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Retirement savings

January 22, 2016

Turning retirement savings into retirement income

What happens when you’re ready to start spending your retirement savings? Here’s an overview of your income options.

After years of saving for your retirement, you've reached your goal – now it's time to start spending what you've saved. The following chart gives you an overview of your options for converting retirement savings into income.

  Retirement savings Retirement income

Registered but not locked-in plans

You must convert your registered savings plans by the end of the year you turn 71. Your options:

Registered, locked-in plans

  • Defined contribution (DC) pension plan
  • Locked-in RRSP
  • Locked-in retirement account (LIRA)

You must convert your locked-in savings plans to locked-in income plans. Your options:

  • Life income fund (LIF)*
  • Locked-in retirement income fund (LRIF)*
  • Life annuity

* Not available in all provinces

Traditional company pension plans

  • Defined benefit (DB) pension plan

The plan pays you a pension.

  • Contact your plan administrator to begin receiving benefits

Non-registered investments

  • Tax-free savings account (TFSA)
  • Savings and chequing accounts
  • Non-registered investments, such as mutual funds, segregated funds, GICs, exchange-traded funds, stocks, bonds, Canada Savings Bonds, home/business/investment properties

You can continue to use the same accounts as you did before retiring.

  • Withdraw, transfer or contribute money at any time.

Government pensions

  • Canada Pension Plan (CPP)
  • Quebec Pension Plan (QPP)
  • Old Age Security (OAS)

You must apply to begin receiving retirement benefits.

Just as it's important to plan your retirement savings, it's also essential to plan your spending. A financial advisor can help you to determine the right timing, rate of withdrawal and other critical considerations for your particular situation.

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