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Making withdrawals from your RRIF

​​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.

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


The 2015 federal budget included new minimum RRIF withdrawals. These changes allow seniors to keep more of their savings to grow in their RRIF accounts tax-deferred, and the new minimums also reflect Canadians' increasing life spans. 
Age on January 1 Minimum amount (up to December 31, 2014)* Minimum amount (as of January 1, 2015)*
​70 and under ​Calculated as 1/(90 – age)

F
or example, at age 65:
1/(90 – 65) = 4.00%
Calculated as 1/(90 – age)

For example, at age 65:
1/(90 – 65) = 4.00%
​71 ​7.38% 5.28%​
​72 ​7.48% 5.40%​
​73 ​7.59% 5.53%​
​74 ​7.71% 5.67%​
​75 ​7.85% 5.82%​
​76 ​7.99% 5.98%​
​77 ​8.15% 6.17%​
​78 ​8.33% 6.36%​
​79 ​8.53% 6.58%​
​80 ​8.75% 6.82%​
​81 ​8.99% 7.08%​
​82 ​9.27% 7.38%​
​83 ​9.58% 7.71%​
​84 ​9.93% 8.08%​
​85 ​10.33% 8.51%​
​86 ​10.79% 8.99%​
​87 ​11.33% 9.55%​
​88 ​11.96% 10.21%​
​89 ​12.71% 10.99%​
​90 ​13.62% 11.92%​
​91 14.73%​ 13.06%​
​92 ​16.12% 14.49%​
​93 ​17.92% 16.34%​
​94 20.00%​ 18.79%​
​95+ ​20.00% 20.00%​
 
*The minimum withdrawal amount is based on the value of your RRIF on December 31 of the previous year.

Example – On January 1, 2015 you were 82. The value of your RRIF on December 31, 2014 was $200,000. Based on the previous 9.27% minimum withdrawal amount, you would have had to withdraw at least $18,540. Based on the new minimum withdrawal amount of 7.38%, you must withdraw at least $14,760 in 2015. This means you can leave an additional $3,780 in your RRIF to continue to grow tax-deferred.

Under the new rules for 2015, when you reach age 95, the minimum amount remains 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 amount Withholding 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 funds, stocks 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.
 

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