Registered Retirement Income Fund (RRIF)

An RRIF is an investment plan, established in accordance with Government of Canada requirements, into which you can transfer registered funds (usually your RRSP) without tax liability to establish a source of retirement income.

Some RRIFs are similar to continuing an RRSP beyond age 71, with the exception that you must take some taxable income from the RRIF. You can choose any payment level, as long as the total each year is at least equal to the minimum annual amount. There is no maximum payment level.

With many RRIFs you can vary your annual payments above the minimum amount to meet your needs. Obviously the higher the payments, the sooner your funds will be depleted. RRIFs can continue for the lifetime of the holder or their spouse.

Minimum Annual Payments

You don’t have to take any payment from a RRIF in the calendar year it is first funded. In subsequent years, the minimum annual payment changes annually, based on your age and the total value of the RRIF at the beginning of the year.

In some cases, it makes sense to elect to base your minimum RRIF payment on your spouse’s birthdates. You must make this election when the RRIF is created:

  • If you choose the age of a younger spouse*, your minimum payment will be lower; much lower when your spouse is younger than 71.
  • If you select the age of an older spouse, your minimum payment will be higher without triggering withholding tax at source.
  • If you have RRIFs based on the same birthdates, when one spouse passes away the survivor can combine the two RRIFs into one, rather than having to continue with two RRIFs.
  • If you didn’t make this election when you applied for your RRIF, or you marry later, you can transfer your RRIF to a new RRIF based on your younger spouse’s age.

*Spouse includes a common-law or same-sex partner.

Estate Considerations

RRIFs also offer simplicity in estate planning. If you die, your spouse or partner can continue to receive income from your RRIF or the account can be transferred tax-free to their RRIF or RRSP. Or, the remaining balance can be paid to your estate or beneficiary.

Investment Choices

Like RRSPs, RRIFs come in all shape and sizes. Because they can be customized to meet your retirement income needs, your first step should be to contact our office for more information.