RRIF Minimum Withdrawal Rules: How Much You Have to Take Out, and When

From RRSP to RRIF: the basic timeline

An RRSP has to be wound up by the end of the year you turn 71 — you can't hold one past that. Most people convert some or all of it into a RRIF, which lets the money keep growing tax-deferred while you draw a regular taxable income from it. You can also convert earlier than 71 if you want income sooner, or if you're retiring early and need cash flow.

Here's the one quirk that trips people up: there is no minimum withdrawal required in the calendar year you open the RRIF. The minimum kicks in starting the following January. So if you convert in November of one year, you don't have to withdraw anything until the next calendar year begins.

How the minimum percentage is calculated

Each January 1, your RRIF's minimum withdrawal for that year is calculated as a percentage of the account's value on that date, based on your age (or, if you elect it, your spouse's or common-law partner's age, if they're younger).

• For RRIF holders under 71, the formula is 1 divided by (90 minus your age) — for example, at age 65 that works out to roughly 4%.
• From age 71 onward, the government publishes a fixed prescribed percentage for each age that climbs steadily, reaching 20% by age 94 and staying there for every age beyond.
• As a stable, widely cited reference point: the minimum at age 71 has been set at 5.28% since a 2015 federal reduction to these rates. Confirm the exact percentage for your current age using the CRA's RRIF minimum withdrawal table before you plan around it, since these figures are set by regulation and you want the one that applies to you specifically.

Because the percentage rises every year, and because it's applied to your balance each January, the dollar amount of your minimum tends to increase over time even if your investments are flat — you're required to draw down a growing slice of a shrinking (or level) pool.

Using a younger spouse's age to lower your minimum

When you open a RRIF, you can elect to base the minimum withdrawal calculation on the age of your spouse or common-law partner instead of your own, if they're younger. This is a one-time election made at setup and it applies for the life of the RRIF.

This doesn't reduce your total lifetime withdrawals — the money is still yours and still taxable when it comes out — but it lowers the required annual amount, which can matter if you're trying to avoid pushing your income into a higher tax bracket or triggering Old Age Security clawback in a given year.

Tax treatment: withholding versus what you actually owe

This is the rule people misunderstand most: the RRIF minimum amount is not subject to withholding tax at the time it's paid out. If you withdraw exactly the minimum, your financial institution sends you the full amount with no tax deducted.

Any amount you withdraw above the minimum does have withholding tax deducted, at rates that increase with the size of the excess withdrawal.

In both cases, the entire withdrawal — minimum or excess — is fully taxable income for the year and gets reported on a T4RIF slip. If your only source of tax withheld is on amounts above the minimum, you can end up owing money at tax time simply because the minimum portion had nothing withheld. Many retirees ask their institution to voluntarily withhold extra tax on the minimum, or make quarterly instalment payments to CRA, to smooth this out.

One other detail worth knowing: RRIF income qualifies for the pension income amount tax credit once you turn 65, and it's eligible for pension income splitting with a spouse at that age too — both can meaningfully reduce a couple's combined tax bill in retirement.

Frequently asked