RRSP to RRIF

As you near retirement, it will be time to start thinking about winding down your Registered Retirement Savings Plan (RRSP or RSP).

RSPs are designed to help you save for retirement. According to Canada Revenue Agency rules, you must close your RSP by the end of the year in which you turn 71, although you can certainly do so earlier, if you're ready to begin generating income from those savings.

Unless you're prepared to pay income tax on the total amount of your RSP savings, you have two options.

  1. Buy an annuity from a life insurance company. This gives you a fixed monthly income, usually for the rest of your life.
  2. Convert your RSP to a Registered Retirement Income Fund (RRIF or RIF).

RIFs are the most popular option because of the independence and flexibility they allow. You can carry on managing the same tax-sheltered investments that you had in your RSP, including stocks, ETFs, bonds, mutual funds, GICs, and cash. The government requires you to make a minimum annual withdrawal which increases as you age, but you can choose to withdraw a larger amount.

Key considerations when converting an RSP to a RIF

  • You can make multiple transfers into a RIF from an RSP
  • You can't make any new contributions once you convert to a RIF
  • Your RIF is subject to a mandatory minimum annual withdrawal starting in the year after you open the account
  • As with an RSP, there is no tax on your investment earnings as long as the funds remain in the RIF
  • Withdrawals from your RIF are treated as taxable income
  • You don't necessarily have to sell investments in order to withdraw from your RIF — you can complete an in-kind transfer from a RIF to a TFSA or to a non-registered account if you want to keep hold of your investments
  • You can hold more than one RIF account

How to convert your RSP to a RIF

Your investments can usually be transferred directly from an RSP into a RIF without having to be sold and re-bought. Here's how to convert your RSP into a RIF:

Existing Qtrade Investor clients:

  • Complete and return the RIF application form — we'll do the rest for you

New clients:

  • Open an account online
  • Complete and return the RIF supplementary application form