Registered Retirement Income Fund, RRIF

Money in your RRIFFast Facts About RRIFs

A Registered Retirement Income Fund (RRIF) is registered with the Canadian federal government. While similar to a Registered Retirement Savings Plan (RRSP), a RRIF becomes effective beyond the age of 71. Assuming you have a RRSP and/or other registered funds, you can simply transfer the money from these to your RRIF without any tax liability to create a regular source of ‘retirement income.’ The money you take out of your RRIF is treated as taxable income but the remaining proceeds continue to grow tax free.

In terms of estate planning, RRIFs make it easy. The surviving spouse/partner can continue to receive income from your RRIF or he/she can choose other tax free transfer options.

There is a fair amount of flexibility in RRIFs. For example, you can vary your annual payments above the minimum amount you are required to take out. And if your spouse is younger than yourself you can base your RRIF minimum amount on his/her birth date thereby reducing your minimum payment until that person reaches age 71.

Note that you are required by the federal government to convert your RRSP to a RRIF by December 31 in the year in which you turn age 71. Your first income would be received in the year you became 72 and you can choose to start receiving income from a RRIF before you turn 71.

Since RRIFs can be customized to meet your retirement income needs, we suggest that you talk to Jacqui McFarlane about how best to set one up for you.