An RRSP must be collapsed by December 31 of the year the holder turns 71. The most common path is converting to a Registered Retirement Income Fund (RRIF), which preserves tax-deferred growth and pays a minimum amount each year starting the year after conversion. Withdrawals from a RRIF are taxable as income in the year received. Conversion can happen earlier than age 71 if income is needed.
The 71-year deadline
By December 31 of the year a Canadian turns 71, all RRSPs must be: converted to a RRIF, used to purchase a registered annuity, or fully withdrawn (rare and usually disastrous because the entire balance is taxable in one year). Most Canadians convert to a RRIF because it preserves tax deferral and gives the most flexibility.
RRIF minimum withdrawal formula
Each year, a RRIF holder must withdraw at least the prescribed minimum. The minimum is calculated as: (RRIF balance at January 1) divided by (90 minus age at start of year), for ages up to 71. Starting at age 72, the minimum percentage is set by a fixed schedule in the Income Tax Regulations.
| Age at start of year | Minimum withdrawal percentage |
|---|---|
| 65 | 4.00% (1 / (90-65)) |
| 71 | 5.28% (1 / (90-71)) |
| 72 | 5.40% (regulation) |
| 75 | 5.82% |
| 80 | 6.82% |
| 85 | 8.51% |
| 90 | 11.92% |
| 95+ | 20.00% |
The full minimum withdrawal table appears in the Income Tax Regulations Schedule. The first minimum withdrawal is required in the calendar year AFTER conversion, not the conversion year itself.
Worked example
A Canadian converts a $400,000 RRSP to a RRIF at age 71 in December 2026. The first minimum withdrawal is required in 2027. RRIF balance January 1, 2027 is $400,000. Age at start of 2027 is 72. Minimum is 5.40% of $400,000 = $21,600. The RRIF holder must withdraw at least $21,600 in 2027.
The minimum is recalculated each January 1 using the new balance and the new age. A RRIF balance that grows due to investment returns also produces growing minimum withdrawals.
Withholding tax on RRIF withdrawals
The minimum required withdrawal is exempt from withholding tax (the institution does not withhold). Any amount above the minimum is subject to the standard RRSP withholding rates: 10% for amounts up to $5,000 (5% in Quebec), 20% for $5,001 to $15,000 (10% in Quebec), and 30% for amounts over $15,000 (15% in Quebec). Withholding is a prepayment, not a final tax — actual tax owing is settled on the T1 return.
Spousal age election
A RRIF holder can elect to use the younger spouse’s age to calculate minimum withdrawals (made on the conversion application or by separate election). This produces lower minimum withdrawals each year, preserving more capital and reducing taxable income. The election must be made at the time the RRIF is established and cannot be revoked.
Example: A 71-year-old with a 67-year-old spouse can elect spousal age. The minimum at age 67 is 1 / (90-67) = 4.35% versus 5.40% at age 72. On a $400,000 RRIF, that’s $17,400 instead of $21,600 — about $4,200 less taxable income each year.
Multiple RRIFs
A taxpayer can have multiple RRIFs at different institutions. Each RRIF has its own minimum withdrawal calculation. Combining RRIFs through direct transfer simplifies management and can reduce account fees. Direct transfers between RRIFs do not count as withdrawals or contributions.
Investment options inside a RRIF
RRIFs hold the same eligible investments as RRSPs: stocks, ETFs, mutual funds, GICs, bonds, and cash. Investment income inside a RRIF continues to grow tax-deferred. Capital gains inside a RRIF are not separately taxed; only withdrawals from the RRIF are taxable. This means a RRIF holder can hold growth-oriented investments without triggering capital gains tax until the funds are withdrawn.
Death and the surviving spouse
A RRIF can be transferred to a surviving spouse tax-free if the spouse is named as successor annuitant or if the estate transfers the RRIF to the spouse’s RRIF before December 31 of the year following death. The spouse continues making minimum withdrawals from the combined balance. If a non-spouse beneficiary is named, the RRIF balance is taxable on the deceased’s final tax return — usually a major tax bill.
Conversion before age 71
RRSPs can be converted to RRIFs at any age, not just 71. Early conversion is useful when the holder wants regular RRIF income before 71 (perhaps to fund early retirement or to start income-splitting at age 65 via pension splitting). Converting earlier locks in the minimum withdrawal requirement starting the next year, so the holder must want the income or be prepared to reinvest the after-tax minimum withdrawal.
Frequently asked questions
- When must I convert my RRSP to a RRIF?
- By December 31 of the year you turn 71. Options are RRIF, annuity, or full withdrawal (almost always a bad choice tax-wise).
- What is the RRIF minimum withdrawal at age 72?
- 5.40% of the January 1 RRIF balance, set by the Income Tax Regulations. The percentage rises each year, reaching 20% at age 95+.
- Is RRIF minimum withdrawal subject to withholding tax?
- No. The minimum is exempt from withholding. Withdrawals above the minimum are withheld at 10%, 20%, or 30% depending on the excess amount.
- Can I use my younger spouse's age for RRIF minimum?
- Yes. The spousal age election produces lower minimum withdrawals. It must be made when the RRIF is established and cannot be revoked.
- What happens to my RRIF when I die?
- Tax-free transfer to a surviving spouse named as successor annuitant. Otherwise, the RRIF balance is taxable on the deceased's final return.
- Can I convert my RRSP to a RRIF before 71?
- Yes. Conversion can happen at any age. Converting early locks in minimum withdrawals starting the following year.
- Are RRIF withdrawals eligible for pension income splitting?
- Yes, after age 65. Up to 50% of RRIF income can be split with a spouse on the T1 return.