Transitioning from RRSP to RRIF: A Smooth Sailing Guide

retirement planning
We'll guide you through this crucial transition, explaining the process, benefits, and strategies for maximizing your RRIF.

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As Canadians approach retirement, the focus often shifts from accumulating wealth to generating a steady income stream. One of the key steps in this transition is converting a Registered Retirement Savings Plan (RRSP) into a Registered Retirement Income Fund (RRIF). In this article, we’ll guide you through this crucial transition, explaining the process, benefits, and strategies for maximizing your RRIF.

When and Why to Consider Converting Your RRSP to an RRIF

Timing: By the end of the year in which you turn 71, you are required to convert your RRSP into an RRIF, an annuity, or withdraw it as cash (which would be fully taxed). However, you can make the conversion earlier if it aligns with your retirement plans.

Steady Income: One of the main reasons to convert to an RRIF is to establish a regular income during retirement while continuing to benefit from tax-deferred growth on the remaining funds.

Tax Implications and Withdrawal Rules

Minimum Withdrawals: Once an RRSP is converted to an RRIF, you must start withdrawing a minimum amount each year, starting the year after the RRIF is established. The minimum amount is calculated based on a percentage of the RRIF’s value and your age.

Taxation: Withdrawals from an RRIF are considered income and are subject to taxation. However, the remaining balance continues to grow tax-deferred.

Flexible Withdrawals: Beyond the minimum required withdrawal, you have the flexibility to withdraw more if needed, but these additional amounts are also subject to taxation.

Strategies for Maximizing RRIF Benefits

Tax Planning: Consider your overall income when planning RRIF withdrawals to minimize your tax burden. For example, if you expect lower income in a particular year, it might be beneficial to withdraw more from your RRIF.

Investment Choices: Unlike RRSPs, which often focus on growth, your RRIF investment strategy should balance growth with risk management. Diversifying your RRIF portfolio can help achieve this balance.

Spousal RRIF: If you have a younger spouse, you can base your minimum required withdrawals on their age instead of yours, reducing the minimum amount and allowing for more tax-deferred growth.


Transitioning from an RRSP to an RRIF is a significant milestone in your financial journey, marking the shift from wealth accumulation to income generation. By understanding the timing, tax implications, and strategic options, you can make this transition as smooth as possible, optimizing your financial stability in your golden years.

At Newton Financial, we specialize in helping Canadians navigate this crucial transition. Contact us today to discuss how we can tailor an RRIF strategy to meet your unique needs.

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*These posts are for educational purposes only and is not intended to provide specific personalized advice including, without limitation, investment, financial, legal, accounting or tax advice. Please consult an appropriate professional regarding your particular circumstances. Some of the information contained herein might be from sources believed to be reliable, however, we cannot guarantee that it is accurate or complete. The views expressed are those of the authors and writers only. Mutual Funds and Segregated Funds provided by the Fund Companies are offered through Worldsource Financial Management Inc., sponsoring mutual fund dealer. All other insurance products and related services are offered through Newton Financial Ltd.