Last updated : June 22, 2023 | Reviewed by Stuart Dollar
A registered retirement income fund (RRIF) is an investment account that pays you income during retirement. You can transfer tax-sheltered funds from registered Canadian accounts such as RRSPs, registered pension plans and other RRIFs into a RRIF.
You can open a RRIF at a financial institution, at any time. If you own RRSPs, you must convert your RRSPs to a RRIF or RRIFs before the end of the year you turn 71. When you do this, you’re directly transferring funds from your registered accounts to a RRIF. For example, you can transfer funds from these sources:
*If your RRSP is with Sun Life, we’ll notify you before the end of the year you turn age 71. At that point, we may offer you various retirement income options.
You can begin taking withdrawals from your RRIF in the year you open it, although there’s no obligation to do so. However, there’s a minimum amount you’ll need to withdraw starting the year after you open your RRIF, and continuing for every year after that. You’re free to withdraw more than the minimum amount from your RRIF. But you can’t apply the extra you take out this year towards next year’s minimum. If you take out more than the minimum in any year, you’ll still have to take out the minimum amount next year. You can own more than one RRIF, and these rules will apply to each of your RRIFs.
Open a RRIF
Ready to convert your savings into a RRIF? A Sun Life advisor can set you up. They can help you figure out which plans and products can benefit your unique situation.
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It depends on the situation. In many cases, a RRIF can roll over to the surviving spouse or common-law partner’s RRIF on a tax-deferred basis.1 Depending on their age, they may also roll over the RRIF to an RRSP. The surviving spouse or common-law partner won’t require additional RRSP contribution room when the rollover happens.
There are certain exceptions. For example, if you don’t have a spouse or common-law partner, or your beneficiary isn’t your spouse or common-law partner, the value of your RRIF is included as income in your final tax return. Learn more about RRIFs and tax rules upon death.
1 If the deceased had not withdrawn the full minimum amount from their RRIF before death, the difference between what they were required to withdraw and what they did withdraw would be included in their final tax return. This amount can go to the surviving spouse or common-law partner, but can’t be deposited to their RRSP or RRIF.
When a spousal RRSP is converted to a RRIF, it’s called a spousal RRIF. Only the spouse who is the annuitant (the owner) of the spousal RRIF can make withdrawals. If the contributing spouse has made a contribution to the spousal RRSP within the last three calendar years, the spousal RRIF income will be attributed to them to the extent the amount withdrawn exceeds the minimum amount. Learn more about how spousal RRSPs work.
The main difference is that you save for retirement with an RRSP and you take income for retirement from a RRIF. However, if you need money before retirement, you can also make withdrawals from your RRSP. But keep in mind that RRSP withdrawals will have taxes withheld at source, while RRIF minimum withdrawals will not face any withholding tax. Learn more about early RRSP withdrawals.