension income tax credit. To claim it, you need "eligible pension income" — and RRIF withdrawals starting at age 65 qualify. The credit lets you deduct up to $2,000 of eligible pension income federally (and similar amounts provincially).
Converting even a small portion of your RRSP to a RRIF at 65 and withdrawing $2,000/year can save you $300–$500 in taxes annually. You can also pension-split this income with a lower-income spouse.
Once you have a RRIF, you must withdraw at least the minimum amount each year starting in the year after you open the RRIF. The minimums are calculated as a percentage of the RRIF value on January 1:
| Age | Minimum Withdrawal % |
|---|---|
| 65 | 4.00% |
| 70 | 5.00% |
| 71 | 5.28% |
| 75 | 5.82% |
| 80 | 6.82% |
| 85 | 8.51% |
| 90 | 11.92% |
| 95+ | 20.00% |
You can always withdraw more than the minimum, but never less. Excess withdrawals are fully taxable in the year withdrawn.
You can base your RRIF minimum withdrawals on your spouse's age if they are younger. This reduces your mandatory annual withdrawal, leaving more money growing tax-sheltered in the RRIF for longer. This election must be made when the RRIF is established and cannot be reversed.
RRIF withdrawals are fully taxable as regular income. Your financial institution withholds tax at source:
Withholding is not the final tax — you settle up at tax time based on your marginal rate. If you're in the 33% bracket and only had 20% withheld, you'll owe more at filing.
RRIF withdrawals count as net income for OAS clawback purposes. For retirees near or above the ~$90,997 threshold, large RRIF withdrawals can trigger the OAS recovery tax. Strategies to manage this:
If you die with a RRIF balance, the full amount is included in your income in the year of death — unless you have a named beneficiary:
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Get KOHO Free — Use Code 45ET55JSYAYes. You can have multiple RRIFs at different financial institutions. Each has its own minimum withdrawal calculated separately. Many Canadians consolidate into one RRIF to simplify income management.
Yes. A RRIF can hold the same investments as an RRSP — stocks, bonds, ETFs, GICs, mutual funds, etc. Conversion doesn't require selling anything; your investments simply transfer in-kind.
You must take the minimum regardless. If you don't need the money, withdraw the minimum and invest the after-tax proceeds in your TFSA or a non-registered account to keep the money working for you.