Registered Retirement Income Fund
In the year you reach 71 years of age, you must dispose of all Registered Retirement Savings Plans. One option is to roll your RRSP into a Registered Retirement Income Fund (tax deferred). You can set up a RRIF as early as age 55. However, you must begin to withdraw at least a minimum amount each year beginning no later than the year after the RRIF is set up. If you are over 70, Revenue Canada has developed charts that indicate the minimum withdrawal amounts per year. However, if you are 70 or less, a simple formula is used to calculate the minimum withdrawal.
A few other facts about RRIFs: There is no maximum amount that may be withdrawn. All withdrawals must be included as taxable income. Any amount withdrawn above the minimum is also subject to a withholding tax as follows:
| Amount | Tax Rate |
|---|---|
| $0 - $5,000 | 10% |
| $5,001 - $15,000 | 20% |
| over $15,000 | 30% |