The minimum age at which you can convert a registered retirement savings plan (RRSP) to a registered retirement income fund (RRIF) depends on provincial rules—commonly 50 in some provinces and 55 in others. Once you convert an RRSP to a RRIF, you must begin taking minimum annual withdrawals starting the year after conversion. These mandatory withdrawals are expressed as percentages of the RRIF’s value at the end of the previous year and increase with age. The table below lists the prescribed minimum withdrawal rates that apply to RRIFs established after 1992.
How to use this table: find your age at the end of the previous year and read across to see the minimum percentage of the account balance that must be withdrawn during the current year. These rates are applied to the RRIF balance as of December 31 of the prior year. Use the table to estimate required cash flows from your RRIF, plan taxable income for the year, and manage your portfolio’s liquidity to meet the withdrawal requirement.
| Age at end of previous year | Withdrawal rate for current year | Age at end of previous year | Withdrawal rate for current year |
|---|---|---|---|
| 55 | 2.86% | 76 | 5.98% |
| 56 | 2.94% | 77 | 6.17% |
| 57 | 3.03% | 78 | 6.36% |
| 58 | 3.13% | 79 | 6.58% |
| 59 | 3.23% | 80 | 6.82% |
| 60 | 3.33% | 81 | 7.08% |
| 61 | 3.45% | 82 | 7.38% |
| 62 | 3.57% | 83 | 7.71% |
| 63 | 3.70% | 84 | 8.08% |
| 64 | 3.85% | 85 | 8.51% |
| 65 | 4.00% | 86 | 8.99% |
| 66 | 4.17% | 87 | 9.55% |
| 67 | 4.35% | 88 | 10.21% |
| 68 | 4.55% | 89 | 10.99% |
| 69 | 4.76% | 90 | 11.92% |
| 70 | 5.00% | 91 | 13.06% |
| 71 | 5.28% | 92 | 14.49% |
| 72 | 5.40% | 93 | 16.34% |
| 73 | 5.53% | 94 | 18.79% |
| 74 | 5.67% | 95+ | 20.00% |
| 75 | 5.82% |
Example: if you were 70 at the end of the prior year and your RRIF held $200,000 on December 31, the minimum withdrawal for the current year would be 5.00% of $200,000, or $10,000. That amount is considered taxable income in the year it is withdrawn. For estate planning and tax-efficiency, consider how RRIF withdrawals will interact with other income sources (e.g., pensions, Old Age Security, CPP) and the timing of taxable events.
Notes and planning tips:
– These withdrawal rates apply to RRIFs established after 1992 and are based on prescribed formulas. The exact prescribed factors are maintained by the Canada Revenue Agency.
– The minimum withdrawal is mandatory, but you may choose to withdraw more than the minimum. Withdrawals above the minimum are also included in taxable income for the year.
– When planning withdrawals, consider portfolio liquidity, tax brackets, and potential impacts on age-tested benefits. If you expect to be in a lower tax bracket in a future year, it may be advantageous to defer discretionary withdrawals where possible.
Source: Rates calculated using the CRA’s prescribed factors formulas.
This excerpt was adapted from RRIF and LIF withdrawal rates: Everything you need to know by Jason Heath, CFP.
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Read more about RRIFs in Canada:
- Should you max out your RRSP before converting it to a RRIF?
- How to cope with the RRSP-to-RRIF deadline in your early 70s
- RRIF and LIF withdrawal rates: Everything you need to know
- Tax implications of making transfers between registered accounts