Registered Retirement Income Funds (RRIF)


A registered retirement income fund provides a further means of deferring taxes by allowing individuals to roll their RRSPs into another deferred income plan.  Typically this provides a continuing deferral when the taxpayer reaches age 75, and must convert an RRSP into some form of income stream.  (Although mandatory in the year you reach 75, this conversion can be made at any earlier time.)  A taxpayer may invest in more than one RRIF at a time, may transfer RRSP funds to a RRIF at any age up to 75 and may contribute a refund of premiums from a deceased spouse's or common-law partner's RRSP (or in the case of disabled children, a parent's RRSP) to a RRIF on a tax-free basis.  As well, funds can be withdrawn from a RRIF in excess of scheduled retirement payments and either taxed currently or "rolled over" to a life annuity or annuity to age 90 (either of which may provide payments for a surviving spouse or common-law partner) or, age permitting, to a RRSP.

As with an RRSP, you may open a self-administered RRIF, which allow you to control the plan's assets and performance.  The rules and regulations pertaining to these plans are similar to ordinary RRIFs.

The RRIF investment rules are essentially identical to the RRSP investment rules, so that you can usually simply transfer your RRSP assets to a RRIF, and your self-administered RRSP assets to a self-administered RRIF.  There is even a Canada Savings Bond RRIF to take transfers from your Canada Savings Bond RRSP.

The RRIF rules permit RRIFs to accept transfers of funds from registered pension plans as well as RRSPs.

The alternative to an RRIF is to use your RRSP funds to acquire an annuity.  Generally speaking, the annuity will not give you the same degree of control over your investments as a RRIF.  However, RRIF funds must be withdrawn according to a schedule mandated by the governement, whereas an annuity may provide benefits according to a schedule which better suits your needs as you foresee them.  You can shop around for annuities, obtaining quotes from several life insurance companies (the usual vendors) through their insurance agents.  The investment criteria for RRIFs are typically identical to those for RRSPs.

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