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Your RRSP has an expiry date: how the move to a RRIF works

By December 31 of the year you turn 71, every RRSP has to become something else. For most people that something is a Registered Retirement Income Fund: the same investments, running in reverse. The deadline, the forced-withdrawal math, and the levers that soften it.

By Editorial Team · August 4, 2026 · 6 min read
Your RRSP has an expiry date: how the move to a RRIF works

Last week we took apart Canada's two public pensions, one you paid into and one you didn't. This week is the third machine at the same kitchen table: the savings you built yourself, and the moment the government makes you start taking them back out.

The hard deadline

The hard deadline is December 31 of the year you turn 71. That's the last day an RRSP can exist in your name, and there are three exits (Canada.ca, options for your own RRSPs).

Cash the whole thing out, and the full balance lands on that year's tax return as income, which for most balances is the most expensive possible choice. Buy an annuity from an insurance company, trading the balance for a guaranteed payment stream. Or convert to a Registered Retirement Income Fund (RRIF), which is what most people do, and the default this piece walks through. Miss the deadline entirely and the CRA deregisters the RRSP, with the full balance becoming taxable income at once. The deadline is not a suggestion.

The conversion is a name change, not a sale

Converting doesn't count as selling anything. The same investments move over as they are: no tax bill, no triggered gains, and everything inside keeps growing tax-deferred exactly as it did in the RRSP. What changes is the direction of travel. An RRSP is built for putting money in. A RRIF exists to force money out: from the year after the RRIF opens, a minimum amount must be withdrawn every year, whether the money is needed or not.

The minimum withdrawal math

The minimum for any year is a percentage of the RRIF's value on January 1, set by your age on January 1, and the percentage rises every year (Canada.ca, receiving income from a RRIF). At 65 it's 4.00%. At 71 it's 5.28%. At 80 it's 6.82%, at 85 it's 8.51%, and from 95 on it's 20% a year.

Two timing details do real work here. First, no minimum is required in the calendar year the RRIF is opened; the first forced withdrawal comes the year after. Second, because the rate runs off your age on January 1, someone who converts at the deadline in the year they turn 71 takes their first minimum the next year at the 71-year-old's rate of 5.28%, not the 5.40% usually quoted for age 72. On a $500,000 RRIF, that first minimum is $26,400.

The lever almost nobody knows about

There's an option to base the minimum on a younger spouse's age instead of your own, and it shrinks the forced withdrawals for as long as the RRIF exists. A 71-year-old with a 65-year-old spouse can elect the spouse's age and owe a 4.00% minimum instead of 5.28%: on that same $500,000, roughly $6,400 a year less that has to come out and be taxed, with the gap compounding as the money left behind keeps growing sheltered.

The mechanics are simpler than people expect. The election is made when the RRIF is set up, it's permanent for the life of that RRIF, and the spouse or common-law partner doesn't need to be a contributor or a beneficiary; only their birthdate is borrowed. The one way to get the choice back is to open a new RRIF later.

Withholding tax: what's taken, and what's actually owed

The minimum comes out with no withholding tax at all. Anything above the minimum gets tax withheld at source by whichever institution holds the RRIF: 10% on the first $5,000 above the minimum, 20% from $5,001 to $15,000, and 30% beyond that, with Quebec splitting the take differently between federal and provincial (Canada.ca, tax rates on withdrawals).

The withholding is not the final tax bill. Every dollar withdrawn, minimum included, is ordinary income on that year's return, reported on a T4RIF slip. The withholding is just a deposit; the return settles the real amount, up or down. A large withdrawal can easily owe more than what was held back, and the difference arrives at filing time.

The withholding tax is not your final tax bill. It's a deposit, and the tax return settles the real amount.

Where last week's article walks in

Every RRIF dollar, forced or voluntary, is net income in the eyes of the Old Age Security (OAS) recovery tax (Canada.ca, OAS recovery tax). A big enough minimum can push a retiree over the clawback line all by itself: for the current payment period that line sits at $93,454 of 2025 income, with 15 cents of OAS clawed back per dollar above it. At the other end of the income scale the same mechanism bites harder. The Guaranteed Income Supplement (GIS) shrinks by 50 cents for every dollar of other income, and RRIF withdrawals count in full. TFSA withdrawals, as ever, count for nothing, which is one more entry in the RRSP-versus-TFSA ledger.

The age-65 perks

Two doors open at 65, and both open for RRIF withdrawals but not RRSP withdrawals.

First, the pension income credit: from age 65, RRIF income counts as eligible pension income, and the first $2,000 of it each year earns a federal non-refundable credit. Second, pension income splitting: from 65, up to half of RRIF income can be shifted to a spouse's return through a joint election at tax time, Form T1032, which can pull a couple's brackets closer together (Canada.ca, pension income splitting). Money pulled straight from an RRSP qualifies for neither.

This is why partial early conversion exists as a strategy people actually use. There's no minimum age: an RRSP can be converted to a RRIF, in whole or in part, at any time. Someone who is 65 with no other pension income can move a slice of RRSP into a small RRIF and draw $2,000 a year through the credit. The trade is that once a RRIF exists, its own minimum clock starts the following year.

One caution for spousal accounts: a spousal RRSP becomes a spousal RRIF, and withdrawing more than the minimum within three years of the last spousal contribution can attribute the excess back to the contributor's tax return. The minimum itself is always safe from attribution.

Before 71: the drawdown question

Nothing requires waiting until 71 to touch an RRSP, and the years before the deadline are where the planning actually happens. Two broad patterns show up.

Some people maximize deferral: leave everything growing tax-sheltered until the deadline forces the issue. Every year of deferral compounds untaxed, and for someone still earning well into their 60s, withdrawals on top of a salary would be taxed at the highest rate they'll ever face.

Others drain early: someone who retires at 60 with a few low-income years before CPP, OAS, and the forced minimums all stack up can draw registered money in those years at the lowest brackets of their retirement, shrinking the balance that will later generate forced, clawback-triggering income at 72 and beyond. The math turns on the gap between tax brackets now and tax brackets later, and on where income will sit against the OAS threshold once everything is flowing at once.

Neither pattern is right in general. They're the two ends of a dial, and the setting depends on numbers only the household holds.

When the RRIF outlives you

The default rule at death is blunt: the RRIF's full value lands as income on the final tax return (Canada.ca, death of a RRIF annuitant). Naming a spouse changes it entirely. As successor annuitant, a spouse simply takes over the RRIF, payments and all, with nothing taxed on the final return. As sole beneficiary, they can roll the balance into their own RRSP or RRIF tax-deferred. Financially dependent children and grandchildren have narrower options. What all of this means for an estate, and for the generation after, is a piece of its own.

The handback

The deadline is the same for everyone; almost nothing else is. What the conversion means at any one kitchen table comes down to the balance in the account, the other income already flowing or about to, the age gap between spouses, and the brackets on either side of the retirement line. The forced minimums are the part nobody chooses. When the drawdown starts, how it's split, and whose age runs the clock are still decisions, and the years before 71 are when they're cheapest to make.

This is general information, not advice. Figures are as of July 2026 and change with legislation and indexation; check the live numbers with the CRA and your own account statements before relying on them.

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