At some point most registered retirement savings plans (RRSPs) are converted into registered retirement income funds (RRIFs). You must convert your RRSP by December 31 of the year you turn 71. At that time you can withdraw the full RRSP balance and pay tax on it, purchase an annuity from an insurance company, or convert the account to a RRIF. The vast majority of Canadians opt to convert to a RRIF. You do not need to wait until age 71 to convert — many people do so when they retire.
There are no age-based penalties for withdrawing from an RRSP or RRIF, although withdrawals are taxable as income. Exceptions exist for specific programs such as the Home Buyers’ Plan (HBP) and the Lifelong Learning Plan (LLP), which allow tax-deferred withdrawals to buy a first home or to pay for qualifying post-secondary education.
RRIF withdrawal rates
After the year you convert an RRSP to a RRIF, you must begin taking minimum annual withdrawals. The table below lists the minimum withdrawal percentages that apply to RRIFs established after 1992. The percentage is applied to the RRIF balance at the previous year‑end to determine the minimum amount you must withdraw in the current year.
| 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 or older | 20.00% |
| 75 | 5.82% |
The percentages shown are minimums — you can withdraw more in any given year unless the account is locked in. Those who prefer a quick reference can download the RRIF withdrawal rates chart for the current year.
Locked-in retirement accounts (LIRAs)
Locked-in retirement accounts exist because funds transferred from employer pension plans are often subject to restrictions. A pension plan member who leaves a defined contribution (DC) plan can generally move funds into a locked-in retirement account (LIRA). Members of defined benefit (DB) plans sometimes can transfer a commuted lump-sum value into a LIRA, but only if their plan rules permit taking the commuted value instead of future monthly pension payments. Some plans restrict commuted values based on factors such as the member’s age.
The name for these accounts varies by province. LIRA is used in B.C., Alberta, Saskatchewan, Manitoba, Ontario, Quebec, Nova Scotia, New Brunswick, and Newfoundland and Labrador. Other provinces use the term locked‑in RRSP. Unlike ordinary RRSPs, locked‑in accounts cannot be withdrawn freely; they must be converted to a locked‑in income product such as a life income fund (LIF). Newfoundland and Labrador also use locked‑in RIFs (LRIFs), while Saskatchewan and Manitoba have prescribed RRIFs.
LIF withdrawal rates
The earliest age at which you can convert a LIRA to a LIF depends on provincial rules (commonly 50 or 55). Once converted, you must begin taking minimum withdrawals the year after conversion. LIFs share RRIF minimum withdrawal rules, but, unlike RRIFs, most LIFs have maximum withdrawal limits that vary by province and territory. These caps are intended to preserve pension savings and avoid rapid depletion of funds. The table below summarizes maximum withdrawal percentages by age for various jurisdictions.
| Age at end of previous year | LIF/LRIF withdrawal rates: B.C., Alta., Sask., Ont., N.B., N.L. |
LIF withdrawal rates: Manitoba, Quebec, Nova Scotia |
LIF withdrawal rates: federal, Yukon, Northwest Territories, Nunavut |
|---|---|---|---|
| 55 | 6.51% | 6.40% | 5.16% |
| 56 | 6.57% | 6.50% | 5.22% |
| 57 | 6.63% | 6.50% | 5.27% |
| 58 | 6.70% | 6.60% | 5.34% |
| 59 | 6.77% | 6.70% | 5.41% |
| 60 | 6.85% | 6.70% | 5.48% |
| 61 | 6.94% | 6.80% | 5.56% |
| 62 | 7.04% | 6.90% | 5.65% |
| 63 | 7.14% | 7.00% | 5.75% |
| 64 | 7.26% | 7.10% | 5.86% |
| 65 | 7.38% | 7.20% | 5.98% |
| 66 | 7.52% | 7.30% | 6.11% |
| 67 | 7.67% | 7.40% | 6.25% |
| 68 | 7.83% | 7.60% | 6.41% |
| 69 | 8.02% | 7.70% | 6.60% |
| 70 | 8.22% | 7.90% | 6.80% |
| 71 | 8.45% | 8.10% | 7.03% |
| 72 | 8.71% | 8.30% | 7.29% |
| 73 | 9.00% | 8.50% | 7.59% |
| 74 | 9.34% | 8.80% | 7.93% |
| 75 | 9.71% | 9.10% | 8.33% |
| 76 | 10.15% | 9.40% | 8.79% |
| 77 | 10.66% | 9.80% | 9.32% |
| 78 | 11.25% | 10.30% | 9.94% |
| 79 | 11.96% | 10.80% | 10.68% |
| 80 | 12.82% | 11.50% | 11.57% |
| 81 | 13.87% | 12.10% | 12.65% |
| 82 | 15.19% | 12.90% | 14.01% |
| 83 | 16.90% | 13.80% | 15.75% |
| 84 | 19.19% | 14.80% | 18.09% |
| 85 | 22.40% | 16.00% | 21.36% |
| 86 | 27.23% | 17.30% | 26.26% |
| 87 | 35.29% | 18.90% | 34.45% |
| 88 | 51.46% | 20.00% | 50.83% |
| 89 or older | 100.00% | 20.00% | 100.00% |
Some jurisdictions allow unlocking of locked‑in accounts in exceptional circumstances. For example, Ontario permits unlocking for financial hardship related to medical expenses, arrears of rent or mortgage payments, first and last months’ rent, or low expected income. There are also non‑hardship unlocking provisions in various provinces, such as when life expectancy is shortened to two years or less, when the total locked‑in balance is small relative to the year’s maximum pensionable earnings (YMPE), where transfers exceed federal Income Tax Act limits, for long-term non-residents, or under certain short-term transfer-and-withdraw rules.
RRIF rules for account holders who are married or common-law
If you are married or in a common‑law partnership, you can elect to use your spouse’s age when calculating RRIF minimum withdrawals. Using a younger spouse’s age reduces the minimum withdrawal percentage. Couples also often use spousal RRSPs to shift retirement income between partners: the contributing spouse claims the deduction while the account remains owned by the receiving spouse. A spousal RRSP must be converted to a spousal RRIF by the end of the account holder’s 71st year, and RRIF withdrawal rules apply the same way whether the RRIF is personal or spousal. You can transfer a personal RRIF into a spousal RRIF, but not the reverse; once combined, the account is treated as a spousal RRIF.
Tax considerations of RRIF withdrawals
All RRIF withdrawals are fully taxable and are reported on a T4RIF slip. There is no withholding tax on the minimum required RRIF withdrawal, but the amount is added to your annual income and could create a tax balance owing. If you consistently underpay tax on RRIF withdrawals, you may be required to submit quarterly income tax instalments to the Canada Revenue Agency or Revenu Québec.
If you take additional cash from your RRIF beyond the minimum, withholding tax applies only to the excess at the following federal rates (provincial variations apply in Quebec):
- 10% (5% for Quebec) on amounts up to $5,000
- 20% (10% for Quebec) on amounts over $5,000
- 30% (15% for Quebec) on amounts over $15,000
Quebec residents face an additional provincial withholding tax (commonly 14%) on extra RRIF withdrawals, applied on top of the federal withholding. Taxpayers aged 65 or older may split up to 50% of eligible RRIF income with their spouse or common‑law partner for tax purposes, which can lower a couple’s combined tax bill. From age 65, RRIF payments also generally qualify as eligible pension income for the federal pension income amount tax credit.
RRIF withdrawal strategies
You can take RRIF payments in cash or in kind if your financial institution permits it, meaning you could transfer investments out of the account instead of selling them for cash. Withdrawing in kind may be useful when selling would incur costs or when assets are illiquid. The tax result is the same whether you withdraw cash or assets; this choice is an investment and liquidity consideration.
Withdrawals can be scheduled monthly, quarterly, or annually, and retirees should align the withdrawal frequency with their cash‑flow needs to ensure sufficient liquidity for required distributions. Consider whether to convert the entire RRSP to a RRIF immediately: if your income will be steady in retirement, conversion makes sense. If you expect fluctuating income from part‑time work, consultancy, or non‑registered capital gains, you might delay converting or convert only a portion to manage tax variability. It is even possible, though uncommon, to reconvert a RRIF to a RRSP under specific circumstances.
What happens to your RRIF when you die?
Upon death, RRIF proceeds are generally fully taxable unless they pass directly to a spouse or to a financially dependent child or grandchild. A surviving spouse can transfer an inherited RRIF into their own RRIF and keep the funds tax‑sheltered until their death. A RRIF with a designated beneficiary will be paid directly to that beneficiary without withholding tax; the estate may still have to report the RRIF value on the deceased’s final tax return. Because a beneficiary designation bypasses the estate, RRIFs with named beneficiaries are generally not subject to probate or estate administration tax, which is an important consideration when naming beneficiaries.
Know the RRIF withdrawal rules
Millions of Canadians hold RRSPs that become RRIFs as retirement approaches. Understanding RRIF rules — minimum withdrawals, tax treatment, locked‑in restrictions, and inheritance implications — is essential when planning income in retirement. Review your options, consider tax consequences and income stability, and align RRIF decisions with your broader retirement plan.
Read more about RRIFs:
- Should I draw down my RRIF to avoid estate taxes?
- RRIF withdrawals: What should seniors with million‑dollar portfolios do?
- How much should you withdraw from your RRIF?
- What happens to my RRIF when I die?
- Three ways to recession‑proof your RRIF