By December 31 of the year you turn 71, your Registered Retirement Savings Plan has to stop being an RRSP. That is the RRSP age 71 deadline set by section 146 of the Income Tax Act, and it leaves you three choices: transfer the balance into a Registered Retirement Income Fund (RRIF), use it to buy a qualifying annuity, or take the money out as cash.1Department of Justice Canada. Income Tax Act – Section 146 Do nothing and your financial institution will collapse the account for you, adding the full balance to your income for that tax year.
A collapsed RRSP is the expensive outcome. Combined federal and provincial rates exceed 50% in most provinces and reach 54.8% in Newfoundland and Labrador, so a $400,000 balance dropped onto a single year’s return can lose more than $200,000 to tax. The paperwork that avoids this takes an afternoon.
What “Maturity” by December 31 Actually Means
The Act uses the word “maturity” for the date your plan stops accepting contributions and starts producing retirement income. No registered plan is allowed to set a maturity date later than the end of the calendar year you turn 71.1Department of Justice Canada. Income Tax Act – Section 146 There is no grace period and no extension. Whichever option you choose has to be in place by that December 31.
Your Three Options
Transfer to a RRIF
This is the path most people take. A RRIF is essentially your RRSP running in the other direction: the investments stay sheltered inside the account, and you only pay tax on amounts you withdraw. The trade-off is that Ottawa sets a minimum you must withdraw each year, and that minimum rises with age. You can always take more than the minimum. You can never take less.
Buy a Qualifying Annuity
You can use your RRSP funds to buy an annuity from a licensed insurance company. The Act recognizes two forms: a life annuity that pays until death, or a term annuity that pays until the end of the year you turn 90.1Department of Justice Canada. Income Tax Act – Section 146 Because the annuity was bought with pre-tax RRSP dollars, every payment you receive is fully taxable. The appeal is a guaranteed cheque and no investment decisions. The cost is that you lose access to the capital, and the payout rate locks in at whatever interest rates were on offer the day you signed.
Take the Lump Sum
You can cash out. Your institution will withhold tax at source: 10% on the first $5,000, 20% on amounts from $5,000 to $15,000, and 30% on anything above $15,000 (lower rates apply in Quebec).2Canada Revenue Agency. Tax Rates on Withdrawals That withholding is a down payment, not the final bill. A large lump sum almost always lands you in a bracket where you owe considerably more when you file. This option rarely makes sense unless the balance is small.
You can also blend the three. A common approach is to move most of the RRSP to a RRIF, use a slice to buy an annuity for baseline income, and take a small amount as cash.
Completing the Conversion Before December 31
Contact your financial institution well before the deadline and ask for the transfer paperwork. The CRA no longer requires a specific federal form to move funds between registered plans; most institutions use their own.3Canada Revenue Agency. Transfer of Funds If you are transferring to a different institution, Form T2030 is available for direct transfers and ensures no tax is withheld during the move.4Canada Revenue Agency. T2030 Direct Transfer Under Subparagraph 60(l)(v)
Two decisions you make at setup matter for years afterward, and neither can be changed later. First, whether to name your spouse or common-law partner as the successor annuitant on the RRIF. Second, whether to base your future minimum withdrawals on your own age or your spouse’s, which lowers the required amount if your spouse is younger. Both are covered below.
Most institutions complete the conversion within a few weeks. Start the process by November. If the funds are moving between institutions, allow more time. Keep copies of every form and note the date and the name of whoever handled the file, in case something stalls near the deadline.
RRIF Minimum Withdrawals After Conversion
You owe nothing from the RRIF for the rest of the calendar year in which it is opened. The mandatory minimums begin on January 1 of the following year.5Canada Revenue Agency. Receiving Income From a RRIF Convert at 71 and your first required withdrawal is in the year you turn 72.
The minimum is the fair market value of the RRIF on January 1 multiplied by a prescribed factor for your age.6Canada Revenue Agency. Minimum Amount From a RRIF At 71 the factor is 5.28%; at 72 it is 5.40%; by 80 it has risen to 6.82%, and it keeps climbing after that.7Canada Revenue Agency. Chart – Prescribed Factors A $500,000 RRIF held by someone turning 72 requires a $27,000 withdrawal that year. You can take that as a single payment or spread it monthly or quarterly.
Every dollar withdrawn is taxable income. The withholding rules differ from an RRSP: the institution deducts no tax on the minimum amount, and applies the same 10/20/30% schedule only to anything you take above the minimum.8Canada Revenue Agency. Frequently Asked Questions (RRSPs/RRIFs) Because your minimum payments arrive with no tax deducted, you will owe the full tax on them at filing time. Setting money aside or asking the institution to withhold voluntarily prevents a surprise.
Using a Younger Spouse’s Age
If your spouse or common-law partner is younger, electing at setup to base the minimum on their age can meaningfully reduce what you must withdraw each year. For a spouse under 71, the formula is 1 divided by (90 minus the spouse’s age at the start of the year); at 71 and above, the prescribed-factor table applies using the spouse’s age.6Canada Revenue Agency. Minimum Amount From a RRIF A five-year gap effectively pushes you back several rows on the factor table and keeps more money sheltered. This election is made when the RRIF is opened and cannot be switched later.
Watch Out for the OAS Clawback
Because RRIF minimums are mandatory and rise every year, a large balance can push your income past the Old Age Security recovery threshold even if you only take the minimum. For the 2026 income year, the clawback begins when net income exceeds $95,323, and above that you repay 15 cents of OAS for every extra dollar of income.9Canada.ca. Old Age Security Pension Recovery Tax At high enough incomes, OAS disappears entirely.
The levers available at age 71 include converting some or all of the RRSP earlier so withdrawals start at a lower percentage, using a younger spouse’s age for the minimum calculation, and directing part of the balance into an annuity so it never sits in the RRIF driving the minimum higher. One additional tool, the Advanced Life Deferred Annuity, lets you transfer a capped portion of your registered assets (25%, subject to a lifetime dollar limit that was $180,000 for 2025) into a life annuity whose payments can be deferred until as late as the end of the year you turn 85.10Canada Revenue Agency. How to Purchase an Advanced Life Deferred Annuity (ALDA) Money sent to an ALDA is not counted in your RRIF for minimum-withdrawal purposes.
You Can Still Contribute to a Spousal RRSP
Closing your own RRSP at 71 does not end your ability to generate RRSP deductions. If your spouse or common-law partner is 71 or younger, you can keep contributing to their RRSP using your remaining deduction room.11Canada Revenue Agency. Spousal RRSPs or Common-Law Partner RRSPs The contribution reduces your taxable income and the funds grow sheltered in your spouse’s account. This is useful when pension or employment income keeps generating new RRSP room after 71.
Total contributions to a spousal RRSP cannot exceed your personal RRSP deduction limit for the year.12Canada Revenue Agency. Contributing to Your Spouse’s or Common-Law Partner’s RRSPs Watch the attribution rule: if your spouse withdraws from a spousal RRSP within two calendar years after the year you contributed, the withdrawal is taxed back in your hands rather than theirs.
Naming a Successor on the RRIF
The cleanest way to keep a RRIF intact after you die is to name your spouse or common-law partner as “successor annuitant” directly in the RRIF contract. When you die, your spouse simply takes over the account. Payments continue under the same terms, nothing is triggered as taxable, and your spouse assumes future minimum withdrawals and the tax on them.13Canada Revenue Agency. Spouse or Common-Law Partner as Successor Annuitant
Naming your spouse only as beneficiary works differently. The RRIF is wound up, the assets are paid out, and your spouse has until December 31 of the year following your death to roll those funds into their own RRSP (if they are 71 or younger) or RRIF on a tax-deferred basis. The end result can be similar, but the paperwork and timing are harder.
If the RRIF passes to anyone other than a spouse, common-law partner, or financially dependent child or grandchild, the full fair market value on the date of death is added to the deceased’s final return.14Canada Revenue Agency. Who Is the Beneficiary of the RRSP That can produce a large final tax bill for the estate, which is why the beneficiary designation you make when the account is opened is one of the more consequential choices in the conversion process.