By December 31 of the year you turn 71, your RRSP must be converted. The most common option, and usually the best, is a Registered Retirement Income Fund (RRIF). Your investments continue to grow tax-deferred inside the RRIF. The key difference: you must withdraw a minimum amount each year. Every dollar withdrawn is taxable income. Planning how much to take, when, and in what order relative to your other income sources is one of the most consequential decisions in retirement.
Latest you can convert your RRSP to a RRIF
You can use a younger spouse’s age to reduce mandatory minimums
No maximum withdrawal, take as much as you need
You can convert your RRSP to a RRIF at any age, you don’t have to wait until 71. In some cases, converting earlier and taking small withdrawals in lower-income years (such as early retirement, 65–71) makes sense to spread taxable income and avoid large mandatory withdrawals later.
If your spouse is younger, you can elect to base your RRIF minimum withdrawals on their age instead of yours. This reduces the mandatory minimum, leaving more in the RRIF to continue growing tax-deferred. Once elected, this can’t be reversed, it requires a deliberate decision at the time of RRIF setup.
RRIF withdrawals are taxable income. If they push your income above ~$90,997 (2025), your Old Age Security payments begin to be clawed back. Managing RRIF withdrawals in context with CPP, OAS, and other income sources is a core part of a retirement income strategy.
The minimum is a floor, not a target. In years when your income is lower, taking additional RRIF withdrawals (above the minimum) can actually reduce your lifetime tax burden, by drawing down the RRIF at a lower rate before forced larger withdrawals kick in at higher ages.
Your RRIF can be transferred to a surviving spouse’s RRIF or RRSP on a tax-deferred basis if they’re named as beneficiary or successor annuitant. This is a critical estate planning step. Without proper planning, the entire RRIF balance becomes taxable in the year of death.
The RRIF can hold the same investments as an RRSP. Just because you’re withdrawing doesn’t mean the remaining funds should be in cash. A thoughtful investment strategy inside the RRIF ensures your money continues working during retirement, potentially for decades.
The minimum withdrawal percentage increases each year. The amounts below are based on the RRIF balance at January 1 of that year.
5.28%
$26,400/year minimum
5.40%
$27,000/year minimum
5.82%
$29,100/year minimum
6.82%
$34,100/year minimum
8.51%
$42,550/year minimum
11.92%
$59,600/year minimum
20.00%
$100,000/year minimum
You have three options when closing your RRSP at 71: convert to a RRIF, purchase an annuity, or take the full balance as a taxable lump sum. Most people choose a RRIF because it preserves flexibility and continued tax-deferred growth. You can also split your RRSP, converting some to a RRIF and some to an annuity, which some clients find provides useful income certainty alongside flexibility.
Yes, for withdrawals above the minimum. The minimum mandatory withdrawal has no withholding tax at source. Any amount above the minimum is subject to withholding tax (10–30% depending on the amount). The actual tax you owe is reconciled at tax time based on your total income, withholding is an advance payment, not the final amount.
If your spouse is named as successor annuitant, the RRIF transfers to them intact without triggering tax. If you name a beneficiary (not a spouse), the RRIF is paid out and the full fair market value is included in your income in the year of death, a significant tax event. For dependent children, a special rollover provision may apply. This is one of the most important areas of estate planning for retirees.
Yes, until you turn 71. Some clients convert a portion of their RRSP to a RRIF in their 60s while keeping the rest in an RRSP. This gives flexibility: RRIF withdrawals in early retirement, while the RRSP continues growing and isn’t subject to mandatory withdrawals yet. At 71, the remaining RRSP must be converted.
How you draw down your savings determines how much goes to you and how much goes to tax. Let’s build a withdrawal strategy that keeps more in your pocket.
Manjit Singh Sandhu · Financial Advisor
