How RRIF’s work

Retirement Financial Planning

How RRIF’s work


A registered retirement income fund (RRIF) is a common way to turn retirement savings into income. Here are some important facts you need to know.

While most Canadians understand the importance of putting money into their RRSPs, there is less chatter about what to do with your retirement nest egg once you’re forced to withdraw those funds.

RRSPs are great vehicles for driving your retirement savings, but ultimately these accounts have an expiry date. By law, you must convert your RRSP into some form of income by December 31 of the year you turn 71. But if you simply convert your RRSP to cash, this additional income can leave you with a massive tax bill. So what’s the best way to deal with your retirement savings when you turn 71?

As an alternative to withdrawing your savings as cash (or purchasing an annuity, another option), an excellent way to maximize your hard-earned savings is to transfer your RRSP funds into a registered retirement income fund, commonly known as a RRIF.

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