Registered Retirement Income Fund (RRIF)
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.
There is a service fee of $150.00 for the transfer of property from a RRIF to a company that is not a subsidiary of Royal Bank of Canada. This fee is subject to change. In the event this fee changes or new fees are introduced, RBC will notify clients by mail or electronically at least 30 days before the effective date of the change.
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 You can also transfer any funds withdrawn from your RRIF that exceeds the minimum payment back to an RRSP to continue tax sheltering if you’re not in your 71st year.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.
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.
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.
The government requires you to take minimum withdrawals each year from your Registered Retirement Income Funds (RRIFs) and Life Income Funds (LIFs). Due to the current COVID-19 crisis, the government has reduced the required minimum withdrawals by up to 25% for 2020, in an effort to allow investment accounts some time to recover from the current market conditions.
This change will allow seniors to prolong their retirement savings by not redeeming more than they require. This also means they can defer paying tax on funds should they decide to take advantage of the change. For more information, visit the CRA site.
No, you are not obligated to reduce your payments. This is optional for those making withdrawals from their RRIFs/LIFs and is a temporary measure for the 2020 tax year only. Whether you should reduce your minimum RRIF withdrawals depends on your own unique situation. For example, whether you need the extra income for short term expenses.
If you have previously instructed RBC to withdraw the minimum amount on your RRIF payment instruction form, we will not automatically convert this amount to the adjusted minimum amount for 2020.
Other Notable Disclosures:
- Interest in a GIC will be calculated counting the first but not the last day of the term.
- There is no fee charged for a purchase of GIC. If you transfer your GIC out to another financial institution, there will be a transfer out fee of $150 charged (applies to both registered or non-registered GICs – transfer out fee for non-registered GICs came into effect August 1, 2022)
- You may provide us with instructions as to what to do with your GIC proceeds upon maturity. If your GIC is automatically renewed, you may cancel it upon renewal within 10 business days from the issuance (renewal) date, and if you do, your principal will be returned, but no interest will apply from the issuance to the cancellation date.
- The GIC Client Agreement can be found at https://www.rbcroyalbank.com/dms/investments/clientacknowledgementforms.html. This GIC Client Agreement may be changed at any time, on notice to GIC holders.
- For more information and disclosures regarding RBC Equity Linked GICs, see: RBC Equity-Linked GICs page.
Mutual Funds are sold by Royal Mutual Funds Inc. (RMFI). There may be commissions, trailing commissions, management fees and expenses associated with mutual fund investments. Please read the Fund Facts/prospectus before investing. Mutual fund securities are not insured by the Canada Deposit Insurance Corporation. For funds other than money market funds, unit values change frequently. For money market funds, there can be no assurances that a fund will be able to maintain its net asset value per security at a constant amount or that the full amount of your investment in a fund will be returned to you. Past performance may not be repeated. RMFI is licensed as a financial services firm in the province of Quebec.
Financial planning services and investment advice are provided by Royal Mutual Funds Inc. (RMFI). RMFI, RBC Global Asset Management Inc., Royal Bank of Canada, Royal Trust Corporation of Canada and The Royal Trust Company are separate corporate entities which are affiliated. RMFI is licensed as a financial services firm in the province of Quebec.
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