RRIF – Registered Retirement Income Fund
A RRIF is a registered plan that provides you with retirement income from the funds you saved over the years in your Registered Retirement Savings Plan (RRSP).
Opening an RRIF
- A RRIF is a registered account opened to transfer funds from your RRSP account.
- There is no minimum age restriction.
- Since RRSP accounts must be closed by the end of the year the annuitant/plan holder turns age 71, a RRIF account is opened to transfer funds from your RRSP account.
- Investments transferred from your RRSP account to your RRIF account will be invested at the same interest rate for the remaining time to maturity.
- An individual RRIF is registered in your name only, and all funds in this account belong to you.
- A spousal RRIF is registered to your spouse or common-law partner and the funds in this account belongs to them.
- You can have more than one RRIF plan at any given time.
- Funds can be invested in term deposits (index-linked, non-redeemable, or cashable), savings account, or mutual funds.
- Income earned in a RRIF account is usually tax exempt until withdrawn from the plan.
- All insurable deposits in an RRIF registered account have unlimited deposit insurance coverage provided by Financial Services Regulatory Authority of Ontario.
- No new contributions are permitted to a RRIF account.
- No transfer of your retiring allowance is permitted to a RRIF account.
- In the year you convert the funds in your RRSP account to a RRIF account, withdrawals are not required but you are able to withdraw any amount you choose. In the calendar year after you convert your RRSP account to a RRIF account, you are required to withdraw the annual minimum payment, but can withdraw more.
- You can opt to receive your payments annually, semi-annually, quarterly, monthly, etc.
- Your minimum amount is set by the federal government and is based on the value of your RRIF account on December 31 of the previous year, and your age at the beginning of the calendar year unless you elect to have the payment based on the age of your spouse or common-law partner.
- Once you choose the age to base payments, this option cannot be changed. Withdrawals based on the younger person’s age results in a lower annual payment.
- Tax will be withheld from all RRIF withdrawals exceeding your annual minimum payment. You will receive a T4RIF form that will include the total amount withdrawn from the RRIF account, and the amount of tax withheld. This form should be included with your income tax return.
- Withdrawals from a RRIF are generally taxable for income tax purposes.
- No tax is withheld from funds transferred directly from an RRSP to a RRIF.
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