RRSPs RRIFs and TFSAs -> RRSP Conversion to RRIF -> RRIF minimum withdrawals
RRIF Minimum Annual Withdrawals
Income Tax Act s. 146.3(1), Reg. 7308(3), (4)
2020 Update re COVID-19 Pandemic: The amount of mandatory withdrawal from a RRIF in 2020 is reduced by 25% for all RRIF holders. This was announced by the federal government and the Quebec government. See our COVID-19 Resources page. To determine your 2020 minimum withdrawal, calculate the usual minimum and then multiply by 75%. The age of the RRIF holder does not matter.
As soon as an RRIF is set up, withdrawals can be made from it, unless it is a locked-in account, in which case maximum annual withdrawals will be in effect. If the account is not locked in, there is no limit to the withdrawal amount, but tax will be withheld on amounts withdrawn in excess of the minimum.
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necessary in the year a RRIF (Registered Retirement Income Fund) is set up, but there are minimum amounts that must be withdrawn annually starting in the year after setup.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".
If an individual has multiple RRIF (or a RRIF and a LIF or LIRA) accounts, the minimum withdrawal amount is calculated separately for each account. If the maximum amount is withdrawn from one LIF, or more than the minimum from one RRIF, it doesn't reduce the minimum amount that must be withdrawn from another RRIF of the same holder.
Use our RRSP/RRIF Withdrawal Calculator to project your earnings and withdrawals from your RRIF for the next 40 years. The 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 still use this calculator to project your earnings and withdrawals over the next 40 years.
When establishing a RRIF, the RRIF holder can usually specify to the financial institution or brokerage the timing of the minimum withdrawal, including whether it is to be taken out in a lump sum in one withdrawal (best for in kind withdrawals), or to be taken out in monthly payments. Once an RRIF is established, the required minimum annual withdrawal amount is usually shown 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 The information provided should also include the amount that has been withdrawn up to the statement date.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. Note: In 2020, tax will only be withheld from withdrawals that are in excess of the original unreduced minimum amount. See Economic Statement - New Measure for Annuitants of Registered Retirement Income Funds.
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 used to depend upon when the RRIF was started.
Prescribed Withdrawal Factors for RRIFs
The 2015 Federal Budget reduced the RRIF withdrawal factors for both pre-1993 and post-1992 RRIFs, and all RRIFs now use the same prescribed factors. The legislation for this change received Royal Assent in June 2015 and is now in effect, starting with 2015 withdrawals. See our Table of Prescribed Factors for RRIF Withdrawals, which also shows the % increase in the rate each year.
Income Tax Act s. 146.3 (1) definition "minimum amount" (b)
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. If the spouse is younger (there is no minimum age that can be used), this results in a lower minimum withdrawal, for annuitants who wish to make lower withdrawal amounts. If your financial institution has automatically converted your RRSP to a RRIF before you have completed the paperwork to make this election, this is not a problem, although they may tell you it is. As long as no payments have been received by you under the fund, you can make the election.
Once this election has been made, it is in place for the duration of the RRIF and cannot be changed, even in the case of divorce, separation, or the death of the younger spouse. However, if another RRIF is established and funds are transferred to the new RRIF, a new election can be made. See paragraph 10 of IC 78-18R6 (link at bottom).
Tax Tip: If you elect to use the age of a younger spouse, this doesn't prevent you from making larger withdrawals, but there will be withholding tax payable on the amount in excess of the minimum withdrawal.
Post-1992 RRIFs - Factors Before 2015
For a RRIF started after 1992, the prescribed factor was 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 - Factors Before 2015
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 was 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.
Canada Revenue Agency (CRA) Resources
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: October 21, 2021
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