What is an RRIF?

Registered Retirement Income Fund (RRIF): An account that accumulates the money in your RRSP and allows you to have annual withdrawals at the time of your retirement (while maintaining tax-free growth within the account).

Benefits of a RRIF

  • Constant and Controlled Income: An RRIF will allow you to have a constant stream of income during your retirement. You are also allowed to take out as much as you want, given that you meet your annual minimum withdrawal amount.
  • Flexible Investments: You can hold the same investments as those that are eligible for an RRSP (cash, mutual funds, bonds, stocks, GICs, ETFs, ect.)
  • Tax-Free Growth: The money in your RRIF will continue to grow, tax-free.

Things to know about an RRIF

  • The money in your RRIF is transferred from your RRSP. Other registered plans are allowed under certain circumstances
  • Open a RRIF by the end of the year you turn 71, or anytime before that. (Your investments are directly transferred between accounts)
  • Once your RRIF is made, you cannot contribute to the account. However, you can have more than one RRIF.
  • You must withdraw a minimum amount each year, once your account is set up. However, there is no maximum limit that you are able to take out. As you get older, your minimum amount will increase.  
  • After Death: The money in your RRIF account will be transferred to your beneficiary or estate when you die.
  • Tax is applied to your withdrawals because they will be considered your income. On the other hand, as long as the money stays in your account, it is tax-free.

Withholding Tax: If you want to withdraw more than the minimum amount, you will be taxed based on how much more is taken (Residents of Quebec have a different withholding tax). 

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