Converting your savings to income

3 ways to get income in retirement

  1. RRIFRRIF See Registered Retirement Income Fund.+ read full definition Like an RRSP, your savings grow tax-freeTax-free Money that you do not pay tax on.+ read full definition while they’re in the plan and you choose your investments. But you have to withdraw a minimum amount each year, which is fully taxable. Learn more about RRIFs.
  2. AnnuityAnnuity A contract usually sold by life insurance companies that guarantees an income to you or your beneficiary at some time in the future. An annuity is a contract with a life insurance company. When you buy an annuity, you deposit a lump sum of money, and the insurance company agrees to pay you a guaranteed…+ read full definition Lets you convert your savings into a guaranteed monthly income. No matter what the markets do, your income will never change. You can choose a termTerm The period of time that a contract covers. Also, the period of time that an investment pays a set rate of interest.+ read full definition-certain annuity (monthly payments for a set number of years) or a life annuityLife annuity A life annuity gives you a guaranteed regular income for life. Payments usually stop when you die, and no money will go to your estate. You may choose to add an option that allows your spouse, beneficiary or estate to continue to receive your payments after your death.+ read full definition (with monthly payments until you die). But if you buy a life annuity, any money left over when you die won’t go to your estateEstate The total sum of money and property you leave behind when you die.+ read full definition. Learn more about annuities.
  3. Investments outside a registered plan –A variety of investments can produce regular income, such as GICs and bonds that pay interest, and stocks that pay dividends. Learn more about investing for income. Any money you make from “unshelteredUnsheltered A regular investment or account that does not shelter your money from tax. In other words, you have to pay tax on your savings and the money you make investing them.+ read full definition” investments is taxable. Learn more about how investments are taxed.

Income splitting to reduce tax

Consider splitting your pensionPension A steady income you get after you retire. Some pensions pay you a fixed amount for life. Others save up money for you while you are working. You use that money to create income after you retire.+ read full definition income with your spouse and help reduce the taxTax A fee the government charges on income, property, and sales. The money goes to finance government programs and other costs.+ read full definition you pay. You might be able to shareShare A piece of ownership in a company. A share does not give you direct control over the company’s daily operations. But it does let you get a share of profits if the company pays dividends.+ read full definition up to half of your pension income with your spouse or common-law partner each tax year. Learn more about income splitting.

Take action

If you are concerned about the financial well-being of your parents or a senior close to you, or if you suspect they may be suffering financial abuse, this checklist will help you start a conversation.


The option you choose could affect your estate plan. For example, any money left in a life annuity goes to the insurance companyInsurance company A company that sells insurance products. Some companies sell only life insurance. Some sell only property insurance. Others sell all types of insurance.+ read full definition, not your beneficiaries. Learn more about wills and estate planning.

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