RRIF (Registered Retirement Income Fund) in Canada: Complete Guide

RRIF (Registered Retirement Income Fund) in Canada: A Complete Guide for 2025

Published on June 18, 2025 | By WealthFusions Finance Team

Table of Contents

Understanding RRIF (Registered Retirement Income Fund) in Canada

A RRIF is a retirement income vehicle that Canadians use to convert their Registered Retirement Savings Plan (RRSP) savings into a steady stream of retirement income. It is a government-registered account designed to provide regular income payments during retirement, while allowing investments to continue growing tax-deferred.

Feature	Description
Purpose	To provide retirees with income by withdrawing funds from RRSP savings gradually.
When to Open	Must convert your RRSP into a RRIF by December 31 of the year you turn 71.
Minimum Withdrawals	Annual minimum withdrawals are based on your age and RRIF value, increasing each year.
Taxation	Withdrawals are considered taxable income in the year received.
Investment Options	You control how your RRIF funds are invested — stocks, bonds, mutual funds, GICs, etc.
Withdrawals	Can be taken monthly, quarterly, annually, or lump sum; must meet minimum annual withdrawal.
Estate Planning	Can name beneficiaries; remaining funds may bypass probate upon death.

Key Rules & Tips for RRIFs

Mandatory withdrawals: You must withdraw at least the minimum amount annually, based on a government formula.
Withdraw early: You can start RRIF withdrawals before age 71 if you wish.
No new contributions: RRIFs do not accept new contributions, unlike RRSPs.
Tax planning: Plan withdrawals to minimize taxes — e.g., withdrawing less during low-income years.
Spousal RRIF: You can name your spouse as successor annuitant for continued income after death.

💡 Tip: Consult a financial advisor to balance RRIF withdrawals and other income sources for optimal retirement tax efficiency.

Approaching retirement? If you have an RRSP, you’ll need to convert it into a Registered Retirement Income Fund (RRIF) by the end of the year you turn 71. But how does a RRIF work? What are the minimum withdrawal rules, tax implications, and strategies to optimize your income?

This in-depth guide will help you understand how a RRIF fits into your Canadian retirement income plan—including tables, comparisons, withdrawal strategies, and tax-saving tips. Whether you’re nearing retirement or helping a loved one, this guide simplifies RRIFs so you can make informed financial decisions.

1. What Is a RRIF and How Does It Work?

A Registered Retirement Income Fund (RRIF) is a government-registered account designed to provide regular retirement income from your RRSP savings. Unlike an RRSP, you can’t contribute to a RRIF—only withdraw from it. Here’s how it works:

You must convert your RRSP into a RRIF by December 31 of the year you turn 71.
Once converted, your RRIF account continues to grow tax-free until funds are withdrawn.
You must begin making minimum annual withdrawals starting the year after you open your RRIF.

2. RRIF Minimum Withdrawal Rates (2025)

The Canada Revenue Agency (CRA) mandates a minimum annual withdrawal based on your age. Here’s a table of the 2025 minimum withdrawal percentages:

Age	Minimum % Withdrawal	Example: RRIF Value $100,000
65	4.00%	$4,000
71	5.28%	$5,280
75	5.82%	$5,820
80	6.82%	$6,820
85	8.51%	$8,510
90	11.92%	$11,920

Tip: You can use your spouse’s age to calculate the minimum withdrawal if they are younger, helping to reduce taxable income.

3. RRIF vs RRSP: Key Differences

Feature	RRSP	RRIF
Purpose	Retirement savings	Retirement income
Contributions allowed?	Yes, until age 71	No
Minimum withdrawals?	No	Yes, yearly
Tax-sheltered growth?	Yes	Yes
Taxed on withdrawals?	Yes	Yes
Can hold same investments?	Yes	Yes

4. Investment Options in a RRIF

You can hold the same investments in a RRIF as in your RRSP:

Mutual funds
ETFs
Stocks & bonds
GICs (Guaranteed Investment Certificates)
Cash

Make sure your portfolio is adjusted for lower risk and regular income as you enter retirement.

5. RRIF Taxation: What You Need to Know

Withdrawals from a RRIF are 100% taxable as regular income in the year received. Tax is not withheld at source for minimum required withdrawals, but you must still report the income on your tax return.

Withholding tax applies to withdrawals that exceed the minimum:

Up to $5,000 — 10%
$5,001 to $15,000 — 20%
Over $15,000 — 30%

Note: Rates are higher in Quebec due to provincial taxes.

6. RRIF Withdrawal Strategies

Delay withdrawals: Open your RRIF at 71 but start withdrawing at 72 to maximize tax-free growth.
Split income: Split up to 50% of RRIF income with a spouse if you’re both 65+ to reduce taxes.
Use a TFSA: Withdraw from RRIF and contribute to a TFSA if you don’t need the money immediately.
Withdraw strategically: Consider starting small RRIF withdrawals before 71 to reduce OAS clawbacks later.

7. What Happens to Your RRIF When You Die?

If you pass away with a RRIF, here’s what could happen depending on your beneficiary:

Spouse as beneficiary: RRIF can transfer tax-free to their RRIF or RRSP.
Non-spouse beneficiary: Full RRIF value is taxed in your final return before distribution.
No named beneficiary: RRIF becomes part of your estate and may be taxed at highest marginal rate.

Tip: Always name a beneficiary to avoid delays and probate fees.

Conclusion: Start Planning Early for RRIF Success

Understanding and planning your RRIF strategy is crucial to making the most of your retirement income. With proper withdrawals, investment mix, and tax planning, your RRIF can last for decades while supporting your lifestyle. Don’t leave it to chance—review your RRSP conversion plan today.

Book a free retirement strategy session with a WealthFusions advisor to ensure your RRIF plan is optimized for growth, stability, and tax efficiency.

Frequently Asked Questions

1. When do I have to convert my RRSP to a RRIF?: By December 31 of the year you turn 71.
2. Can I withdraw more than the minimum from a RRIF?: Yes, but excess withdrawals are subject to withholding tax.
3. Are RRIF withdrawals taxed?: Yes, they are taxed as ordinary income at your marginal rate.
4. What happens if I don’t take the minimum RRIF withdrawal?: You may face penalties. The CRA will charge 1% per month on shortfalls.
5. Can I convert part of my RRSP into a RRIF?: Yes, partial conversions are allowed at any age.
6. Can I have multiple RRIF accounts?: Yes, you can open more than one RRIF if desired for diversification or legacy planning.
7. Does a RRIF affect OAS benefits?: Yes, high RRIF income can trigger the OAS clawback if your income exceeds $90,997 (2025 threshold).
8. Can I name a beneficiary for my RRIF?: Yes, and it’s highly recommended to avoid probate and taxes on your estate.