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Published on: July 11, 2024

Converting your RRSP to a RRIF

Converting your Registered Retirement Savings Plan (RRSP) to a Registered Retirement Income Fund (RRIF) is a common step many Canadians take as they transition into retirement. It involves transferring funds from an RRSP to a RRIF, where you can withdraw the money as income.

RRSP vs RRIF: What’s the difference? 

The main difference is that you save for retirement with an RRSP, and you take income for retirement from a RRIF. However, you can make early withdrawals from an RRSP if you need money before retirement. Keep in mind that both RRSP and RRIF withdrawals are taxable and subject to withholding tax.

Learn more about how withdrawals work: 

When can you convert an RRSP to a RRIF?

You can convert your RRSP to a RRIF at any time. But most people do so when they retire or reach age 71.

When do you have to convert an RRSP to a RRIF?

No one can own an RRSP after December 31 of the year they turn age 71. With RRSPs, you must choose one of 3 options by the end of the year you turn 71: transfer your RRSP to a RRIF, purchase an annuity or withdraw the funds from your account and pay tax on it. 

By directly transferring your RRSP to a RRIF, you’ll start taking at least the minimum withdrawals in the following year and defer taxes on the balance of your RRIF.

Can you convert your RRSP to a RRIF early?

You don’t have to wait until you’re 71 to convert your RRSP to a RRIF. You can do it at any age if it makes sense with your situation.

What are the benefits of converting an RRSP to a RRIF early?

You’re free to withdraw from your RRSP or convert to a RRIF at any time for income needs. However, it may be beneficial to convert your RRSP to a RRIF early if you’re 65 or older and want to take advantage of the pension income credit and pension income splitting.

How do I convert my RRSP to a RRIF?

You can convert your RRSP to a RRIF through an advisor. They’ll help you complete an application, come up with a RRIF withdrawal schedule, and figure out a plan that works best for your specific needs and goals. You’ll also have to complete a form where you select either a successor annuitant or a beneficiary to ensure that someone – your spouse, common-law partner, child, etc. – receives your RRIF or the funds within your RRIF after you die. Connect with an advisor for more information.

Can you transfer RRIF funds back to an RRSP?

Yes, you can convert your RRIF back to an RRSP before December 31 of the year you turn 71. But you’ll still have to withdraw the minimum amount in the year you convert your RRIF back to an RRSP. Also, note that once you withdraw cash from your RRSP or RRIF, you’ll have to pay tax on it.

How much do I have to withdraw from my RRIF each year?

There’s a minimum amount you must withdraw from your RRIF every year. The withdrawals must start in the year after you open your account. Your minimum withdrawal amount is set by the federal government. It’s based on your RRIF's market value as of Jan. 1 of the calendar year. You would multiply that market value by the annual minimum withdrawal percentage, which is based on your age or your spouse's age (if your spouse is younger than you). Keep in mind, you’ll have to pay tax whenever you take withdrawals from your RRIF. Find your RRIF minimum withdrawal rate.

Find an advisor

Talk to a Sun Life advisor to find out how a RRIF can benefit you.

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More about RRIFs

Find out how a RRIF works and get more answers to frequently asked questions.

Learn more about setting up a RRIF

This information is meant for educational and illustrative purposes only. Some conditions, exclusions and restrictions may apply.