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RRSP Conversion to RRIF

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

Converting Your 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:

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bullet for 2007, for RRIF owners who turn 71 in 2007, and
bullet for 2007 and 2008, for RRIF owners who turn 70 in 2007. 

In most cases, there is no advantage gained by converting your RRSP to a RRIF before the year in which you turn 65.  However, if you plan to make regular withdrawals from your RRSP before you turn 65, check to see if the fees charged by your financial institution would be less if the RRSP, or a portion of it, was converted to a RRIF.

By converting some of your RRSP to a RRIF in the year you turn 65, you can take advantage of the pension income tax credit and and pension income splitting with your spouse.  See our article on creating pension income.

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.

 

See also:
bulletMaking "in kind" withdrawals from your RRSP or RRIF
bulletFinal RRSP Contribution Age 71 (excess contribution)

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: April 05, 2014

 

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