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Registered Retirement Income Fund (RRIF)

Income Tax Act s. 146.3

Registered retirement savings plans (RRSPs) must be cashed out (taxable) or converted to RRIFs (tax-free) no later than the year in which the RRSP holder turns 71.  The 2007 Federal budget revised this age from 69 to 71, for both RRSPs and RPPs.  See the article on conversion of RRSP to RRIF, on the RRSPs/RRIFs page, for special rules for RRIF holders who turn 70 or 71 in 2007.

Income Within RRIF Grows Tax-Free

Income earned in a RRIF is not taxable while it remains in the RRSP, including interest, dividends, and capital gains, so can grow tax free until the money is withdrawn.  There may be tax withheld from dividends received from some foreign investments, but not from dividends received from US corporations. See our article on which investments should be held inside vs outside an registered account.

Minimum Withdrawals From a RRIF

Once the RRSP is converted to a RRIF, the holder must withdraw a minimum amount each year, except in the year that the RRIF is established.  These withdrawals are taxable income for the holder.  The withdrawals qualify as pension income for purposes of the pension income tax credit for taxpayers 65 and over.  Starting in 2007 the withdrawals may be split with a spouse (pension splitting) on the tax return.

Partial Conversion to RRIF at Age 65

It may be beneficial to convert at least a portion of an RRSP to a RRIF when the taxpayer turns 65, in order to generate income eligible for the pension tax credit, and for pension splitting.

Self-Directed RRIF

The holder of a self-directed RRIF controls what investments are held in the account.

TaxTips.ca Resources

What investments can be held in an RRSP, RRIF, RESP or TFSA?

Pension Income Tax Credit

Pension Splitting

RRSP/RRIF Withdrawal Calculator: calculate your minimum RRIF withdrawals, fixed annual withdrawals adjusted for inflation, or withdrawals using a fixed number of years, even if you have not yet converted your RRSP to a RRIF.

Detailed Canadian Tax & RRSP Savings Calculator - includes pension splitting

Revised: October 26, 2023

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