Registered Retirement Income Fund (RRIF)
What it is
A Registered Retirement Income Fund is the payout phase of an RRSP. By December 31 of the year the account holder turns 71, an RRSP must be closed — the standard option is to roll the balance into an RRIF, which continues to shelter the funds from tax on their growth but requires a mandatory minimum annual withdrawal that increases with age.
The RRIF preserves the tax-deferred growth of the RRSP while forcing a gradual drawdown that the CRA can eventually tax. No new contributions can be made — an RRIF only holds what was transferred in from an RRSP (or another RRIF).
Who can open one
Anyone who has an RRSP and needs (or chooses) to convert it. Conversion can happen at any age, but must happen by the end of the year the account holder turns 71. Earlier conversion is possible and sometimes advantageous for pension-income tax-credit eligibility at age 65.
How contributions work
No new contributions. The account receives a single opening transfer from an RRSP (or consolidates multiple RRSPs), and from that point forward it only pays out.
Additional RRSP balances can be transferred in later — for example, a spousal RRSP maturing at age 71, or an employer pension commuted to an RRSP first and then rolled to the RRIF.
Tax treatment
Growth inside the RRIF compounds tax-free, just as it did in the RRSP. Every withdrawal is fully taxable as ordinary income in the year of withdrawal.
Minimum withdrawals are calculated from the prior year-end balance using an age-indexed percentage that rises each year — roughly 5% at age 72 climbing past 20% by the late 90s. Withholding tax is not applied to the minimum amount, but any withdrawal above the minimum has tax withheld at source (10%-30% depending on the excess amount).
Pension income eligible for the pension-income tax credit and pension income splitting becomes available at 65 for RRIF withdrawals — one common reason to convert an RRSP to a RRIF earlier than mandatory.
How withdrawals work
The minimum annual withdrawal schedule is federal and uniform across provinces. The CRA publishes the full table; broker statements show the calculated minimum for the current year based on the year-end balance and the holder's (or spouse's, if elected) age.
The minimum can be withdrawn in monthly, quarterly, semi-annual, or annual installments. If the account holder has a younger spouse, the withdrawal percentages can be based on the spouse's age (once elected, irrevocable) — slowing the mandatory drawdown.
At death, the RRIF balance generally becomes taxable to the estate in the year of death, unless rolled over to a surviving spouse or common-law partner (tax-deferred) or to a qualified dependant.