How Do Rrifs Work?

A RRIF is a federally registered account that provides you with a steady stream of income that you can continue to draw on during retirement. It is essentially a continuation of your RRSP and functions in much the same way, however, with a RRIF you can only make withdrawals and can no longer make deposits.

How much do you have to withdraw from your RRIF each year?

1 / (90- age)

At 65, you must take out at least 4% of the RRIF balance at the beginning of the year in income. If you had $100,000 in the RRIF, you would need to take out at least $4000.

When should you convert your RRSP to a RRIF?

You must convert your RRSP to an RRIF by December 31 of the year you turn 71, regardless of whether you need the regular income. If you are under the age of 71 and need income periodically (as opposed to, say, monthly), you're usually better leaving your money in an RRSP and making the occasional withdrawal.