RRSPs and RRIFs -> Conversion of an RRSP to a RRIF

Prior to 2007, it was required that a Registered Retirement Savings Plan (RRSP) be converted to a Registered Retirement Income Fund (RRIF) by the end of the year in which the owner turned 69.  The 2007 Federal budget revised this age to 71, for both RRSPs and RPPs.  RRIF owners are required to withdraw a minimum amount each year, starting the year after the RRIF is established.  This requirement is waived, and there is no minimum withdrawal in the following circumstances:

There is no advantage gained by converting your RRSP to a RRIF before age 65.  By converting some of your RRSP to a RRIF at age 65, you can take advantage of the pension income tax credit and and pension income splitting with your spouse.

If you have earned income and thus contribution room after age 71, you can make contributions to the RRSP of a spouse who is 71 or younger.

The RRSP/RRIF calculator will show you your minimum withdrawals, and will help you plan how much to withdraw annually from your RRSPs/RRIFs.

Tax tip:  Convert some of your RRSP to a RRIF at age 65 in order to take advantage of the pension income tax credit and pension income splitting with your spouse.

Revised: June 16, 2010