Converting Your RRSP to a RRIF: What to Know

Your registered retirement savings plan has a last day, and it's set by your birthday. It's December 31 of the year you turn 71. By then you've got three choices for your RRSP. You can take the money out, buy an annuity, or convert it to a registered retirement income fund, or RRIF. The last two keep it sheltered, and neither one costs you any tax on the day you make the move. From the year after you open a RRIF, it has to pay you something every year, and you can't skip one.

Key takeaways

• Your deadline is the last day of the year you turn 71.¹² It's the same rule for everyone, and your own birthday fixes the date.
• You pick one of three things: the cash, an annuity, or a RRIF.² If you take the cash, tax comes off on the day. If you do either of the others, nothing does.²
• You don't have to sell anything. Your holdings move across as they are, and a RRIF can hold what your RRSP holds.³
• Your first payment lands a year later.⁵ If you convert at 71, you take 5.28% of whatever you're holding that January 1.⁷¹³

What are your three choices at 71?

You have to do one of three things with your RRSP, and the deadline is that December 31. You can withdraw it, you can transfer it to a RRIF, or you can use it to buy an annuity.² They aren't variations on each other. The three pay you different amounts, at different times, and the tax lands differently on each.

If you take the cash, you pay on the spot. Whoever holds your account takes tax off before you see any of it, and how much they keep depends on how much you take. It's 10% on amounts up to $5,000, 20% on amounts over $5,000 up to and including $15,000, and 30% on amounts over $15,000, with lower rates in Quebec.⁸ That withholding is only an instalment against what you'll actually owe. The whole withdrawal counts as your income for that one year, at a rate you may never have paid before, and your bill in April is usually bigger than the amount they held back.

If you buy an annuity, you hand the money to an insurer and they pay you back on a schedule, for as long as you live or for a term you pick. Nothing's held back when you buy it, and you pay tax on each payment as it reaches you.² You give up the investment decisions, and in return you know what arrives. Your payment won't move if markets fall, and it won't move if they climb either.

If you move it to a RRIF, your account changes but what sits inside it doesn't. Your money stays invested, you still pick what it holds, and it keeps growing untaxed exactly as it did before.³ The one condition is that the account has to begin paying you. A minimum has to reach you every year from the following year onward, and you can always take out more, never less.⁵

What happens if you do nothing?

You have to make this choice, and you've got to make it before that December is out.¹² Whoever holds your account is the only party who can tell you what they'd do if they don't hear from you first.

A plan that stops meeting the rules it was registered under stops being an RRSP, and you're then treated as having received the full market value of everything inside it.⁶ That whole amount goes on your return for the year. Tax is withheld only if the money is actually paid out in the year of deregistration.⁶ So your bill can reach you with nothing set aside against it.

That's the mechanism, and it isn't a prediction about your own account. What your carrier does as the date approaches, and what they do if you say nothing at all, are questions only they can answer. Your statement's got their name on it, and they'll tell you on the phone.

You don't have to sell anything to move it

A RRIF is an arrangement between you and a carrier, the bank or trust or insurance company that holds it, where you transfer property to them and they make payments to you.³ Your holdings cross over as they are rather than as a cash value, and a self-directed RRIF runs on much the same investment rules as a self-directed RRSP.³ So if you've spent years building a portfolio you actually like, nobody's asking you to take it apart to meet a birthday.

You can also hold more than one RRIF.³ You don't have to do this in a single move. You can send part of the money across now and leave the rest where it is until the deadline.

One thing does end permanently. Once your RRIF is open, nothing more can go into it.⁴

Your money doesn't change. The account just has to start paying you.

Why convert before you have to?

Because at 65 a RRIF gives you a tax credit and a way to move income to your partner, and an RRSP gives you neither.

Once you're 65 or older at year end, the payments you take from a RRIF count as eligible pension income, and that does two things. First, you can claim a federal credit on up to $2,000 of it, called the pension income amount.¹⁰ At the lowest federal rate of 14% that saves you $280, and your province has its own amount on top, which varies by where you live.¹⁰¹⁴ Second, you and your spouse or common-law partner can jointly elect to shift as much as half of that income onto their return instead of yours, which is called pension income splitting.¹¹

The account you already have does neither. If you pull $2,000 out of your RRSP at 65, you get no credit and nothing to split. RRIF payments sit on the eligible list with no conditions attached once you're 65, and an ordinary RRSP withdrawal isn't on it at all.¹⁰ The money and the tax year are identical either way. Only the RRIF payment qualifies.

That's why some people convert part of the account early, to switch it on. On an illustrative $50,000 converted in the year you turn 65, your minimum the following year works out at 4% of it, which is $2,000, which is exactly what the credit covers.⁷

The trade is real, and it's why most people don't. Once the RRIF is open, money has to come out and land on your return every year after, whether you have a use for it or not.⁵ If you convert at 65, you've signed up for six more years of that than you needed.

Before you pick a year

1. Your partner's age. Your minimum is worked out on your own age, unless you elect to use a younger spouse's age instead, which shrinks the percentage for every year after.⁶ You name whose age counts on the original RRIF application form, and after that it's fixed for good.⁶ On a $300,000 balance, in the first year a minimum is due, that's the difference between $15,840 and $12,000.

1. Whether you're still earning. The RRSP door doesn't shut completely at 71. As long as your partner is 71 or younger that December, you can keep putting money into a spousal RRSP up to your own deduction limit, in the years after your own plan has been converted.⁹

2. Whether Old Age Security is in the picture. RRIF payments are ordinary income, so they count toward the figure the Old Age Security recovery tax, the clawback, is measured against. For the 2025 income year, if your net income before adjustments passes $93,454 you pay back 15% of everything above it.¹² Splitting moves income off the higher return, which can bring that person back under the line.¹¹ You'll find where the line falls in the guide to the clawback.

Your minimum is set by what the account is worth on January 1, so you can't know it until the day arrives.¹³ Your year-end statement has the number.

Run your own numbers with your balance and your age, and you'll see what a RRIF would have to pay you.

The timing most people settle on

Most people wait until the year they turn 71, because nothing forces their money out before then, and most would rather leave it invested another year than claim a credit worth a few hundred dollars.

People already past 65 with no pension from work often land the other way, and convert enough to switch on the pension income amount rather than the whole account. That opens up splitting for them too, and it leaves the rest where it is.¹¹

When you call, your carrier will ask for your balance, your age and your partner's. Those three settle the answer, and they're different for everyone.

?

Common questions

Can I keep some money in my RRSP after I open a RRIF?+

Yes, right up to your deadline. You can hold more than one RRIF and move money across in stages, as long as you've dealt with the whole RRSP by December 31 of your 71st year.

Do I have to take money out in the year I convert?+

No. You've got nothing to take until the following year, so converting in January and converting in December come to the same thing that first year.

What if my spouse is younger than me?+

You can have your minimum worked out on their age rather than yours, and it'll be smaller every year because of it. You have to choose that on the original RRIF application form, and you can't change it afterwards.

Can I move the money back into an RRSP later?+

Not once your deadline has passed. You can't put anything into a RRIF once it's open, and your RRSP can't take money after December 31 of your 71st year, unless it's a spousal RRSP and your partner is 71 or younger.

Will my RRIF payments cost me any Old Age Security?+

They can, if they push you high enough. Everything you take counts as ordinary income, and once you're over the threshold you repay 15 cents of pension for every dollar above it. For the 2025 income year that line sits at $93,454.

What if I am still working at 71?+

Your own deadline still applies, and working past it doesn't extend it. If you've got earned income and a partner who is 71 or younger, you can carry on contributing to a spousal RRSP after your own plan has been converted.

Sources

1. CRARRSP options when you turn 71. December 31 of the year you turn 71 is the last day you can contribute to your RRSPs. Accessed 2026-09-04.
2. CRAOptions for your own RRSPs. The three options in the year you turn 71, and no tax withheld on a direct transfer to a RRIF or an annuity purchase. Accessed 2026-09-04.
3. CRARegistered Retirement Income Fund (RRIF). Transferring property to a carrier, earnings tax-free inside the account, more than one RRIF, and self-directed RRIFs. Accessed 2026-09-04.
4. CRASetting up a RRIF. No further contributions once the RRIF is established. Accessed 2026-09-04.
5. CRAReceiving income from a RRIF. The minimum starts the year after the RRIF is set up, and you can withdraw more but not less. Accessed 2026-09-04.
6. CRAReceiving income from an RRSP. The spousal age election, made on the original RRIF application form and not changeable afterwards; and a plan that no longer satisfies its registration rules, the deemed receipt of fair market value, and withholding only in the year of deregistration. Accessed 2026-09-04.
7. CRAChart, prescribed factors. The factor of .0528 at 71, and 1 divided by (90 minus age) at 70 or younger. Accessed 2026-09-04.
8. CRATax rates on withdrawals. 10%, 20% and 30% on RRSP withdrawals, with lower rates in Quebec. Accessed 2026-09-04.
9. CRASpousal RRSPs or common-law partner RRSPs. Contributions after the year you turn 71 where your spouse is 71 or younger. Accessed 2026-09-04.
10. CRAPension income amount, line 31400 federally and line 58360 provincially. Up to $2,000, and RRIF income on the eligible list at 65 or older. Accessed 2026-09-04.
11. CRAPension income splitting. Up to 50% of eligible pension income on a joint election, and the effect on the repayment of Old Age Security. Accessed 2026-09-04.
12. Service CanadaRepayment of Old Age Security pension. Net income before adjustments over $93,454 for the 2025 income year, and 15% of the excess. Accessed 2026-09-04.
13. CRAMinimum amount from a RRIF. The minimum is the fair market value of the property held at the start of the year multiplied by the prescribed factor. Accessed 2026-09-04.
14. CRACurrent year tax rates and income brackets, 2026. The lowest federal rate of 14%, which every non-refundable credit is claimed at. Accessed 2026-09-04.

Educational, not financial advice. Figures verified against primary sources on the date shown.

See it in a story: "The Question That Keeps Her Up," thirty years of putting money in, and nobody ever taught her how to take it out. For what your account pays you once it's open, there's the guide to RRIF minimums, and for whether you have enough to stop working, the guide to retiring. Everything else sits in the retirement hub.