- At 71 the minimum is 5.28% of your January 1 balance; it reaches 20% at 95.
- Your RRSP must be converted by December 31 of the year you turn 71.
- Using a younger spouse's age lowers the required minimum.
A registered retirement income fund (RRIF) is the account most Canadians move their RRSP into in retirement. The rule that matters most: every year you must withdraw at least a minimum amount, and every dollar withdrawn is taxable income.
When you must open a RRIF
Your RRSP must be closed, converted to a RRIF or turned into an annuity by December 31 of the year you turn 71. You can open a RRIF earlier. There is no minimum withdrawal in the year you open it; the first minimum is due the following year.
How the minimum is calculated
The minimum is your account value on January 1 multiplied by a factor that depends on your age (or your spouse's, if younger and you choose it when you open the plan).
- Under 71: factor = 1 ÷ (90 − age). At 65 that is 4.00%.
- From 71 to 94: a fixed table, from 5.28% at 71 to 18.79% at 94.
- 95 and over: 20%.
| Age on January 1 | Minimum factor | Minimum on $400,000 |
|---|---|---|
| 65 | 4% | $16,000 |
| 71 | 5.28% | $21,120 |
| 75 | 5.82% | $23,280 |
| 80 | 6.82% | $27,280 |
More samples from the table: 71: 5.28%, 75: 5.82%, 80: 6.82%, 85: 8.51%, 90: 11.92%, 94: 18.79%.
Tax planning ideas
- Use the younger spouse's age to lower the required minimum and keep more money growing.
- Pension income splitting: from age 65 you can allocate up to half of RRIF income to a spouse, which may lower the household's tax.
- Pension income amount: RRIF income from age 65 can qualify for the federal pension income credit on the first $2,000.
- Watch withholding: there is no withholding tax on the minimum, but amounts above it are subject to withholding (10%, 20% or 30% depending on the size).
- Convert gradually: some people draw down the RRSP before 71 to smooth taxable income.
RRIF withdrawals and the OAS recovery tax
RRIF withdrawals increase net income, and the OAS recovery tax starts at $95,323. A large forced withdrawal at 75 or 80 can push a retiree over that line. Planning withdrawals earlier, or using TFSA money in the high-income years, helps. See the OAS guide for the numbers.
Calculate your own minimum with the RRIF calculator.
Frequently asked questions
Can I withdraw more than the minimum?
Yes, but the extra is taxable and subject to withholding tax.
Is there a maximum withdrawal?
No, except for locked-in accounts (LIF).
What if I don't take the minimum?
The CRA can tax the shortfall and the financial institution may not allow it.
Do RRIF withdrawals affect OAS?
Yes. They increase net income and can trigger the OAS recovery tax.