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Taking money out of an RRSP

Getting retirement income from your RRSP Add to ...

You must close your RRSP before the end of the year you turn age 71. You can take your savings in cash. Or you can convert your RRSP into a regular stream of retirement income.

2 income options

1. Convert your RRSP to a RRIF

Your investments will continue to be sheltered from tax in a RRIF. But you'll have to take out a minimum amount every year. Learn more about RRIFs.

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2. Buy an annuity with your RRSP funds

You can use your RRSP savings to buy an annuity. You can choose an annuity that provides you with a regular stream of income for life, or until age 90. Learn more about ​annuities.

Another option: Put money in both: Consider putting money in both a RRIF and an annuity. This can make sense if you want to keep some control over your investments and payment options, but also want the security of guaranteed income.

Taking your RRSP as cash

You can also choose to take some or all of your RRSP funds in cash. You may want to do this if you have little other income and you're in a low tax bracket. You'll pay a withholding tax of up to 30% on the money. And you'll have to declare it as income on your tax return that same year. If you use this money to buy investments in a non-registered account, you'll also pay tax on any earnings.

When it's time to convert your RRSP into retirement income, consider speaking with a financial adviser. Your RRSP funds are likely just one part of your overall retirement picture. Learn more about retirement planning.

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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