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Registered Retirement Income Funds (RRIF) : A Quick Overview


A RRIF is a tax-deferred retirement income option available to Canadians who have reached the age of 71 and are required to convert their Registered Retirement Savings Plan (RRSP) or other retirement savings into income.


Conversion from RRSP:

•  Upon reaching age 71, individuals must convert their RRSP into either a RRIF or use the funds to purchase an annuity.

•  Converting to a RRIF allows retirees to maintain tax-deferred growth on their retirement savings while withdrawing a minimum amount each year as retirement income.


Tax-Deferred Growth:

•  Like an RRSP, investments held within a RRIF grow tax-deferred, meaning there are no taxes on investment earnings as long as they remain in the RRIF.

•  Taxes are only payable when funds are withdrawn from the RRIF.



•  Retirees are required to withdraw a minimum amount from their RRIF each year, starting the year after it's opened.

•  The minimum withdrawal amount is calculated based on the age of the RRIF holder and the value of the RRIF at the beginning of the year.

•  Withdrawals from a RRIF are considered taxable income in the year they are withdrawn, and taxes are withheld at the source by the financial institution unless otherwise requested.



•  While there is a minimum withdrawal requirement, there is no maximum limit on RRIF withdrawals, allowing retirees flexibility in managing their retirement income.

•  Retirees can choose how much they want to withdraw from their RRIF each year, provided they meet the minimum requirement.


Investment Options:

•  RRIF holders have flexibility in choosing the investments held within their RRIF, including stocks, bonds, mutual funds, and Guaranteed Investment Certificates (GICs).

•  The choice of investments depends on the individual's risk tolerance, investment objectives, and retirement income needs.


Estate Planning:

•  RRIF holders have the option to name beneficiaries to receive the remaining RRIF assets upon their death.

•  Designating beneficiaries can help facilitate the transfer of RRIF assets to heirs and minimize probate fees and estate taxes.


In summary, a Registered Retirement Income Fund (RRIF) is a tax-efficient retirement income option that allows Canadians to convert their retirement savings into regular income during retirement while maintaining tax-deferred growth on their investments. RRIFs offer flexibility in managing retirement income and provide options for estate planning.



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