What is a RRIF? How Does a RRIF Work?


Synopsis:  In this article, we’ll dig deep into RRIFs answering questions like: what is a RRIF? How does a RRIF work?  Then we’ll dig into the details like the pros/cons, and the important withdrawal rules. Thanks to all subscribers for sending us their questions on RRIFs!

If you’re not comfortable with relying on just government benefits like Canada Pension Plan (CPP) or Old Age Security (OAS) for your retirement, then join the club. Neither are we!

At Cashflows & Portfolios, we’ve been contributing to Registered Retirement Savings Plans (RRSPs) to supplement any future Canada Pension Plan and Old Age Security government benefits for years now. This way, we have an opportunity to convert our RRSP assets into a very powerful, almost equally important tax-deferred account that is the Registered Retirement Income Fund (RRIF).

What is a RRIF?

How does a RRIF work?

How might you go about transferring your RRSP assets to your RRIF? Are there tax implications with that?

We’ve got you covered today with this updated post – everything you need to know about the RRIF and how it works.

What is a RRIF? How Does a RRIF Work?

Before we get to the RRIF, we need to have an RRSP.

Prior to establishing your RRIF, you might know that the Registered Retirement Savings Plan (RRSP) remains one of the wealth-building wonders of our Canadian world.

RRSPs have been around for decades in Canada – as a means to help (and encourage) Canadians to save for their retirement. The main benefit of this account is a tax-deferral benefit but there are far more benefits to contributing to your RRSP if you use the account wisely.

Make sure you check out our very comprehensive everything you need to know about RRSPs post here.

That post will help you understand the detailed ins and outs of the RRSP, when it makes sense to contribute to that account and why the RRSP is really not tax-free money.

If you want tax free retirement money, you’ll need to check out this monster post:

Everything you need to know about the Tax-Free Savings Account (TFSA).

What is a RRIF – RRIFs 101

As a popular choice for many Canadians (more on that in a bit in our pros and cons section), a RRIF is a federally registered account designed to provide you with a steady income at retirement by drawing down your hard-earned savings and investments.

The best way to think of a RRIF is the opposite of an RRSP:

  • An RRSP is for asset accumulation.
  • A RRIF is for asset decumulation.

Like an RRSP, a RRIF offers you multiple investment options. You can own a number of different types of investments inside the RRIF, as you draw down assets inside that account:

  • Cash
  • Guaranteed Investment Certificates (GICs)
  • Bond funds or bond ETFs
  • Individual stocks
  • Equity funds or equity ETFs

At Cashflows & Portfolios, to date, we own a mix of individual, Canadian stocks and low-cost, diversified ETFs in our RRSPs. We figure that’s a great game plan to maximize growth and income so that we have ample assets to draw down from our RRIF in the coming decades.

You can read about some of the assets we own, and why these low-cost ETF solutions might be a consideration for your investing journey here.

A brief history of the RRIF 

Interestingly, RRIFs actually haven’t been around as long as the RRSP – at least they didn’t come into effect in the late-1950s like the RRSP did.

The creation of the RRIF was announced in 1978 as part of the Canadian federal budget and came into effect later that year.

Although you have other options with your RRSP assets, such as withdrawing monies from the RRSP outright or using RRSP money to purchase an annuity, we believe the most flexible option with your RRSP is to convert it to a RRIF.

In fact, it is mandatory to either withdraw all the money for your RRSP, purchase that annuity, or convert your RRSP to a RRIF by the end of the year you turn age 71.

This is because the government wants to get some of its money back!

Kidding, although only a bit. Remember above the RRIF was established to help ensure RRSP account holders can have another alternative to earning an income stream with a great deal of control over their investments, but it is a tax-deferred account. RRSP withdrawals nor RRIF income is certainly not tax-free.

Let’s cover a few pros and cons of each option (RRSP cash withdrawals, annuity, and why the RRIF makes the most sense to us) in the sections below.

Pros and cons of using a RRIF

While most Canadians are fairly knowledgeable about the benefits of contributing to their RRSP, we believe even fewer Canadians understand the benefits of transferring their RRSP to a RRIF.

Here is a list of those benefits and why we will likely convert our RRSP to a RRIF at an appropriate time.

1. You can continue to grow your assets tax-deferred: All of your RRSP assets can be transferred in-kind, tax-free to your RRIF. Once in the RRIF, assets continue to grow on a tax-deferred basis. But keep in mind, any money withdrawn from your RRIF account is taxable in the year received.

2. You get an income stream without any withholding taxes on the minimum payment: While there is an annual minimum payment amount that must be withdrawn from your RRIF account (we’ll put a table for you below), there is no maximum payout amount. Withdrawals can include some scheduled payments and/or lump-sum payments – whatever you prefer. Unlike withdrawals from an RRSP, there are no withholding taxes deducted on your minimum RRIF payments.

To help you see the merits of RRIF vs. RRSP withholding taxes that may apply if you use the latter account, we’ve included this information below.

If you’re taking money out of your RRSP before you retire before a RRIF is established, you’re immediately going to pay a *withholding tax (with some exceptions):

  1. If you take up to $5,000, you’re going to pay 10%.
  2. If withdrawals are between $5,000 and $15,000, the financial institution will hold back 20%.
  3. If you withdraw more than $15,000, 30% is held back.

*Quebec has different withholding tax rates.

3. You can base your RRIF payments on your spouse’s age: While minimum payments are required when setting up RRIF accounts, you can elect that the minimum payment be based on your spouse’s age, providing additional flexibility if your spouse is younger than you!

4. You can split your pension income up to 50%: Retirees can split up to 50% of eligible pension income (with a spouse or common-law partner) for individuals 65 years old or older. Since RRIF income qualifies as eligible pension income, you might save more tax.

Beyond that, consider that starting age 65 – income from your RRIF qualifies for up to $2,000 towards the Pension Income Credit each year (if it’s not already being used with a private pension plan), which could mean substantial tax savings over time.

5. You can leave your RRIF to your spouse tax-free: If your spouse is named as the beneficiary of your RRIF, it can be transferred tax-free to their RRSP or their own RRIF. If you name your spouse a “successor annuitant”, they can take over your RRIF tax-free and start receiving RRIF payments. In both cases, your RRIF will not make up part of your estate and will avoid probate fees.

Check out this comprehensive post on My Own Advisor that walks you through, in detail, some considerations for TFSA, RRSP, RRIF and other account beneficiaries.

Are there different types of RRIFs?

Yes. There are two key ones in particular we want to highlight.

There are self-directed RRIFs, just like there are self-directed and personal RRSPs.

In your self-directed RRIF, you can hold many different kinds of investments: GICs, mutual funds, ETFs, stocks and bonds. We believe this is the best choice to deliver:

  • a wide range of investment choices, and
  • to change such choices as your needs or tolerance for risk changes as you age.

There are also spousal RRIFs. When a spousal RRSP plan is converted to a RRIF, it becomes a spousal RRIF where withdrawals are made by the annuitant (i.e., not the spouse who contributed the money).

If you’ve contributed to a spousal RRSP in the year or in either of the two preceding taxation years of the RRIF withdrawal, be aware that there may be income attribution back to the contributing spouse. Again, there are tax considerations with any spousal RRIF you may want to discuss with your accountant or a fee-only financial professional if unsure.

Are there other benefits that come with RRIFs?

You bet!

While your decisions may vary, we believe a RRIF can make the most sense to wind down your assets during retirement for these key reasons:

  1. RRSP assets can be moved “in-kind” to the RRIF (i.e., “as-is”) and remain tax-deferred. So, you don’t need to sell any RRSP assets if you don’t want to when you create a RRIF. Just a reminder that once some or all RRSP assets are moved over to the RRIF, any money withdrawn from your RRIF is taxable in the year it is received.
  2. You don’t need to move all RRSP assets to the RRIF. In fact, you only need to move all RRSPs “out” by the end of the year you turn age 71. By creating a RRIF at any age before age 71, provides major income flexibility in retirement.
  3. RRIF assets grow tax-deferred. That’s right! As you read above, the magic of compounding can continue well into your senior years since assets that remain within the account can continue to grow for more income, inflation-fighting power, and more!

Let’s look at more Q&As to see how you can best manage the assets you may hold inside a RRIF.

RRIF minimum withdrawals

Another nice perk of establishing a RRIF is there is no withdrawal necessary in the year a RRIF was set up.

That said, there are minimum amounts that must be withdrawn annually starting in the year after the RRIF was established.

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 (January 1) by prescribed withdrawal factors.

Like everything it seems with the government, they make this overly complex.

Prescribed Withdrawal Factors for RRIFs

The 2015 Federal Budget reduced the RRIF withdrawal factors for both pre-1993 and post-1992 RRIFs, so to our knowledge all RRIFs now use the same prescribed factors.

Essentially, these changes allow seniors to keep more of their hard-earned savings to grow inside their RRIF accounts tax-deferred, and the new minimums also reflect Canadians’ increasing life spans.

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

So, what that means in plain language: if the spouse is younger, a lower minimum withdrawal can occur.

Background – Prescribed Withdrawal Factors – Post-1992 RRIFs – Factors Before 2015

For a RRIF that started after 1992, the prescribed factor was 1/(90-age*), but only if the RRIF annuitant (owner) was under 71 years old.

*Age of the RRIF annuitant at the beginning of the year. For example: if the annuitant was 68 years old at the beginning of the year, the factor would be 1/(90-68) = 1/22 = 0.0454.

Background – Prescribed Withdrawal Factors Pre-1993 RRIFs – Factors Before 2015

For a RRIF started prior to 1993, this is “qualifying RRIF”.

The prescribed factor for a qualifying RRIF was 1/(90-age), but only if the RRIF annuitant was under 79 years old. For example: if the annuitant was 75 years old at the beginning of the year, the factor is 1/(90-75) = 1/15 = 0.0667.

Is this is making your head spin a bit, don’t worry, we’ll simplify the current RRIF withdrawal schedule in the table below. If you are however looking for more RRIF details related to withdrawal factors, please check out Canada Revenue Agency here.

Thanks to the folks at Taxtips.ca for these references.

RRIF minimum withdrawal factor table:

Taxtips.ca RRIF ages 55-70

The following table are the factors post age-71 for RRIFs:

Taxtips.ca RRIF age 71 plus

Tables and references from the stellar Taxtips.ca site.

Some notes on withdrawals and reminders about the table above:

  • Once a RRIF has been established, no further contributions to the RRIF can be made. Withdrawals must happen!
  • A minimum RRIF withdrawal is an annual obligatory amount that is cashed out of a RRIF and sent to the owner.
  • The RRIF withdrawal occurs without withholding tax – something you may recall that happens with the RRSP cash withdrawals.
  • All withdrawals are fully taxable. Remember, the government wants their tax-deferred loan to you back!
  • Required annual minimum payments generally increase as you get older.
  • In addition to cash, withdrawals can also be made in “in-kind” – meaning securities can be withdrawn at their fair market value. You’ll have to include the value of the withdrawal as income at tax time – but if you don’t need the money, you have the option to contribute the securities in-kind from a non-registered account to your TFSA without selling them (if you have the contribution room to the TFSA to do so). This way, your former RRIF assets can now grow tax-free (thanks TFSA!)
  • There are no direct transfers (cash or securities) from a RRIF into a TFSA.
  • To reduce your household’s overall tax bill, again, consider splitting RRIF income. The transferor is required to be 65 or over and can allocate up to 50% of their RRIF income to their spouse (both have to be Canadian residents). Sources of pension income other than RRIFs are also eligible.
  • If you have more than one RRIF account, you must withdraw at least the minimum annual amount from each of your accounts.
  • You’ll have to pay withholding tax only if you take out more money from your RRIF than the government-prescribed annual minimum amount. Withholding tax rates differ depending on your province of residence (e.g., Quebec).

Let’s tackle some specific Q&As!

Can I transfer money from a regular savings account or my taxable account into my RRIF?

Nope. Recall the RRIF is locked-in account per se, you must take money out as per the withdrawal schedule. Minimum withdrawals will apply.

Can I convert my RRSP to a RRIF before I turn 71?

Absolutely. See some of the benefits above! A reminder if you withdraw funds from your RRIF that exceed the minimum annual payment there will be withholding tax on the excess amount.

Is there a minimum amount needed to set up a RRIF?

There is usually no minimum amount to establish your RRIF but it would make sense you are opening this account to withdraw some meaningful income.

Can I have a RRIF and an RRSP?

Why not? The answer is you can have both accounts at the same time.

You must however, collapse the RRSP by the end of the year you turn age 71.

If I can have an RRSP and a RRIF, can I have more than one RRIF?

You bet.

Just like you have have more than one RRSP (e.g., a personal RRSP, a Group RRSP at work), you can also have more than one RRIF. Be careful though, have more than 1 or 2 RRSPs or RRIFs can be complex to manage. You must keep track of your minimum annual withdrawals from each account.

I have a Locked-In Retirement Account (LIRA). Can I convert this to a RRIF?

There are special options available for converting pension funds from a LIRA or locked-in RRSP, they call it “unlocking”, which is dictated by provincial and federal rules. We’ll cover LIRAs, LIFs and other similar accounts on the site in a dedicated post.

Does anything happen to my investments in my RRSP when I convert to a RRIF?

That’s your decision. You can however simply transfer your RRSP assets “as is” / in-kind to your RRIF. There are no tax implications to do so.

Can I still own foreign stocks, ETFs, or other international assets in my RRIF, like I did with my RRSP?

You bet.

Do I have to withdraw money from my RRIF right away? Can you give me an example?

No – you do not have to withdraw any money right away.

In the first year that your RRIF is opened, you are not required to make a withdrawal. However, you must make your minimum withdrawal in the following year, based on your age and the dollar value of your RRIF at the start of that year.

Yes, let’s look at an example with thanks to Get Smarter About Money:

“On January 1, 2015 you were 82.

The value of your RRIF on December 31, 2014 was $200,000.

Based on the previous 9.27% minimum withdrawal amount, you would have had to withdraw at least $18,540.

Based on the new minimum withdrawal amount of 7.38%, you must withdraw at least $14,760 in 2015.

This means you can leave an additional $3,780 in your RRIF to continue to grow tax-deferred.”

Can I choose the frequency of my RRIF withdrawals?

Yes! Important stuff.

RRIF withdrawals may be made monthly, quarterly, semi-annually or annually. You get to choose your withdrawal schedule that meets your needs. You might find however that an annual RRIF withdrawal, near the end of the year or near the very start of the year could be strategic to let your RRIF grow throughout the following 11+ months. We say that because you can consider moving tax-deferred (RRIF money) into tax-free (TFSA money). Read on!

Why am I forced to make a RRIF withdrawal when I don’t need the money?

Good question – because the government wants their tax-deferred loan back!

Like it or not, you are are required to withdraw a minimum annual amount from your RRIF, whether or not you need that income, and that money withdrawn is fully taxable.

We believe since the birth of the TFSA however, if you don’t need the money, put your RRIF income there inside that account to grow your money tax-free. Unfortunately, you cannot move your RRIF payments directly into a TFSA. Withdrawals can be made “in kind” though (i.e., “as is”) and given a fair market value as a non-registered asset. Then those assets can be moved inside your TFSA as part of this two-step process.

When to withholding taxes apply to my RRIF?

Only when you take out more money from your RRIF than the government-prescribed annual minimum amount – see those tables and our example above.

Can I do an in-kind transfer from my RRIF to my TFSA?

Well, you are required to withdraw the minimum annual amount from your RRIF, whether or not you need that income, and it is fully taxable.

When money is withdrawn from the RRIF, you may choose to contribute the money to a Tax-Free Savings Account (TFSA), if you have the contribution room but as far as we know – you cannot move your RRIF payments directly into a TFSA.

In addition to cash contributions from your RRIF withdrawals to your TFSA,RRIF  withdrawals can also be made in “in kind” – meaning securities can be withdrawn at their fair market value from a RRIF and transferred to a non-registered account without selling them. You’ll have to include the value of the withdrawal as income at tax time (and if the value of the securities exceeds the minimum annual amount, withholding taxes will apply).

Again, you can’t transfer funds tax-free from a RRIF to a TFSA. You can, however, use funds from a RRIF to add to a TFSA as long as you have available TFSA contribution room. One such type of transfer is an “in-kind transfer”. Like any RRIF withdrawal, you’ll have to include the withdrawal amount as income during tax time.

We’ve included a good resource to this information above.

RRIF Summary

As long as the government doesn’t change the rules (they can always change the rules!), RRIFs will likely remain a popular choice for many Canadians for their asset decumulation years.

When used wisely and effectively, these accounts can be excellent sources of retirement income and serve many Canadians well for any estate planning needs.

Our key reminders:

  • There is no maximum withdrawal limit for RRIFs.
  • All withdrawals are fully taxable.
  • If you take out more than the minimum amount, you’ll also pay withholding tax on the excess amount. Your financial institution will hold back an amount, based on the withholding tax rates, and pay it directly to the government on your behalf.
  • If you withdraw as little as possible in the early years of your RRIF, your savings will last longer. That’s because RRIF assets will continue to grow tax-deferred until you make the mandatory withdrawals.

We hope you enjoyed this comprehensive post and everything it entails. We’ll continue to amend and add to the article over time so you have one-stop shopping for your RRIF needs.

Thanks for your readership!

Further Reading – how did we get to the RRIF?

Check out our stellar Everything You Need to Know about RRSPs here.

Need any support with your retirement income projections?

Knowing how to save and invest wisely, whether that is via your RRSP, TFSA, or any other account, to help you get the most out of your portfolio is information we are happy to write about but we believe the bigger challenge is retirement income planning when it comes to RRIFs and asset decumulation in general. It can be a complex puzzle for most! On that note…

If you are interested in obtaining private projections for your personal financial scenario, read more about our retirement projections service.

Simply contact us via that link above to get started!

Related Reading:

Mark and Joe.

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32 thoughts on “What is a RRIF? How Does a RRIF Work?”

  1. I didn’t really understand the following statement:

    “You might find however that an annual RRIF withdrawal, near the start of the year could be strategic to let your RRIF grow throughout the following 11+ months.”

    I plan on making the withdrawals at the end of the year, just prior to the year in which l’ll be spending the money. My reasons are 1. Keeping the funds tax deferred in the market for as long as possible, and 2. Being close to recovering any overpayment of tax (although my projections suggest I’m always going to owe tax, which might mean making the withdrawal at the beginning of the year and putting the funds/stock/bonds in a non-registered account).

    Your thoughts would be welcome.

    • Great question Bob. I/we should have clarified that and will update the post.

      With TFSA room “opened up” as of January 1, every year, you can be therefore very strategic with your RRIF withdrawals in taking that money out of your RRIF towards the end of that year or early in the year and if you don’t need some or all of that money, the money can be moved into non-registered then to TFSA :)

      Tax-deferred money to tax-free money!

      Sorry if that wasn’t clear and we’ve updated the post accordingly!

      Your thoughts are aligned with ours:
      “Being close to recovering any overpayment of tax (although my projections suggest I’m always going to owe tax, which might mean making the withdrawal at the beginning of the year and putting the funds/stock/bonds in a non-registered account).”

      Thanks for your readership.

  2. Gents,
    Excellent and comprehensive as always! For a younger retiree (59) who will not yet benefit from splitting nor the pension credit (applicable at 65), is there any negatives to simply withdawing funds from RRSPs? I understand the withheld taxes but I figured Im going to have to pay them anyway?
    Thanks again

    • Great question Chuck. Personally, and again not tax advice, we’re not sure there is an advantage. RRSP withdrawals have taxes withheld, as to ensure the government gets their money and you figure out the difference at tax filing time. With RRIF min. withdrawals, no withholding taxes but you still pay the government their money back come tax time. :)

      The big advantage with RRIFs over RRSPs of course is money continues to compound away tax-deferred helping you fight longevity risk. That may or may not be needed for some!

      Best wishes Chuck!

  3. I have a question not covered above.

    Once a Manitoba Prescribed RRIF has been established, and the schedule of withdrawals set, can you make ad hoc lump sum withdrawals, or, if you want to take more out in that particular year, do you have to set the maximum amount at the beginning of the year?

    • Humm, we’ll have to look into that Bob re: prescribed RRIFs.

      A quick search on our part finds the following when it comes to RRIFs and the province of MB:

      Prescribed RRIF = “personal retirement income fund that is governed by the federal Income Tax Act (Canada). A prescribed RRIF is the same as a RRIF but is subject to certain rules under the act and regulations. Funds in a prescribed RRIF are not locked in.”

      There is some contact information on that link for MB – I would have to call them myself!

      Hope that helps,

      • CAP: I contacted Questrade to ask what withdrawals they would allow me to make from my PRIF. Here’s what I learned:

        – Although I’ve scheduled an annual December 1st withdrawal for the minimum amount, I can make add hoc withdrawals at any time and for any amount, right up to the maximum in the account.

        – If I make an ad hoc withdrawal that exceeds the required minimum, the scheduled withdrawal will still occur. However, the scheduled withdrawal can be cancelled by contacting Questrade.

        – For both the PRIF and the LIF, Questrade have a form that can be submitted at any time to change the scheduled withdrawal amounts.

        – If I don’t have the cash in my PRIF or LIF at the time of the scheduled withdrawal, Questrade will sell some of my ETF units/stocks. There will be a charge of $45. So, I’ll be making sure there is enough cash in the account prior to the withdrawal date. I’m pretty sure the same applies to RRIFs. (From their fee schedule: “Trades executed via the trade desk > $45.00/trade”).

        FYI: The LIF came from a LIRA (commuted DB pension plan), and the PRIF was a 50% one-time withdrawal from the LIF. This was all done in Questrade. The one-time 50% withdrawal, creating the PRIF, caused some confusion at the Qustrade end, but was resolved with a letter explaining fully what I wanted to do; not so easily achieved via the online chat.

        Please feel free to integrate any of the above into your post.

  4. I have a question regarding the adjusted cost base of the securities I hold in my RRSP after the RRSP is converted to a RRIF. I want to convert my RRSP in-kind and hope to keep the current YOC of my securities. They currently pay well over $32,000 a year in income from dividends in my RRSP and are reinvested. After conversion to a RRIF ( with the same broker where I have my RRSP), will my securities have the same adjusted cost base and provide the same income or will they be assigned a new price based on the date the transfer/conversion to a RRIF is done by the broker. I have owned the same securities in my RRSP for a very long time, they have significant unrealized capital gains and many have a YOC between 7 and 10% , resulting in a very healthy income stream which I want to tap into when I start my RRIF withdrawals. I will be eating into my capital eventually but I was hoping to mainly use my dividend income in the early years of my RRIF. I would really appreciate a response. Thanks.

    • Hi Jack,

      Great question. Given your RRSP and RRIF are both tax-deferred accounts, it should be easy. You can transfer assets over to RRIF from RRSP – I anticipate the brokerage would only take a few days for all transactions to settle. Assets can essentially move over in-kind/as-is; these investments do not have to be sold – and there is no impact to their related interest rate or maturity date.

      Now, If you don’t require the withdrawal as cash for income, you can transfer specific assets (total value at least equal to the
      minimum withdrawal amount) held in your RRIF to another type of investment account “in kind” without any sale. However…if in-kind withdrawal exceeds the minimum withdrawal amount you will be subject to withholding tax and must have cash available in the RRIF to pay this amount.

      So, you can continue to own the RRSP assets inside the RRIF, keeping your “healthy income” intact and you can tap that when you start withdrawals :)

      Hope that helps and let us know if you have more questions – we’ll do our best to answer.

  5. Thanks very much. This is very helpful. I was asking because in November 2020 I transferred in-kind my old investment account from Canadian ShareOwner ( Wealthsimple was winding them down ) to Scotia ITrade (my broker where all my accounts are held). After the transfer was completed, I discovered that Scotia ITrade’s adjusted cost base of my ShareOwner securities transferred to my iTrade investment account were the prices the shares were trading at on that particular day in November 2020 which was obviously much higher than what my adjusted cost base and the resulting YOC were at ShareOwner. FYI – I was contributing to my ShareOwner account between 2001 and 2008 and then stopped. So the prices were obviously much lower during that timeframe than in 2020. And the securities we are talking about are a couple of big banks, Enbridge, Microsoft, P&G, CNRail etc. All solid companies that have been increasing their dividends every year. So, the YOC and the resulting income stream were much higher at ShareOwner than what I ended up getting at ITrade based on November 2020 prices for the securities in my investment portfolio. I am assuming this happened because this was an in-kind transfer between two different institutions whereas my RRSP conversion to a RRIF is happening at ITrade so they should have the adjusted cost base and YOC of my securities readily available. Or perhaps I should have pressed the issue with iTrade at the time and asked for an explanation?thanks again for your response. I really appreciate it. And I am sure by now you know that I follow Tom Connolly’s and Henry Mah’s approach to investing.

    • No problem Jack. No, to further clarify, because the stocks or ETFs will change in value from one day to the next, of course the asset values will change but assuming you are not buying or selling assets moving from RRSP to RRIF, essentially whatever you hold in RRSP then in a few days, the same stocks or ETFs in the same quantities will appear in your RRIF. Very straightforward or it should be!!

      I know because I recently witnessed this with my parents’ conversion of RRSP to RRIF. They are just forced to convert recently.

      Potentially the issue you speak of happened between institutions and to be honest, adjusted case base values only really matter when dealing with taxable investing, to determine capital gains or losses. It’s really a non-issue when you’re dealing with RRSP or RRIF (tax-deferred) and TFSA (tax-free).

      Kudos to Tom Connolly really – he has done SO much for Canadian DIY investors. For sure, Henry Mah is a fan and I have his new book too. I hope to feature Henry again on My Own Advisor and maybe we’ll have him here too on Cashflows and Portfolios (CAP) :)

      Best wishes Jack,

  6. Thanks again. These are very valuable insights, Mark! And yes the plan down the road is to use some of the income stream from my RRSP/RRIF to help feed my and my wife’s TFSAs and our investment account. I really enjoy reading your blog – lots of great ideas and insights. Looking forward to your next feature on Henry Mah. Best wishes.



    • Most welcome. It is our hope as well (Joe and I) to use RRSP withdrawals strategically in the coming decades, maybe a bit of “live off dividends and distributions” to fund our retirement. We know many clients we are actually withdrawing from RRSPs/RRIFs in their 50s and 60s to avoid any concern with OAS clawbacks, etc. as they delay CPP benefits in particular.

      When retirees don’t need all the money, they can funnel any RRSP/RRIF assets to the TFSA and max that contribution out every year. Very smart for future tax-free income!!

      Best wishes and keep you posted on Henry, I have to finish his book this weekend and I owe him some interview questions!

  7. Hi CAP,
    Pretty sure I’ve read this article in the past and now have some questions after re-reading.

    First, can you expand on this statement: “Once a RRIF has been established, no further contributions to the RRIF can be made. Withdrawals must happen!”
    I thought I could continue to transfer assets from my RRSP over to the same RRIF?

    Next question is more of a LIF question. I have a LIRA with around 45K of VGRO in it that I want to move to my empty LIF. I want to sell VGRO and buy something that will generate a monthly distribution. I was looking at ZWU. I know the growth will not be there but the distribution is good. Also may look at a dividend ETF.

    Since I need to make withdrawals from the LIF, can you help me to understand this table: https://nesbittburns.bmo.com/getimage.asp?content_id=73262

    For the LIF maximum, do I choose federal or Ontario (where I live). I’m asking because if I choose ZWU, I believe the distribution will be greater than the minimum at my current age of 59-60.


    • Thanks for your question, Greg.

      You can open multiple RRIFs.

      You can transfer multiple RRSPs to one RRIF, or you can hold multiple RRIFs – it’s up to you.

      Also, you do not need to transfer all of your RRSP funds at once – you can do this over time if you want. However, once you have opened and start using your RRIF, you must make minimum withdrawals, with the amount based on your age.

      We believe having multiple RRIFs will be complex and confusion tax-wise for many investors, so likely best to avoid that.

      In terms of your second question, have you looked at our list of dividend ETFs?

      Those are some of our favourites.

      Withdrawals from the LIF can be at min. or max. Min. will make the account last longer. Max, not so much!

      For small LIFs, potentially best to get $$ out of LIF and move any money to TFSA is money is not needed for spending purposes. So, correct, LIF tables are based on age for withdrawal criteria.

      Hope that helps a bit!

      • Question #1 is not clearly answered: Can I open one RRIF account and transfer funds from RRSP to this same account more than once, or do I have to set up a new RRIF account every time I want to transfer funds form RRSP to RRIF?

          • My question is whether I need to open a new RRIF account every time I wish to transfer funds from my RRSP (before I turn 71). The article says: “Once a RRIF has been established, no further contributions to the RRIF can be made. Withdrawals must happen!
            “. Therefore, if I understood correctly, every time I wish to transfer funds from RRSP to RRIF, I need a new RRIF account. Am I missing something here? Thanks for taking the time to reply to our questions.

          • Hi Yael,

            Like a bank account, once the RRIF account is open, you can fund the account with cash, stocks, bonds, etc. into it.

            So, say you have $200,000 in your RRSP. You can decide to move part of that money $100,000 or $150,000 or $200,000 (all of it) into the RRIF.

            You are forced by regulations to collapse your RRSP in the year you turn age 71. Meaning, the RRSP account cannot continue. The money must be moved or transferred somewhere other than a RRIF.

            So, what many investors do is the convert the entire RRSP ($200,000) in this example, into a RRIF.

            You don’t have to convert all RRSP assets into a RRIF. There are other options. But most people consider this because it’s easier for overall portfolio management.


  8. Hello CAT,

    I learned something new from your article regarding moving securities “in-kind” from RRIF to TFSA through “non-registered” account.
    However as far as I know when I move securities “in-kind” from “non-registered” account to TFSA it will be considered as a sell for Tax purposes although no securities are sold physically. I’ll have to pay tax when I submit my tax return files. Does this rule applies if I move securities “in-kind” first from RRIF to “non-registered” account and after that to TFSA or it is treated differently.


  9. Hi:

    In your key reminders, should you also mention the following in light of those wishing to withdraw only the gov’t-prescribed annual minimum amount for various reasons such as no need for extra pension money, family members have long life-span , excellent health…?
    “The balance of your RRIF gets fully taxed as pension income on your year of death which can bring you in a higher tax bracket up to 52%.”

    • Great additions to add to a future, updated post – we like this one in particular Michael: “No need for extra pension money…”.

      We believe a major consideration about when to convert RRSP to RRIF, is not just about longevity, taxation, etc., it’s really about wanting to enjoy the money now/today including gifting money to family if you don’t really need the money. Some folks are in a very lucky position to do so….


  10. Hi, I have a question about taxation of RRIF withdrawals. My understanding always was (and your piece on RRIFs seems to confirm it) that the minimum withdrawals are not subject to withholding taxes. It’s the amount in excess of the minimum withdrawal that has withholding tax applied to it. In my own RRIF I take my annual minimum on a semiannual basis for a total of two withdrawals. The first happens at the end of June and the second at the end of December. Also for this year, I am planning an additional withdrawal (approximately an additional $10,000) in excess of the minimum (which comes up to almost $30,000 ) to cover some unexpected expenses (our furnace died just hours before we left for Panama for three weeks). I am planning to take this additional withdrawal after the first instalment minimum withdrawal at the end of June. So, my understanding was that the withholding tax in the amount of $2,000 (20% of the additional $10,000) would only be applied in this case. But I just read in another blog that a withholding tax of 30% will be applied to the entire amount taken out this year (I.e. the minimum withdrawal of $30,000 plus the additional $10,000) for a total of $12,000 and it will be deducted from the second withdrawal scheduled for December. Is that correct? I am trying to plan my cash flow for the year so any insight you can provide would be greatly appreciated. Thanks

    • Hi Jack!

      Thanks for reading…again, not personal tax advice :)

      When it comes to RRIF withdrawals, as long as the RRIF min. is set-up then no withholding tax.

      One source:

      So, correct, RRIF withdrawals in excess of RRIF min. will be subject to withholding tax.

      You can withdraw more, but not less than the annual RRIF minimum. The excess amount you withdraw from your RRIF cannot be applied as part of your minimum for the next year. You can choose to receive your RRIF payments monthly, quarterly, semi-annually or annually, depending on your personal needs. If you do not require income from your RRIF to meet your financial needs, you may consider receiving the annual minimum payment at the end of the year to maximize the tax-deferral benefits of your RRIF.

      Any $$ beyond the RRIF min., then withholding will apply.

      Another decent source too.

      Hope that helps!


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