TaxTips.ca
Canadian Tax and
Financial Information
RRIF Minimum Withdrawals

TaxTips.ca does not research or endorse any product   or service appearing in ads on this site.  Before making a major financial decision you  should consult a qualified professional.

Looking for US tax information?
See
USTaxTips.net

Need an accounting, tax or financial advisor? Look in our Business Directory.     Stay Connected with TaxTips.ca!  Internet Explorer - Use compatibility view for calculators to work properly!

Home
What's New
Calculators
Personal Tax
Business
Sales Taxes
Free in 30!
Financial Planning
RRSP RRIF TFSA
Real Estate
Stocks Bonds etc.
Seniors
Disabilities
Canada
Alberta
British Columbia
Manitoba
Ontario
Quebec
Saskatchewan
Atlantic Provinces
Territories
Federal Budget
Provincial Budgets
Statistics etc.
Glossary
Site Map
Business Directory
Advertise With Us
Contact Us/About Us
Links & Resources


RRSPs RRIFs and TFSAs -> RRIF minimum withdrawals

RRIF Minimum Annual Withdrawals

There is no withdrawal necessary in the year a RRIF (Registered Retirement Income Fund) is set up, but there are minimum amounts that must be withdrawn annually starting in the year after setup.  Unless certain types of annuities are held in the RRIF, the minimum withdrawal amount is calculated by multiplying the market value of the RRIF holdings at the beginning of the year by a "prescribed factor".

Use our RRIF calculator to project your earnings and withdrawals from your RRIF for the next 40 years.  The RRIF calculator will calculate minimum withdrawals, fixed annual withdrawals adjusted for inflation, or withdrawals using a fixed number of years.  If you haven't converted your RRSP to a RRIF yet, you can use the RRSP/RRIF calculator to project your earnings and withdrawals over the next 40 years.  This calculator is more versatile than the RRIF calculator (and can also be used if you have already converted to a RRIF), allowing input of different rates of return and larger than the minimum withdrawal in any year.

Once an RRIF is established, the financial institution or brokerage will normally include the required minimum annual withdrawal amount on account statements provided to the holder of the RRIF.  The information provided should also include the amount that has been withdrawn up to the statement date.

No tax is withheld when the minimum amount is withdrawn from a RRIF - see our article on withholding taxes on RRIF and RRSP withdrawals.

There is no maximum withdrawal for RRIFs, unless they are locked-in, such as an LRIF or LIF.  The RRIF calculator will not calculate maximum withdrawals for locked-in accounts.  If you have a locked-in account, see the article "LIF and LRIF minimum and maximum withdrawals" for help in determining your maximum withdrawal amount.

RRIF withdrawals can also be made by an "in kind" withdrawal of investments.

For RRIF owners who turned 70 or 71 in 2007, see the article about RRSP conversion to RRIF, regarding the 2007 Federal Budget changes.  This article also deals with what could be done if the minimum withdrawal was made for 2007 under the old rules.

Note that there are attribution rules regarding withdrawals from a spousal RRIF.  When a spousal RRSP is converted to a RRIF, it becomes a spousal RRIF.

The prescribed factor depends upon when the RRIF was started.

Post-1992 RRIFs

For a RRIF started after 1992, the prescribed factor is 1/(90-age), but only while the annuitant (owner) is under 71 years old.  Age is the age of the annuitant at the beginning of the year.  Thus, if the annuitant is 70 years old at the beginning of the year, the factor is 1/(90-70) = 1/20 = .05.

For example, if the fair market value of the holdings in the RRIF were $100,000 at the beginning of the year and the annuitant was 75 years old at the beginning of the year, then the minimum withdrawal for that year would be $100,000 x .0785 = $7,850.

Pre-1993 RRIFs

If the RRIF was started prior to 1993, then it is a "qualifying RRIF", as long as no new property was transferred into the RRIF after 1992, other than from another qualifying RRIF.  The prescribed factor for a qualifying RRIF is 1/(90-age) while the annuitant (owner) of the RRIF is under 79 years old.  Thus, if the annuitant is 72 years old at the beginning of the year, the factor is 1/(90-72) = 1/18 = .0556.

Prescribed RRIF Factors for Pre-1993 RRIFs and Post-1992 RRIFs

See our Table of Prescribed Factors for RRIF Withdrawals, which also shows the % increase in the rate each year.

Using age of spouse to calculate minimum withdrawals

Note that the annuitant can elect, prior to receiving any payments under the fund, to use the age of their spouse or common-law partner in calculating the prescribed factor, for both qualifying and non-qualifying RRIFs.

CRA Resources:

IC 78-18 - Registered Retirement Income Funds.

 

Tax Tips:

Using the age of a younger spouse can be an advantage in calculating RRIF minimum withdrawals.

Your RRIF withdrawals can be made "in kind" so that investments do not have to be sold in order to make the withdrawal.

 

Revised: November 17, 2014

 

Copyright © 2002 - 2014 Boat Harbour Investments Ltd. All Rights Reserved  See Reproduction of information from TaxTips.ca

Facebook | Twitter | Google + | Monthly Newsletter Sign-up | What’s New E-mail Notification | RSS News Feed
The information on this site is not intended to be a substitute for professional advice.  Each person's situation differs, and a professional advisor can assist you in using the information on this web site to your best advantage.  See our Business Directory for tax, accounting and finance-related firms in your area.
Please see our legal disclaimer regarding the use of information on our site, and our Privacy Policy regarding information that may be collected from visitors to our site.