Quick Links

	Advisor websites
	Locate a branch
	About Macquarie

Registered Retirement Income Funds (RRIFs)

At Macquarie Private Wealth, we do everything we can to enhance your financial future.

We believe that understanding registered programs and building effective strategies today can make a significant difference to your retirement lifestyle tomorrow. A Macquarie Private Wealth Investment Advisor can help you look beyond your current circumstances to help you prepare for your future needs, and ease the process of switching your assets from a mature RRSP to a RRIF.

The RRIF advantage — tax-sheltered growth and deferred taxes

The Canada Revenue Agency requires that you convert all your RRSPs to a Registered Retirement Income Fund (RRIF) or another income option by the end of the year in which you turn 71. For most investors, a RRIF is the preferred choice as it provides a regular income stream for your retirement years and allows you to defer taxes.

A RRIF works like an RRSP in reverse: instead of making annual contributions, you withdraw income for your retirement years. The benefits are two-fold:

Assets within a RRIF continue to grow tax-sheltered until withdrawn as income.
When you withdraw funds from your RRIF, you may be in a lower tax bracket (and subject to a lower tax rate) than when the funds were contributed.

How RRIF withdrawals work

There is no withdrawal required in the year your RRIF is set up, but you must withdraw a minimum amount each subsequent year. Assets that are withdrawn from a RRIF are taxed as income in the year in which they are received, and should be included in your taxable income when filing your annual return.

Minimum Withdrawal Amounts

Qualifying RRIF:

Was opened before 1993, and has not accepted any funds after 1992; or
Was opened at any time, and has not had funds transferred in after 1992 except from another Qualifying RRIF.

Non-Qualifying RRIF:

Was opened after 1992; or
Was opened before 1993 and has funds transferred in from a plan opened after 1992.

Calculating minimum withdrawals

AGE AT JANUARY 1	TYPE OF RRIF	CALCULATION
Under 71	Any RRIF	90-minus-age formula
71 – 78	Qualifying	90-minus-age formula
71 – 78	Non-qualifying	Percentage formula
79 or over	Any RRIF	Percentage formula

Minimum Payment Formulas

1. 90-Minus-Age Formula:

Market value of RRIF as at December 31 ÷ 90 minus the planholder’s age as of December 31

2. Percentage Formula:

% based on age (see chart below) x RRIF value on January 1

AGE ON JANUARY 1	QUALIFYING RRIFs % (for RRIFs opened prior to 1992)	NON-QUALIFYING RRIFs % (for RRIFs opened after 1992)
69	4.76%	4.76%
70	5.00%	5.00%
71	5.26%	7.38%
72	5.56%	7.48%
73	5.88%	7.59%
74	6.25%	7.71%
75	6.67%	7.85%
76	7.15%	7.99%
77	7.69%	8.15%
78	8.33%	8.33%
79	8.53%	8.53%
80	8.75%	8.75%
81	8.99%	8.99%
82	9.27%	9.27%
83	9.58%	9.58%
84	9.93%	9.93%
85	10.33%	10.33%
86	10.79%	10.79%
87	11.33%	11.33%
88	11.96%	11.96%
89	12.71%	12.71%
90	13.62%	13.62%
91	14.73%	14.73%
92	16.12%	16.12%
93	17.92%	17.92%
94+	20.00%	20.00%

Witholding tax rates on additional withdrawals

You are free to withdraw more assets from your RRIF than the minimum at any time to help with special expenses or emergencies. If you do so, the additional withdrawal will be subject to withholding tax (tax that is withheld by Macquarie Private Wealth and paid to the government on your behalf) as follows:

Withholding tax rates

Residents of all provinces (except Quebec)

WITHDRAWAL AMOUNT OVER THE MINIMUM PAYMENT	TAX RATE
Up to $5,000.00	10%
$5,000.01 to $15,000.00	20%
$15,000.01 and over	30%

Residents of all Quebec only

UP TO $5,000.00 WITHDRAWN OVER THE MINIMUM PAYMENT	$5,000.01 - $15,000.00 WITHDRAWN OVER THE MINIMUM PAYMENT	$15,000.01 OR MORE OVER THE MINIMUM PAYMENT
Federal tax rate: 5%	Federal tax rate: 10%	Federal tax rate: 15%
Provincial tax rate: 16%	Provincial tax rate: 16%	Provincial tax rate: 16%

Your Macquarie Private Wealth Investment Advisor can work with you to determine what your income needs will be at retirement and how best to use your RRIF to support your lifestyle needs.

When to open a RRIF

You have the option to convert your RRSP into a RRIF or other retirement income option before you reach age 71. This is often a preferred strategy for people who plan on retiring early or who wish to use a portion of their RRSP assets before they are eligible for either CPP (Canadian Pension Plan) or OAS (Old Age Security). Investors who convert some of their RRSP to a RRIF at age 65 or older can take
advantage of the government’s Pension Income Tax Credit on the first $2,000 withdrawn.

Given the many options available, it’s best to start planning what you are going to do with your RRSP assets well before you reach the mandatory age of 71. Again, your Macquarie Private Wealth Investment Advisor can assist you in making the decision that is right for you.

Get more information

If you are nearing retirement, we encourage you to speak with your Investment Advisor about which RRIF strategies make sense for you. If you are not already a client of Macquarie Private Wealth and would like more information about RRIFs or the world of other opportunities we present to build your personal wealth, contact us today at mpwcanada@macquarie.com or 1 866 775 7704.