How to use a RRIF

What is a Registered Retirement Income Fund or RRIF?

A Registered Retirement Income Fund (RRIF) is part of Canada’s collection of savings instruments for retirees looking to manage their accrued RRSP contribution when they (the retiree) pass the age of 71 years old. It exists as an extension of the government’s RRSP plan in that an RRIF allows the funds accrued in an individual’s RRSP to continue to be held in a tax-deferred account after the RRSP plan holder’s age has turned 71 years old.

Use RRIFs to defer taxation.

When establishing an RRIF, you may deposit the wealth from your RRSP on or before the year of your 71st birthday; however, you may not establish an RRIF past that point. Once you reach the age of 71, you have two options for the wealth you’ve accrued in your RRSP. You can either:

If you choose the second option, you’ll be able to shield the majority of your funds from taxation, except for your annual minimum RRIF withdrawal. For retirees interested in prolonging their federal tax sheltering, this is a wonderful account worth taking advantage of.

How Registered Retirement Income Funds work

Once you transfer your funds from your RRSP to a new RRIF, there are two major differences you will soon become aware of. In particular,

The former point is particularly relevant to individuals who decide to move their funds over before the age of 71, and the latter is applicable to any individual who chooses to establish an RRIF at all. The silver lining to this mandatory withdrawal of retirement income is Canada’s federal and provincial governments both offer tax credits for the first portion of annual income that is withdrawn.

Furthermore, this withdrawal is not subject to withholding tax. For the first $2,000 withdrawn in the fiscal year, an individual will receive a 15% federal income tax credit, while provincial income tax varies throughout the country.

A RIFF is useful but can be complex

The constantly shifting landscape of Canada’s tax system is often frustrating and laborious to navigate alone. For a dedicated individual, this may take an inordinate amount of time every year to stay up-to-date on the latest provisions and restrictions that RRIFs and other registered tax-deferred savings accounts face.

Depending on your current financial situation, other retirement preparation tools may be expedient to meet your retirement goals. Whether you decide to invest your retirement wealth or save it for disbursal through your estate, the wealth you’ve accumulated requires finesse and refined strategy in order to maximize its effective lifespan. No matter your financial goals, we’re here to help you through every step.

By consulting an MLD Wealth Management tax specialist, you’ll be able to save yourself the hassle of managing your retirement accounts on your own. We’re dedicated to providing innovative solutions to each of our high net worth clients’ unique needs. With our help, your Registered Retirement Income Fund will receive all the growth potential it’s capable of while minimizing the risk of undue fees and penalties.

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When you entrust your wealth with the professionals of MLD Wealth Management, we guarantee that your experience will be an unforgettable one full of actionable financial advice and measurable results. We promise to both deliver and improve upon your bespoke wealth management plan, meeting every expectation and requirement your unique situation mandates.


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The information on this web site is intended for use by persons resident in Canada. Independent Wealth Management advisors are registered with IIROC through Canaccord Genuity Corp. and operate as agents of Canaccord Genuity Corp. Canaccord Genuity Wealth Management is a division of Canaccord Genuity Corp., Member - Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada.