Registered Retirement Income Funds (RRIF)

You've planned ahead by saving for your retirement and you're ready to enjoy all the leisure and opportunity available to you. But now there's a major decision to be made: What do you do with your retirement savings? Choosing the best option means examining the lifestyle you plan to enjoy during your retirement, along with other factors, and we're here to help guide you.

What is a RRIF?

A Registered Retirement Income Fund or RRIF is one of the most flexible ways to convert your RRSP into an ongoing source of income.

A RRIF is like an RRSP in reverse: Your investment continues to grow tax-deferred and remains directly under your control. However, instead of making regular contributions, you make regular withdrawals according to a predetermined schedule. These withdrawals then become taxable upon receipt. RRIFs also give you the flexibility to increase your income or take lump-sum withdrawals whenever you choose.

You can convert your RRSP to one or several retirement income options at any age. But you must terminate it no later than December 31st of the year in which you turn 71. While you could withdraw all the money from your RRSP as a lump sum before then, and pay tax on it accordingly, by far the best choice is to transfer the funds to an option that will make payments to you over a period of time and continue tax sheltering income in the plan.

There's a wide choice of retirement income options available today including GICs, equities and others, providing you with the flexibility to manage the ongoing growth of your investment. While having so many options is good in some ways, it can also be confusing unless you understand the differences and are able to choose the ones best suited to your needs.

Canadians may choose from three different ways of generating retirement income from their RRSPs. These are:

  • A Registered Retirement Income Fund (RRIF) which puts you in control of your investment and the amount of income it pays you
  • A Life Annuity which guarantees a fixed income
  • A Term Certain Annuity to age 90 (TCA 90) which gives you some control over your investment and earnings.

In Ontario, there are two additional income plans:

  • A Life Income Fund (LIF) which combines the benefits of both a RRIF and a Life Annuity
  • A Locked-In Registered Retirement Income Fund (LRIF) where pension money from a Locked-In Retirement Account (LIRA) or locked-in RRSP can be transferred.

After reviewing the options available most people decide that a RRIF best meets their needs. A RRIF earns money from investments, just as your RRSP did.

Canada Revenue Agency (CRA) requires that you receive at least a minimum payment from your RRIF each year, but beyond that, your RRIF can be completely customized to meet your budgetary needs. As long as funds remain in your RRIF, they are tax sheltered and continue to grow.

Answers to your retirement savings and income option questions ...
These questions, and many more, are answered in our information-packed guide books, which you can download for free.  If you prefer, we will mail a copy to you ... just ask your branch!

Ensure your objectives... with designations

The decision of when and how to make a designation is YOUR responsibility. The “best” designation is the one that meets your personal and estate planning objectives.  To learn more, download this pamphlet for information on designations on RRSPs, RRIFs, and TFSAs.


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