A Registered Retirement Income Fund (RRIF) is the most common destination for RRSP funds in retirement. By December 31 of the year a Canadian turns 71, all RRSPs must be collapsed: converted to a RRIF, used to purchase a registered annuity, or fully withdrawn (rare). Most Canadians convert to a RRIF because it preserves tax deferral and provides withdrawal flexibility.
Minimum withdrawal rules
Each year, a RRIF holder must withdraw at least the prescribed minimum. The minimum is calculated as 1 / (90 – age) for ages up to 71, then by a fixed regulation table. The first minimum withdrawal is required in the year AFTER conversion, not the conversion year itself.
Tax treatment
RRIF withdrawals are taxable as income at the recipient’s marginal rate. The minimum required withdrawal is exempt from withholding tax; amounts above the minimum are subject to 10% / 20% / 30% withholding (Quebec rates differ).
Investment options
RRIFs hold the same eligible investments as RRSPs: stocks, ETFs, mutual funds, GICs, bonds, and cash. Investment growth inside a RRIF continues tax-deferred until withdrawal.