Quick answer: Often yes, if the savings let you delay CPP and OAS to 70. Pulling RRIF income in your early 60s converts taxable RRSP balances at lower brackets and unlocks bigger lifetime CPP/OAS payments.
What this means: The math depends on health, life expectancy, and whether you have other taxable income before 65. It works best when one spouse has a large RRSP and modest other income.
What to do next: See the conversion timeline and decision path stage by stage. Read the conversion rules →
You must convert your RRSP to a RRIF, an annuity, or a lump-sum withdrawal by December 31 of the year you turn 71. Many retirees benefit from converting earlier, between ages 65 and 71, to use the pension income amount, qualify for pension income splitting with a spouse, and draw down the RRSP at lower tax rates before CPP and OAS start. This is especially useful when delaying CPP to 70 and using RRSP/RRIF withdrawals to bridge the gap. Once converted, RRIFs have a CRA-prescribed minimum withdrawal each year that grows with age.
The conversion deadline and your options
| Option at end of year you turn 71 | Detail |
|---|---|
| Convert to a RRIF | Most common. Investments stay in similar holdings. Mandatory minimum withdrawal each year. |
| Buy an annuity | Lifetime monthly income. Locked in. |
| Withdraw the full balance | Entire amount taxable in the year of withdrawal. Almost always the worst option. |
2026 RRIF minimum withdrawal table
The minimum is calculated as a percentage of the RRIF balance on January 1 of each year. For a partner-based election, the percentage uses the younger spouse’s age. Selected ages:
| Age (Jan 1) | Minimum withdrawal % |
|---|---|
| 65 | 4.00% |
| 70 | 5.00% |
| 71 | 5.28% |
| 72 | 5.40% |
| 75 | 5.82% |
| 80 | 6.82% |
| 85 | 8.51% |
| 90 | 11.92% |
| 94 | 18.79% |
| 95+ | 20.00% |
Why convert before age 71
- Pension income amount: a converted RRIF (or LIF, annuity) qualifies for the federal pension income credit of $2,000, available at any age 65 or over. RRSP withdrawals do not qualify.
- Pension income splitting: a converted RRIF allows up to 50% of eligible pension income to be transferred to a lower-income spouse on each tax return after age 65.
- Bracket arbitrage: drawing from RRIF/RRSP at 65 to 70 lets you fill the 14% or 20.5% federal brackets before CPP and OAS bump you into the 26%+ range.
- OAS clawback control: smaller RRIF balance at age 71 means smaller mandatory withdrawals later, reducing the chance of pushing income above the OAS recovery threshold.
Worked example: $500,000 RRSP, age 65, planning to delay CPP to 70
A 65-year-old has $500,000 in RRSPs and CPP credits worth $1,300/month at 65. She plans to delay CPP to 70 (which gives $1,846/month) and start OAS at 65 ($743/month). Her bridge years are 65 to 70.
| Strategy | Result by age 71 | Tax effect |
|---|---|---|
| Convert RRSP to RRIF at 65, withdraw $32,000/yr | ~$365,000 RRIF balance; minimum at 71 = $19,272/yr | $32,000 + $743 OAS × 12 = $40,916; mostly in 14-20.5% brackets |
| Leave RRSP alone until 71, then convert | ~$670,000 RRIF balance; minimum at 71 = $35,376/yr | $1,846 CPP + $743 OAS + $35,376 RRIF + … = ~$67,000+; some in 26% bracket; OAS clawback risk if other income |
The converted-early strategy spreads the same dollars across more years at lower marginal rates and reduces clawback risk after 71.
Pension splitting once a RRIF is in place
Once a Canadian aged 65 or over starts receiving RRIF income, up to 50 percent of that income can be allocated to the spouse’s tax return using Form T1032 each year. The election can be revised year by year. RRSP withdrawals do not qualify for pension splitting; only RRIF, annuity, LIF, and registered pension plan income qualify (with age and residency conditions).
How to actually convert
Most issuers (Questrade, Wealthsimple, RBC Direct Investing, TD Direct Investing, BMO InvestorLine) allow online RRSP-to-RRIF conversion. The process:
- Open a RRIF account at the same institution.
- Submit a transfer instruction (in-kind or cash) from the RRSP to the new RRIF.
- Choose annual minimum and any additional withdrawal frequency (monthly, quarterly, annual).
- Designate beneficiaries (successor annuitant for a spouse, or beneficiaries).
- Schedule withdrawals; in-kind transfers from RRIF to a non-registered account or TFSA still count as withdrawals.
Common mistakes
- Forgetting that the conversion deadline is December 31 of the year you turn 71. Missing it means CRA may treat the RRSP balance as fully withdrawn on December 31, with all of it taxable.
- Not naming a successor annuitant or beneficiary on the new RRIF.
- Withdrawing only the minimum when bracket-filling withdrawals would have produced a better lifetime tax outcome.
- Forgetting that RRIF withholding tax does not apply to the minimum withdrawal but does apply to any amount above it.
Cross-references
- Should I Delay CPP If I Have an RRSP?
- CPP and OAS Together: When to Start Each Benefit
- OAS Clawback in Retirement: How to Avoid the 15% Recovery Tax
- Capital Gains Tax When Someone Dies in Canada
- CPP While Working
Frequently asked questions
- When must I convert my RRSP to a RRIF?
- By December 31 of the year you turn 71. Conversion can also be to an annuity or full withdrawal.
- What is the RRIF minimum withdrawal at age 71?
- 5.28 percent of the RRIF balance on January 1 of that year. The percentage rises with age.
- Should I convert RRSP to RRIF before age 71?
- Often yes, after age 65. A RRIF qualifies for the pension income amount, enables pension splitting with a spouse, and supports bracket-filling withdrawals before CPP and OAS start.
- Does an RRSP withdrawal qualify for pension income splitting?
- No. Only RRIF, LIF, annuity, and registered pension plan income qualify. Convert at least part of the RRSP to a RRIF to enable splitting.
- Is there withholding tax on the RRIF minimum?
- No withholding on the minimum withdrawal. Withdrawals above the minimum are subject to 10/20/30 percent withholding depending on amount.
- What happens if I miss the December 31 conversion deadline?
- CRA may treat the entire RRSP balance as withdrawn on December 31 of that year, fully taxable as ordinary income.
- Can I use my younger spouse's age for the RRIF minimum?
- Yes. You can elect at conversion to use your spouse's age, which lowers the minimum and stretches the RRIF further. The election is irrevocable.