RRIF explained: how a registered retirement income fund works in Canada

A registered retirement income fund (RRIF, often shortened to RIF) is the account that turns RRSP savings into retirement income. You move money in, it stays invested, and the carrier (the bank, credit union, trust company, insurer or brokerage holding it) pays you at least a required minimum every year for the rest of your life. The usual reason to open one is that the RRSP has to be wound up by the end of the year its owner turns 71, but a RRIF can be opened earlier.

This page explains the rules; it is not tax, legal or investment advice. Your RRIF carrier calculates your exact minimum and shows it on your statement, and your T4RIF slip and CRA My Account show what was paid and withheld.

How does a RRIF work?

A RRIF is an arrangement between you and a carrier that the Canada Revenue Agency (CRA) has registered. Five rules shape almost everything else:

• Money goes in by transfer only. Property can be transferred in from an RRSP, a pooled registered pension plan (PRPP), a registered pension plan (RPP), a specified pension plan (SPP), another RRIF, or a first home savings account (FHSA). Once the RRIF is set up, no new contributions are allowed.
• Growth is sheltered. Earnings inside a RRIF are not taxed while they stay there, the same as in an RRSP.
• Payments are taxable. Every payment out of the RRIF is taxable income in the year you receive it.
• There is a yearly floor, not a ceiling. From the year after it is opened, you must be paid at least a minimum each year, and the payout period is your whole life. You can always take more.
• It is yours to invest. A RRIF can hold the same kinds of qualified investments as an RRSP, from GICs and mutual funds to ETFs and stocks in a self-directed RRIF, and you can have more than one.

The table below puts the RRIF next to the account it usually replaces and the main alternative at 71.

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When do you have to convert an RRSP to a RRIF?

An RRSP generally has to mature by the last day of the year you turn 71. December 31 of that year is also the last day you can contribute to your own RRSPs. By then, the CRA gives three choices, and you can mix them:

1. Withdraw the money. The issuer withholds tax and the whole amount is taxable income that year, which can mean a large tax bill in a single year.
2. Transfer it to a RRIF. No tax is withheld on a direct transfer; tax applies only as money comes out of the RRIF.
3. Buy an annuity. No tax is withheld on a direct transfer to buy an annuity; each annuity payment is taxable when received.

For example, someone born in 1955 turns 71 in 2026, so their RRSP must mature by December 31, 2026. If it moves to a RRIF that year, no minimum applies for 2026, and the first required withdrawal is in 2027, based on their age on January 1, 2027.

There is no minimum age for a RRIF. Converting earlier, for example at 65 to create a steady income, is allowed and uses a smaller formula-based minimum. The trade-off is that the minimum then applies every year from the next year on.

How do you convert an RRSP to a RRIF?

Converting is paperwork with your carrier, not a tax filing. The usual steps:

1. Decide where the RRIF will live. Opening it with the current RRSP carrier makes the transfer internal. Moving to another institution works too; the receiving carrier starts the transfer.
2. Fill out the RRIF application. This is where the choices that are hard to undo are made.
3. Choose whose age sets the minimum. You can base it on your spouse’s or common-law partner’s age instead of your own. The CRA’s guide says this option must be selected on the original RRIF application, and once made the election cannot be changed.
4. Name a successor annuitant or beneficiary. A spouse or common-law partner can be named successor annuitant, in the RRIF contract or in a will, so the RRIF continues after death; others are named as beneficiaries. The carrier’s form shows which designations it accepts.
5. Pick a payment schedule. Carriers usually offer monthly, quarterly, semi-annual or annual payments, or a single payment late in the year. Any schedule is fine as long as the full minimum is paid by December 31.
6. Set withholding if you want it. Nothing is withheld on the minimum by default. To avoid a balance owing in April, you can ask the carrier to withhold extra tax using Form TD1.
7. Transfer the assets. Investments can usually move in kind (no need to sell). The RRSP is then closed or left with a zero balance.

Doing this in the fall of the year you turn 71, rather than the last week of December, leaves time to fix errors before the deadline. The RRSP explainer covers what happens on the RRSP side, including spousal RRSPs.

How much do you have to withdraw from a RRIF each year?

The yearly minimum is the RRIF’s fair market value on January 1 multiplied by a prescribed factor for your age at the start of that year (or your spouse’s age, if you elected it). From age 71 the factor comes from a fixed table in the Income Tax Regulations, starting at 5.28% at 71 and reaching 20% at 95 or older. Before 71 the factor is 1 ÷ (90 − age). The full table for every age is on the RRIF minimum withdrawal rates page.

The table below shows what those factors mean in dollars on a hypothetical $100,000 RRIF on January 1.

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Two points are easy to miss. First, the minimum is a floor: withdrawing more is always allowed, but the extra has tax withheld. Second, the minimum is recalculated every January from the new balance, so good investment years raise next year’s minimum and poor ones lower it. The RRIF withdrawal calculator projects the minimum for your own balance, age and expected return.

Can you use your spouse’s age for RRIF withdrawals?

Yes, if you choose it when the RRIF is set up. Using a younger spouse’s or common-law partner’s age gives a smaller factor, so less has to come out each year and more stays tax-sheltered.

Take a RRIF holder who is 71 on January 1 with $200,000 in the RRIF, and a spouse who is 66. On the holder’s own age, the minimum is $10,560. On the spouse’s age, the factor is 1 ÷ 24 and the minimum is about $8,333, which is $2,227 less forced taxable income that year. The holder can still withdraw more whenever needed.

The catch is timing: the election is made on the original application and cannot be changed later. If the spouse is older, their age would give a larger minimum, so the election only helps when the spouse is younger.

How are RRIF withdrawals taxed?

All RRIF payments are taxable income. What differs is how much tax the carrier takes off at source:

• The minimum: no tax is withheld. The tax on it is due with your return, by April 30 of the following year, unless you are required to pay by instalments.
• Anything above the minimum: tax is withheld at the lump-sum rates below, based on the size of the excess amount requested.

How to read this table: The rate depends on the size of the amount above the minimum that you request. The whole excess takes that band's rate; it is not a marginal bracket. Quebec residents also have Quebec provincial tax withheld on top of the federal part shown.

Amount above the minimum	Withheld (outside Quebec)	Federal part withheld in Quebec
Up to $5,000	10%	5%
Over $5,000, up to $15,000	20%	10%
Over $15,000	30%	15%

Source: Tax rates on withdrawals — Canada.ca; Tax rates on withdrawals — Canada.ca (non-residents); Registered Retirement Savings Plans and Registered Retirement Income Funds (RRSPs/RRIFs) — Q&A for plan administrators, section 7 Withholding tax on payments from a RRIF; Registered Retirement Savings Plans and Registered Retirement Income Funds (RRSPs/RRIFs) — Q&A for plan administrators (tax on the minimum); Registered Retirement Savings Plans and Registered Retirement Income Funds (RRSPs/RRIFs) — Q&A for plan administrators (instalments, A7.1); Receiving income from a RRIF — Canada.ca; Receiving income from a RRIF — Canada.ca (pension income amount); Guide T4040, RRSPs and Other Registered Plans for Retirement — Canada.ca; Setting up a RRIF — Canada.ca. In effect from August 1, 2014; checked September 29, 2026.

For example, a retiree outside Quebec who asks for an extra $8,000 on top of the minimum falls in the “over $5,000, up to $15,000” band, so $1,600 is withheld and $6,400 is deposited. Withholding is only an estimate; the real tax depends on total income for the year and is settled on the return. Payments to non-residents generally have 25% withheld unless a tax treaty reduces it.

From age 65, two tax breaks apply to RRIF income, and one income-tested benefit needs watching:

• Pension income amount. If you were 65 or older on December 31, RRIF income qualifies for the federal pension income amount, a credit on up to $2,000 of eligible pension income.
• Pension income splitting. From 65, up to 50% of RRIF income can be allocated to a spouse or common-law partner on Form T1032. The pension income splitting guide shows who qualifies and how the election works.
• The OAS clawback. RRIF income raises net income, which can trigger the OAS recovery tax. The OAS clawback thresholds page shows where that starts.

RRIF vs annuity: which one fits?

At 71 the real choice is between keeping control (RRIF) and buying certainty (annuity). A RRIF keeps the money invested and accessible: you can take more in a year with big expenses, leave the balance to heirs, and change investments. The risk is that markets or a long life can shrink the income. A life annuity turns a lump sum into guaranteed payments for life, which removes investment and longevity risk, but the capital is gone and the payment is fixed when you buy it.

Some retirees do both. One approach is to buy an annuity with part of the money so that it, plus CPP and OAS, covers fixed bills, and keep the rest in a RRIF for flexibility. There is also the advanced life deferred annuity (ALDA), bought with registered money, whose payments must start before the end of the year you turn 85; it is a way to insure against a very long life while keeping the RRIF for earlier years. The annuity rates comparison shows what current rates pay, and the retirement income optimizer models the order in which to draw from a RRIF, TFSA, CPP and OAS.

What happens to a RRIF when you die?

The general rule is that the CRA treats the holder as having received the RRIF’s full fair market value immediately before death. That amount goes on the final return, which can push a large balance into the top tax bracket. Two exceptions apply for a spouse or common-law partner:

• Successor annuitant. If the RRIF contract or will names the spouse or common-law partner as successor annuitant, the RRIF simply continues and pays them. Nothing is included in the deceased’s income, and the survivor reports the payments as they receive them.
• Sole beneficiary with a rollover. If the spouse or common-law partner is the sole beneficiary and the eligible part is transferred directly to their own RRSP, RRIF, PRPP, SPP or an eligible annuity by December 31 of the year after death, the tax is deferred to the survivor.

Financially dependent children or grandchildren can also defer tax in some cases, for example through a term annuity or a rollover to the RDSP of a child with an impairment. Other beneficiaries receive the money, but the tax stays on the deceased’s final return. The inheritance tax in Canada guide covers how registered accounts fit into an estate.

RRIF rules: common mistakes

• Missing the age 71 deadline. Leaving the conversion to late December risks a forced withdrawal of the whole RRSP if the paperwork is not done.
• Skipping the spouse’s-age election. It lowers the minimum for life when a spouse is younger, but it can only be chosen on the original application.
• Forgetting the minimum is taxable. Nothing is withheld on it, so retirees with CPP, OAS or a workplace pension can face a balance owing in April.
• Expecting smaller withdrawals to lower the tax. When one request is paid in instalments, the withholding rate follows the total requested, not each instalment. Separate requests can each fall in the 10% band, but withholding is only a prepayment: the final tax depends on total income for the year, so less withheld now can mean more owing in April.
• Not naming a successor annuitant. Without one, a surviving spouse becomes successor annuitant only if the estate’s legal representative consents and the carrier agrees; otherwise they rely on the beneficiary rollover rules and deadlines.
• Treating a LIF like a RRIF. Locked-in pension money moves from a LIRA to a LIF, which has a yearly maximum as well as a minimum. The LIRA explainer covers that path.

What if your RRIF payment looks wrong or late?

The carrier calculates and pays the minimum, so start there: ask it to show the January 1 value, the age and factor it used, and whether a spouse’s-age election is on file. The full minimum has to be paid by December 31, so raise a missing payment before year end. For tax, the carrier issues a T4RIF slip showing RRIF income and any tax withheld, and the same slip appears in CRA My Account. If the slip is wrong, ask the carrier for an amended slip; if your return is already filed, you can then ask the CRA to change it through CRA My Account.

Will the RRIF rules change?

The rules sit in the Income Tax Act and the Income Tax Regulations, so they change only when Ottawa amends them, usually through a federal budget. The prescribed factors in the minimum table last changed for the 2015 tax year, when they were lowered for ages 71 to 94. Calls to lower or suspend the minimum come up from time to time; this page and the minimum withdrawal rates page will be updated if a change becomes law.

Where can you open a self-directed RRIF?

RRIFs are offered by banks, credit unions, trust companies, insurers and brokerages, and the minimum and tax rules are identical everywhere. The difference is what the RRIF can hold and what it costs. A self-directed RRIF at a brokerage lets you hold your own ETFs, stocks or GICs, but nobody manages the withdrawals or the investments for you. Wealthsimple’s self-directed account types are TFSA, RRSP, FHSA, RESP, LIRA, RRIF, non-registered (cash and margin), and corporate accounts, and it accepts transfers of non-registered (individual and joint), TFSA, RRSP, spousal RRSP, FHSA, RRIF, spousal RRIF, LIRA, LIF, pension, RESP, business, and margin accounts. If moving an RRSP or an existing RRIF to a self-directed account is the next step for you, Wealthsimple's self-directed RRIF is one option to compare with your current carrier’s fees and service. The Wealthsimple RRSP page explains how its registered accounts work before conversion.