What a RRIF is

A Registered Retirement Income Fund is the mandatory de-accumulation account that follows your RRSP. Where an RRSP exists to help you save, a RRIF exists to make sure you eventually take the money out — and pay tax on it. The federal government did not create the RRSP for indefinite tax deferral; the deal has always been "save now, spend (and pay tax) later." The RRIF is how "later" is enforced.

Mechanically, a RRIF is almost identical to an RRSP. You can hold the same investments, keep the same custodian, and watch growth continue tax-deferred. The two key differences are: (1) you cannot make new contributions to a RRIF, and (2) you must withdraw a minimum amount each year, set by the federal government based on your age.

The 2026 numbers at a glance

• Mandatory conversion: By December 31 of the year you turn 71
• Minimum withdrawal at 71: 5.28% of the January 1 balance
• Minimum withdrawal at 80: 6.82%
• Minimum withdrawal at 90: 11.92%
• Minimum withdrawal at 95+: 20% (capped)
• Withholding on minimums: 0%
• Withholding on amounts above the minimum: 10% / 20% / 30% based on amount

The minimum withdrawal table

The required percentage rises each year. A selection:

Spousal-age election: you can base your minimum on the age of a younger spouse, which permanently lowers your required withdrawals.

When to convert

The latest you can convert is December 31 of the year you turn 71. The earliest you can convert is any time you choose — there is no minimum age. Once converted, you are subject to the minimum withdrawal schedule starting the year after conversion.

Some retirees convert early, in their 60s, to start drawing down RRSPs before OAS clawback kicks in or before forced minimums in their 70s push them into a higher tax bracket. The decision is highly personal and depends on your other income, life expectancy, and whether you want pension-splitting with a spouse (which becomes available at 65 for RRIF income, but not for RRSP withdrawals).

How withdrawals are taxed

Every dollar that leaves a RRIF is added to your taxable income for that year. There is no special tax treatment for the "growth" portion — RRIF withdrawals are taxed as ordinary income, the same as employment or pension income.

Withholding tax is only applied to amounts above the annual minimum. If your minimum is $20,000 and you take exactly $20,000, your institution remits $20,000 with no withholding. If you take $30,000, the extra $10,000 has 20% withheld up front. The withholding is a prepayment of your eventual tax bill, not a final tax — the actual liability is settled when you file your return.

Pension income splitting

Once you are 65, RRIF income qualifies as eligible pension income for the federal pension income amount and for income splitting with a spouse. By transferring up to 50% of your RRIF income to a lower-income spouse on your tax return, a couple can significantly reduce combined tax — sometimes saving thousands per year.

Estate planning with a RRIF

Three options govern what happens at death:

• Successor annuitant (spouse only): The RRIF transfers to your spouse and continues unchanged. No tax is triggered at death.
• Beneficiary designation (spouse, dependent child, anyone): The RRIF is collapsed and the value is paid to the beneficiary. The deceased's estate pays the tax — unless the beneficiary is a spouse or financially dependent disabled child, in which case rollover rules apply.
• No designation: The full RRIF balance is added to the deceased's final tax return — often pushing the estate into the highest tax bracket.

Common RRIF mistakes

1. Forgetting to convert by December 31 of age 71. The entire RRSP balance becomes taxable in that year if missed.
2. Not using the spousal-age election. If your spouse is younger, basing minimums on their age permanently reduces required withdrawals.
3. Holding only minimum-volatility assets. A RRIF can still hold equities — the balance often needs to last 25+ years.
4. Not coordinating with OAS clawback. Forced RRIF minimums in your 70s can push net income above $93,454 and start the OAS Recovery Tax.
5. Failing to name a successor annuitant. Naming your spouse as beneficiary instead of successor can create unnecessary tax friction at death.
6. Withdrawing only the minimum. If the RRIF is large, low minimum withdrawals leave a large taxable estate at death.

What changes in 2026

No structural changes to RRIFs were announced in the 2026 federal budget. The minimum withdrawal percentages, conversion deadline, and withholding rates remain the same.