Ensuring a Smooth Transition From Saver to Spender.
Registered Retirement Income Fund (RRIF)
A Registered Retirement Income Fund or RRIF is similar to an RRSP but the focus shifts from saving for retirement to providing you an income throughout your retirement. By law, you must convert your RRSP accounts into a RRIF by the end of the year in which you turn 71. Minimum withdrawals must be made from the RRIF the year after it is established. Investments held inside a RRIF grow in a tax-deferred manner just as with an RRSP. The two primary differences between an RRSP and an RRIF are:
- No further contributions can be made once conversion to a RRIF has occurred.
- The RRIF minimum withdrawal schedule must be adhered to. A minimum RRIF withdrawal is an annual obligatory amount which is cashed out of a RRIF and sent to the account-holder without withholding tax. The withdrawal remains taxable Canadian income, but is eligible for a tax credit.
The minimum RRIF withdrawal each year is determined by a percentage, depending on the holder's age, of the total value of the plan on January 1 each year. The holder of an RRIF may elect to withdraw an amount greater than the minimum RRIF amount for that year, though withholding tax will apply to this supplementary amount.
Consider:
Consider:
1) Learn how to turn your RRIF into a guaranteed lifetime income.
2) Find out how much income your RRIF will provide in retirement.
2) Find out how much income your RRIF will provide in retirement.
3) What is the most tax efficient way to get funds out of your RRIF account.
