Registered Retirement Income Fund (RRIF)

A RRIF converts your RRSP savings into a steady retirement income stream. By December 31st of the year you turn 71, you must convert your RRSP to a RRIF, though you can choose to do so earlier for greater income flexibility. With a RRIF, you can invest in options like GICs, stocks, bonds, and mutual funds, allowing for potential growth and tax-deferred income generation.
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RRIF benefits and features

Investment flexibility

Your RRIF functions as an investment account, allowing you to choose from various options like GICs, stocks, bonds and mutual funds to potentially grow your remaining savings and generate income.

Tax-deferred growth

Similar to RRSPs, your RRIF investments benefit from tax-deferred growth until the time of withdrawal.

Scheduled withdrawals

The Canada Revenue Agency (CRA) mandates minimum annual withdrawals. However, you can withdraw more than the minimum, offering greater control over your retirement finances.

Taxable income

The income you receive from your RRIF withdrawals is considered taxable income.

No new contributions

Unlike RRSPs, RRIFs cannot receive new contributions. They only accept transfers from RRSPs.

Beneficiary designation

You can name beneficiaries for your RRIF. This ensures the remaining RRIF balance goes directly to your chosen recipients.

RRIF: FAQs

A Registered Retirement Income Fund (RRIF) is a tax-deferred investment account that allows you to convert your RRSP savings into a stream of income during retirement.

You must convert your RRSP to a RRIF by December 31st of the year you turn 71. However, you can choose to transfer your RRSP to an RRIF earlier if you need to access your retirement income sooner.

Income from a RRIF is treated as taxable income in the year it is withdrawn. You must report withdrawals as income on your tax returns.

The minimum amount you can withdraw from your RRIF each year is based on a formula that considers two factors: your account value at the beginning of the year and your age. The Canada Revenue Agency (CRA) sets the minimum withdrawal rates, which increase as you get older. You can find more information about these rates on the CRA website.

You can select from various investment options such as GICs, stocks, bonds and mutual funds. This allows you to create a personalized investment portfolio that aligns with your risk tolerance and retirement goals.

You can designate beneficiaries for your RRIF. These beneficiaries will receive the remaining balance in your RRIF upon your death. Be sure to consider any potential tax implications for the beneficiaries you select.

RRIFs do not accept new contributions. They are funded through transfers from RRSPs or other eligible retirement accounts.

If you have named beneficiaries, they will receive the remaining balance in your RRIF upon your passing. If no beneficiaries are named, the RRIF assets will be paid in a lump sum to your estate. The estate is responsible for any tax owing.

Yes, withdrawals from your RRIF are considered taxable income. You must report withdrawals as income on your tax returns.

You cannot contribute new funds to an RRIF. However, any investment growth within your RRIF remains tax-deferred until you withdraw the money.

  • Provides income during retirement through mandatory withdrawals
  • Offers tax-deferred growth on remaining funds within the RRIF
  • Provides investment flexibility to personalize your portfolio
  • Allows you to designate beneficiaries for the remaining balance

For a personalized approach to your RRIF and retirement planning, consult a qualified financial advisor. They can clarify your options, develop a suitable withdrawal strategy and craft a retirement plan tailored to your unique financial goals. Contact our UCU Wealth Strategies Group today – one of our advisors is ready to assist you.

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