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Registered Retirement Income Funds (RRIFs)

Making withdrawals from your RRIF Add to ...

​​Two key decisions you have to make with a RRIF are how much money to take out and when. While there is a minimum amount you have to take out each year, there is no maximum amount. All withdrawals are fully taxable.

Withdrawing the minimum amount

You have to start withdrawing money from your RRIF in the year after you open it. The federal government sets the minimum amount you must take out of your RRIF every year. It's based on a percentage of the value of your RRIF.

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Here's how it works:

  • The minimum amount increases as you get older.

  • If your spouse is younger than you, you can use their age to calculate your minimum amount. The lower the age, the lower the minimum amount and the less income tax you'll pay on the withdrawals.

  • You can choose to make regular monthly, quarterly, semi-annual or annual withdrawals.

  • All withdrawals are fully taxable.

Using your spouse's age for the minimum amount: If your spouse is younger than you, you can use their age to calculate your minimum amount. This is a good strategy if you have other sources of income and want to leave your money in your RRIF for as long as possible. You don't have to have a spousal RRIF or name your spouse as the RRIF beneficiary to use their age for your minimum amount. But you must tell your financial institution that you're doing so before you make your first RRIF withdrawal. And you can't change your mind later.

How the minimum amount is calculated

Age on 
January 1
​Minimum 
amount
Age on 
January 1
​Minimum 
amount
​65​4.00%​80​8.75%
66​​4.17%​81​8.99%
67​​4.35%​82​9.27%
68​​4.55%​83​9.58%
69​​4.76%​84​9.93%
70​​5.00%​85​10.33%
71​​7.38%​86​10.79%
72​​7.48%​87​11.33%
73​​7.59%​88​11.96%
74​​7.71%​89​12.71%
75​​7.85%​90​13.62%
76​​7.99%​91​14.73%
77​​8.15%​92​16.12%
78​​8.33%​93​17.92%
79​​8.53%​94+​20.00%

 

When you reach age 94, the minimum amount stays at 20% until your RRIF is used up.

If you take out more than the minimum amount

You can take out as much as you need every year from your RRIF, but there are tax considerations.

Here's how it works:

  • There is no maximum withdrawal limit.
  • All withdrawals are fully taxable.
  • If you take out more than the minimum amount, you'll also pay withholding tax on the excess amount. Your financial institution will hold back an amount, based on the withholding tax rates, and pay it directly to the government on your behalf.

Withholding tax rates

​Amount in excess of the minimum amountWithholding tax rate (except in Quebec)
​Up to $5,000​10%
​Between $5,000 and $15,000​20%
​More than $15,000​30%

 

Withholding tax rates are different for taxpayers in Quebec. Learn more about withholding rates in Quebec.

Even though withholding tax is deducted from withdrawals that exceed the minimum amount, you may still owe more tax later when you file your tax return. It depends on your total income and tax situation.

Taking your withdrawals "in kind"

If you don't need the income from your RRIF right away, you don't have to take your minimum amount in cash. Instead, you may be able to transfer the investments directly to a non-registered account or TFSA (if you have contribution room). This is known as an "in kind" withdrawal. It usually works best with mutual fundsstocks and bonds. A GIC can be transferred in kind only if it is "transferable and assignable”.

Example – Let’s say your minimum amount is $4,000. If your RRIF has $4,000 worth of mutual fund units, you could transfer those units to a non-registered mutual fund account.

Here's how it works:

  • You avoid any redemption fees because you're not selling the units. But you may have to pay a transfer fee.

  • You don't have to pay withholding tax because you're only withdrawing the minimum amount from your RRIF.

  • Like any RRIF withdrawal, you'll have to include the $4,000 withdrawal in your income when you file your tax return.

Content in this section is provided in partnership with Investor Education Fund, a non-profit organization founded and supported by the Ontario Securities Commission that provides unbiased and independent financial tools to help Canadians make better money decisions. To find out more, go to: GetSmarterAboutMoney.ca

 

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