RRSP at 71: RRIF, annuity or cash, and RRIF minimum withdrawals
Your RRSP must be wound up by December 31 of the year you turn 71. Most people convert it to a Registered Retirement Income Fund (RRIF), which keeps the money tax-sheltered but requires you to withdraw a minimum amount every year, starting the year after you open it.
Three options at 71
| Option | How it works | Tax |
|---|---|---|
| Take cash | Withdraw everything | The whole amount is added to that year's income; tax is withheld at source. Usually the most expensive choice for a large RRSP. |
| Transfer to a RRIF | The investments move to a RRIF and stay invested | No tax on the transfer. Each payment is taxed as income when you receive it. |
| Buy an annuity | An insurer pays you a fixed income, for life or a set period | No tax on the purchase. Annuity payments are taxed as income. |
You can combine these, for example converting most of the RRSP to a RRIF and using part of it for an annuity. Make your choice well before December 31 of the year you turn 71. You don't have to wait until 71; a RRIF can be opened earlier if you need income.
How a RRIF pays you
Starting in the year after the year you set up the RRIF, you must take at least a yearly minimum. You can take more at any time, but never less. The minimum is a percentage of the RRIF's value on January 1, based on your age on that date.
- No minimum in the first year. If you open the RRIF in 2026, your first required minimum is in 2027.
- Younger spouse's age. You can choose to base the minimum on your spouse's or common-law partner's age. If your partner is younger, the percentage is lower, so more stays sheltered for longer. Ask your RRIF carrier about this when you set it up.
- Up to age 70 the minimum is 1 ÷ (90 − age). At 65 that is 1 ÷ 25 = 4.00%; at 70 it is 1 ÷ 20 = 5.00%.
RRIF minimum withdrawal table
| Age on January 1 | Minimum | Age on January 1 | Minimum |
|---|---|---|---|
| 60 | 3.33% | 78 | 6.36% |
| 61 | 3.45% | 79 | 6.58% |
| 62 | 3.57% | 80 | 6.82% |
| 63 | 3.70% | 81 | 7.08% |
| 64 | 3.85% | 82 | 7.38% |
| 65 | 4.00% | 83 | 7.71% |
| 66 | 4.17% | 84 | 8.08% |
| 67 | 4.35% | 85 | 8.51% |
| 68 | 4.55% | 86 | 8.99% |
| 69 | 4.76% | 87 | 9.55% |
| 70 | 5.00% | 88 | 10.21% |
| 71 | 5.28% | 89 | 10.99% |
| 72 | 5.40% | 90 | 11.92% |
| 73 | 5.53% | 91 | 13.06% |
| 74 | 5.67% | 92 | 14.49% |
| 75 | 5.82% | 93 | 16.34% |
| 76 | 5.98% | 94 | 18.79% |
| 77 | 6.17% | 95 and older | 20.00% |
Ages 60 to 70 use the formula 1 ÷ (90 − age), rounded. For ages under 60, use the same formula: at 55, 1 ÷ 35 = 2.86%.
Example: Helen is 72 on January 1, 2027 and her RRIF is worth $200,000 that day. Her minimum for 2027 is $200,000 × 5.40% = $10,800, or $900 a month. If her husband is 66 and she chose to use his age when she set up the RRIF, the minimum is $200,000 × 4.17% = $8,340. Try your own numbers with the RRIF calculator.
Withholding tax
Your RRIF carrier does not withhold tax on the minimum amount. Tax is withheld only on the part you take above the minimum. That does not mean the minimum is tax-free: all RRIF income is taxable, and you settle up when you file your return. You can ask your carrier to withhold extra tax so you don't face a large bill when you file.
Pension credit and pension splitting
From age 65, RRIF income gets two tax advantages it doesn't get earlier:
- Pension income amount. RRIF payments and annuity payments qualify for the federal pension income amount of up to $2,000 if you are 65 or older on December 31 (or at any age if you receive them because your spouse or common-law partner died). At the 14% lowest federal rate for 2026, that is a federal tax saving of up to $280 a year, plus a provincial credit. Someone with no pension who is 65 to 71 can open a small RRIF and take $2,000 a year to use this credit.
- Pension income splitting. You can allocate up to 50% of your eligible pension income to your spouse or common-law partner on your tax returns. RRIF payments qualify if you are 65 or older at the end of the year. Both of you must sign Form T1032 and file it with your returns. Splitting can lower the couple's total tax and may help keep the higher earner under the OAS recovery threshold.
For broader strategies, see tax planning.
Locked-in money: LIRAs and LIFs
Money transferred out of a registered pension plan when you leave an employer usually goes into a locked-in account, often called a locked-in retirement account (LIRA). It cannot be withdrawn as cash in the normal way. To draw income, a LIRA is usually converted to a life income fund (LIF) or used to buy a life annuity. A LIF works like a RRIF, with the same yearly minimum, but usually also has a maximum yearly withdrawal.
The rules for locked-in plans depend on which pension law applies to the original plan: the province where you worked, or federal law for federally regulated employers. Provinces differ on the names of the accounts, the maximums, and when you can unlock part of the money (for example, small balances or financial hardship). Check with your plan administrator or your provincial pension regulator.
At death
What happens to a RRIF when you die depends on whom you name and on the rules for registered plans at death. Name a beneficiary (or, where allowed, a successor annuitant) and keep it up to date. See estate planning.