How to Withdraw From Your RRIF When Retired


A Registered Retirement Income Fund is a Canadian fund that holds cash previously stored in a Registered Retirement Savings Plan. Canadians save for retirement through regular contributions to their RRSP. If you're a Canadian with an RRSP who's ready to retire and start drawing from your savings pool, you need to convert your RRSP first, by liquidating your investments using your money to purchase an annuity, or transferring your RRSP to a RRIF. Money stored in a RRIF can continue to build through investments, but you need to withdraw a minimum amount every year, based on age.

Register your RRIF under the younger spouse if you're married. The older you are, the higher the minimum amount you have to withdraw from your RRIF each year. Registering your RRIF to the younger spouse makes it possible to leave more of your money invested, if you choose.

Verify how much you have to withdraw from your RRIF for the year. Your financial institution can calculate this for you, but figure it out yourself for your own peace of mind. If you're younger than 71, use the following formula to calculate what percentage of your RRIF you must withdraw within the next year: 1/(90 - X), where "X" is your age at the beginning of the year. For ages 71 and older, percentage tables are available at financial institution websites.

Set up an appointment with your financial advisor to discuss the best way to receive your income. Some people receive monthly deposits from their RRIFs into their checking accounts, while others elect to receive semi-annual or even annual payments. What you choose depends on your spending habits. For example, if you travel to Florida in the winter, you might want to receive semi-annual payments so you have money for your trip and you receive funds to top up your account when you return in the spring.

Report your RRIF income when filing taxes. Your bank should send you a statement reminding you how much you withdrew from your RRIF for the tax year, usually sometime in February.

Tips & Warnings

  • There are additional tax reporting rules if you received income from a spouse's RRIF following death. If you received funds in cash and were over 65, the amount should go on line 115 of your tax return. If you were younger than 65, report the amount on line 130. If you contributed the funds to your RRSP, enter the amount on line 208. If you transferred the money to your own RRIF or another type of annuity, report it on line 232. Ask your financial planner about how you can keep track of your RRIF investments' performance. Depending on your financial institution and your preferences, you may receive regular statements, meet with a bank representative or check the status of your RRIF online.

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