The rules for a Registered Retirement Income Fund (RRIF) come down to four things: you must convert your RRSP into one by December 31 of the year you turn 71, you must withdraw a minimum amount each year starting the year after you open it, every dollar you take out is taxed as ordinary income, and what happens to the account when you die depends entirely on who you named as beneficiary. Everything else is detail on those four points.
When You Have to Open a RRIF
The deadline is firm: December 31 of the year you turn 71. You can convert earlier if you want income sooner, and there is no minimum age for opening the account.
Missing the deadline is expensive. The RRSP collapses, the full balance is treated as a lump-sum withdrawal, and the entire amount is added to your income for that year on top of withholding tax. A large balance forced out in one year can push you into the top bracket and trigger clawbacks on income-tested benefits.
No minimum withdrawal is required in the year you set the RRIF up. Your first mandatory payment happens in the following calendar year.1Canada Revenue Agency. Receiving Income From a RRIF Convert in December of the year you turn 71 and your first payout comes in the year you turn 72.
How Much You Must Withdraw Each Year
On January 1, the market value of your RRIF is multiplied by a prescribed factor based on your age. That’s your minimum for the year. You can take more, never less.
If you’re 70 or younger, the factor is 1 divided by (90 minus your age). A 65-year-old sits at 4.00%. Starting at 71, the CRA uses a fixed schedule that climbs each year:2Canada Revenue Agency. Chart – Prescribed Factors
- Age 71: 5.28%
- Age 75: 5.82%
- Age 80: 6.82%
- Age 85: 8.51%
- Age 90: 11.92%
- Age 95 and older: 20.00%
The 20% rate at age 95 is the permanent ceiling and applies every year after that.
Electing a Younger Spouse’s Age
You can base the minimum on the age of your spouse or common-law partner instead of your own. A younger age produces a smaller factor, so a smaller mandatory withdrawal, and more money keeps growing tax-deferred inside the account.3Canada Revenue Agency. Minimum Amount From a RRIF
You must make this election when the RRIF is first set up, before any payment comes out. Once chosen, it cannot be reversed.4Department of Justice Canada. Income Tax Act – Section 146.3
How RRIF Withdrawals Are Taxed
Every dollar withdrawn is regular income on your tax return for the year. No capital gains treatment, no dividend tax credit. It stacks on your other income and is taxed at your marginal rate.
Withholding on Amounts Above the Minimum
No tax is withheld on the minimum amount itself.5Canada Revenue Agency. Frequently Asked Questions (RRSPs/RRIFs) Withdraw more than the minimum and the carrier must withhold tax on the excess. Outside Quebec, the rates are:6Canada Revenue Agency. Tax Rates on Withdrawals
- Up to $5,000 excess: 10%
- $5,001 to $15,000 excess: 20%
- Over $15,000 excess: 30%
Quebec residents face lower federal withholding of 5%, 10%, and 15% at those brackets, with Revenu Québec applying its own provincial withholding on top. Withholding is just a prepayment. Your actual bill is settled when you file.
Pension Income Credit at 65
If you’re 65 or older, RRIF withdrawals qualify for the federal pension income amount, a credit on up to $2,000 of eligible pension income.7Canada Revenue Agency. Pension Income Amount At the 15% federal rate, that’s $300 off federal tax, and most provinces offer a matching credit. Some people convert to a RRIF before 71 specifically to unlock this credit at 65.
Splitting Income with a Spouse
Once the RRIF holder is 65 or older, up to 50% of the RRIF income can be reported on a spouse or common-law partner’s tax return.8Canada Revenue Agency. Pension Income Splitting Both spouses must be Canadian residents on December 31 and not living apart because of a relationship breakdown. Shifting income to the lower-earning spouse can lower the couple’s combined tax and help the higher earner stay under the OAS clawback threshold.
Effect on Old Age Security
RRIF withdrawals count toward the net income figure that triggers the OAS recovery tax. For the 2026 income year, OAS starts being clawed back once net income passes $95,323, at 15 cents on every dollar above the line.9Canada Revenue Agency. Old Age Security Pension Recovery Tax Large withdrawals push you across it quickly, which is why the spouse-age election and pension splitting matter beyond the immediate tax savings.
What You Can Hold Inside a RRIF
A RRIF holds the same range of investments as an RRSP: publicly traded stocks and bonds on a designated stock exchange, mutual funds, ETFs, GICs, government savings bonds, and investment-grade corporate debt.10Canada Revenue Agency. Income Tax Folio S3-F10-C1, Qualified Investments – RRSPs, RESPs, RRIFs, RDSPs, TFSAs Everything inside grows tax-free until withdrawn.
Some assets are offside. Cryptocurrency, rare coins held for collectible value, and over-the-counter foreign exchange contracts are non-qualified investments. Acquiring one triggers a special tax of 50% of the investment’s fair market value when it was acquired or became non-qualified.11Canada Revenue Agency. Tax Payable on Non-Qualified Investments on RRSPs and RRIFs That tax is refundable if the investment is removed promptly, but any income earned on it while it sits in the account can attract a separate 100% advantage tax.
Prohibited investments are narrower: shares or debt of a corporation where you own 10% or more, or other holdings where you have a significant connection. If an investment is both non-qualified and prohibited, the prohibited investment rules take priority.
What Happens to a RRIF When You Die
The tax treatment on death runs from no immediate consequence to a bill on the entire account value. It all depends on the beneficiary designation.
Spouse as Successor Annuitant
Naming a spouse or common-law partner as successor annuitant is the cleanest outcome. The RRIF continues in the survivor’s name with no deemed disposition and no immediate tax. The surviving spouse takes over the account and reports the payments as their own income going forward.12Canada Revenue Agency. Death of a RRIF Annuitant, PRPP Member, or ALDA Annuitant This can be set through the RRIF contract or a valid will.
Financially Dependent Children or Grandchildren
A financially dependent child or grandchild gets better treatment than an arm’s-length beneficiary. If the dependent has a physical or mental disability, the RRIF can be rolled tax-deferred into their own RDSP, RRSP, RRIF, or qualifying annuity. A dependent minor without a disability can transfer the inherited amount into a term annuity that pays out by age 18.13Canada Revenue Agency. Amounts Paid From an RRSP or RRIF Upon the Death of an Annuitant
Any Other Beneficiary
For anyone else, the full fair market value of the RRIF at the date of death is included on the deceased’s final tax return. The entire balance is taxed as income in a single year, often at the top bracket.12Canada Revenue Agency. Death of a RRIF Annuitant, PRPP Member, or ALDA Annuitant The named beneficiary receives the money; the estate carries the tax.
Setting One Up
You open a RRIF with a carrier: a bank, trust company, credit union, or insurance company registered with the CRA.14Canada Revenue Agency. Registered Retirement Income Fund (RRIF) The application asks for your personal information, your existing RRSP details, your beneficiary designation, and whether you’re electing to use a spouse’s age for the minimum calculation.
Assets move from your RRSP to the RRIF on a tax-free basis, and they can move in-kind. You don’t have to sell stocks, bonds, mutual funds, ETFs, or GICs to make the transfer. Multiple RRSPs can be consolidated into one RRIF or split across several. There’s no cap on how many RRIFs you can hold, but each one calculates its own minimum independently.