Registered Retirement Income Fund (RRIF)

General

A Registered Retirement Income Fund (RRIF) is an extension of your Registered Retirement Savings Plan (RRSP). Your RRSP is used to save for your retirement while a RRIF is used to withdraw income during your retirement. Each allows for tax-deferred growth, offers several investment options and is government regulated. With a RRIF, however, contributions are not allowed and you must make minimum mandatory withdrawals each year.

No, you cannot transfer money from a regular savings account into your RRIF.

The funds in your RRIF become taxable income on the date of your death unless you have a spouse or children/grandchildren under age 18 who were financially dependent on you at the time of your death who are entitled to your RRIF after your death. In those cases, the funds in your RRIF may be transferred to their RRSP or RRIF. Different rules apply for different beneficiaries so you should speak to an RBC advisor.

Opening an Account

In the year you turn 71, you must convert your RRSP to an income option such as a RRIF or an annuity. You can also cash out your RRSP; however, this is not typically recommended as the entire amount will be considered taxable income in the year you withdraw it and these funds will no longer benefit from tax-sheltered investment growth.

Yes, you can convert your RRSP to a RRIF before age 71 if you need to start drawing a regular income from it. You can also transfer any funds withdrawn from your RRIF that exceeds the minimum payment back to an RRSP to continue tax sheltering if you’re not in your 71st year. An RBC advisor can help you determine the right time to convert your RRSP.

Converting all your RRSPs into one RRIF will make it easier to manage and keep track of your minimum annual withdrawals; however, you can choose to hold separate RRIFs.

There are special options available for converting pension funds in a LIRA or locked-in RRSP. An RBC advisor can explore your retirement income options, which may include transferring the funds to a Life Income Fund (LIF) or Prescribed Retirement Income Fund (PRIF).

Yes, you can have both as long as you are under age 71.

Investment Options

The investments held in your RRSP can be transferred directly to your RRIF. This way, RRSP investments are not required to mature or be liquidated before being transferred. Once your RRIF is opened, you can change your investments—for example, if you want to switch to more secure investments.

An RBC RRIF can hold a variety of investments, including Guaranteed Investment Certificates (GICs), mutual funds, portfolio solutions and savings deposits. You can also hold stocks and bonds through RBC Direct Investing™ and RBC Dominion Securities. An RBC advisor can help you determine which investments will best serve your needs.

No, you may hold any amount of qualified foreign investments in your RRIF.

Withdrawals

Yes, you can base your minimum withdrawals on your younger spouse’s age. This lets you take a lower minimum withdrawal, which may be ideal if you don’t need a higher income amount right away. Just keep in mind that this option can’t be changed later and you must let your financial institution know before making your first withdrawal.

Your earnings have no impact on your RRIF. You will not be able to contribute additional money to your RRIF but you may be able to reduce your taxes by making contributions to an RRSP as long as you are under age 71 and have unused RRSP contribution room available.

In the first year that your RRIF is opened, you are not required to make a mandatory withdrawal. However, you must make your minimum withdrawal in the following year.

You can select to receive your RRIF payments on a schedule that works for you. Choose from monthly, quarterly, semi-annual or annual RRIF withdrawals.

They can, yes. It’s important to hold a variety of investments in your RRIF. For example, you can use mutual funds for long-term growth while using GICs or a savings deposit as a way to withdraw funds in the short-term or as you need the income.

Even though you may not need the funds, government regulations state that minimum withdrawals are required. However, you can contribute the RRIF withdrawals you don't need to a Tax-Free Savings Account (TFSA) as long as you have contribution room available in your TFSA. An RBC advisor can help you decide what’s right for you.