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5 reasons to open a RRIF

​​A Registered Retirement Income Fund (RRIF) is a registered account that gives you a steady income in retirement. You open a RRIF by transferring money from your RRSP. Your savings remain sheltered from tax until the money is withdrawn.

1. Savings grow tax free

You won't pay any tax on investment earnings when you convert your RRSP to a RRIF. Your money will continue to grow tax free as long as it stays in the RRIF. You only pay tax on the withdrawals you make. Learn more about how RRIFs work.

2. Variety of investment options

You decide how to invest your money. A RRIF can hold the same kinds of investments as an RRSP, including GICs, mutual funds, ETFs, segregated funds, stocks and bonds.

3. Flexible withdrawal options

While there is a minimum amount you have to take out every year, there is no maximum amount. You can:
  • choose to make regular monthly, quarterly, semi-annual or annual withdrawals,
  • change the amount and frequency of your withdrawals if your needs change, and
  • take lump-sum withdrawals if you need extra cash.
You can decide how much money to withdraw from your RRIF each year — as long as you meet the minimum withdrawal requirement.

4. Minimum amounts can be based on spouse's age

If your spouse is younger than you, you can use their age to calculate the minimum amount you have to take out of your RRIF every year. The lower the age, the lower the minimum amount and the less income tax you'll pay on the withdrawals. 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.

5. Spouse can inherit RRIF tax free

If you name your spouse as your beneficiary, they can inherit your RRIF tax free. It won't be included in your final income tax return. If you name your spouse as “successor annuitant”, they can take over your RRIF and automatically start receiving payments from it after your death. The value of your RRIF will also not be included in your estate for calculating probate fees.

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