A Registered Retirement Income Fund (RRIF) is the account your RRSP converts into when you are ready to draw retirement income — or by the end of the year you turn 71. A RRIF holds the same investments as your RRSP but requires a minimum annual withdrawal, which is taxed as income.
How a RRIF Works
CRA sets a minimum withdrawal percentage based on your age that increases every year. At age 72 it is approximately 5.4 percent. By age 85 it reaches 8.51 percent. You can always withdraw more than the minimum but never less. Withdrawals are added to your taxable income and may affect OAS clawback and GIS eligibility.
Why It Matters in Retirement
A large RRIF left unmanaged creates a significant tax bill in your 80s and at death. Early strategic drawdown, TFSA sheltering, and pension income splitting are the most effective tools for reducing lifetime taxes.
Related Resources
This article provides general financial education for Canadians. It is not personalized financial advice. For guidance specific to your situation, consider speaking with a CFP professional.