Understanding RRIFs

Learn more about this retirement income option

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A Registered Retirement Income Fund (RRIF) is similar to a Registered Retirement Savings Plan (RRSP) in that both are registered plans, meaning that the basket of investments held within them are allowed to grow on a tax-deferred basis. But instead of being used to save money for retirement, a RRIF is used to provide income during retirement.

If you have an RRSP, you are required to close it no later than December 31 of the year you turn 71. At that time, you have a choice to withdraw all of the funds from your RRSP (which would likely involve a large tax obligation), convert the funds to an annuity or convert to a RRIF.

A RRIF is basically a continuation of your RRSP, except you can no longer make contributions and you have to begin withdrawing a minimum percentage each year (see chart below).

What are the benefits?

Converting to a RRIF allows your investments to continue growing tax free through your retirement years. You may keep the same investments in your RRIF as you did in your RRSP and maintain the freedom to switch between mutual funds or other qualifying investments as you wish.

Even though you must withdraw the minimum mandated amount from your RRIF each year, there are no limits on how much you can take out above that. One of the main benefits of a RRIF is the flexibility to withdraw larger amounts if you need them in retirement. Keep in mind, however, that any withdrawals from a RRIF are taxable and tax is withheld on the amounts you withdraw that are above the mandatory minimum.

How much are my minimum withdrawals?

Minimum withdrawal amounts depend on your age and they increase each year. For example, if you are 76 years of age, you have to withdraw 5.98% but at age 95 and above you ​​​​​​​must take out 20%.

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If you have earned income and unused RRSP contribution room after you have established your RRIF, you may still be eligible to make contributions to a spousal RRSP if your spouse is age 71 or younger.

Minimum withdrawal amounts depend on your age

Annual minimum withdrawal (% of RRIF)*

Your age (or your spouse's)


*Source: Canada Revenue Agency. The minimum withdrawal amount is based on the value of your RRIF on December 31 of the previous year.

If you’re approaching age 71, or just turned 71, talk to your advisor to prepare for the December 31 deadline.


This information has been provided by RBC Global Asset Management Inc. (RBC GAM) and is for informational purposes only. It is not intended to provide legal, accounting, tax, investment, financial or other advice and such information should not be relied upon for providing such advice. The information contained herein is from sources believed to be reliable, but accuracy cannot be guaranteed. Please consult your advisor and read the prospectus or Fund Facts document before investing. There may be commissions, trailing commissions, management fees and expenses associated with mutual fund investments. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. RBC Funds, BlueBay Funds and PH&N Funds are offered by RBC Global Asset Management Inc. and distributed through authorized dealers.

® / ™ Trademark(s) of Royal Bank of Canada. Used under licence. © RBC Global Asset Management Inc. 2017

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